Venezuela said on Thursday it was halting commercial relations with Panamanian officials and companies, including regional airline Copa, for alleged involvement in money laundering, prompting Panama to recall its ambassador.
The resolution names Panamanian President Juan Carlos Varela and nearly two dozen Cabinet ministers and top-ranking officials, adding that Panama's financial system had been used by Venezuelan nationals involved in acts of corruption.
Venezuela said the individuals named in the resolution "present an imminent risk to the [Venezuelan] financial system, the stability of commerce in the country, and the sovereignty and economic independence of the Venezuelan people."
The statement came a week after Panama declared President Nicolas Maduro and about 50 Venezuelan nationals as "high risk" for laundering money and financing terrorism.
Caracas did not detail whether the move would halt the operations of Copa in Venezuela, which is one of the crisis-stricken country's few providers of international flights following a sharp reduction in airline services.
Copa's website showed its planned Panama City-Caracas flight later Thursday was canceled. Copa flights Friday between the two cities were listed as scheduled.
The company did not respond to a request for comment.
Panama's Varela, in brief comments to reporters Thursday, described the Venezuelan announcement as nonsensical.
"We have not heard anything about breaking relations but rather about a set of supposed sanctions, it's gibberish," Varela said.
The South American country has been hit with sanctions by Canada, the United States and a number of other countries over issues ranging from human rights violations to corruption and drug trafficking.
Maduro says the country is victim of an "economic war" led by his adversaries with the help of Washington, and says the sanctions are part of foreign countries' efforts to undermine his government.
This story was written by Reuters.