Venezuela, Panama to restore envoys and resume airline service

CARACAS (Reuters) - Venezuela and Panama will restore ambassadors and allow for the resumption of airline service, turning the page on a diplomatic dispute between the two countries, they said on Thursday.

Venezuela this month cut commercial ties with a group of Panamanian officials and companies, including regional airline Copa <CPA.N>, for alleged involvement in money laundering, prompting both countries to recall ambassadors.

The two governments said in a joint statement that they would send back their respective ambassadors, "reestablish air connectivity" and "maintain an open and respectful diplomatic dialogue."

Copa, which has become a crucial provider of international flights following a sharp reduction in airline services to crisis-stricken Venezuela, did not answer phone calls seeking comment.

Venezuela had accused Panamanian President Juan Carlos Varela and nearly two dozen cabinet ministers and top-ranking officials of involvement in money laundering.

That came a week after Panama declared Maduro and some 50 Venezuelan nationals "high risk" suspects for laundering money and financing terrorism.

(Reporting by Brian Ellsworth and Vivian Sequera in Caracas and Eli Moreno in Panama City; editing by Grant McCool, Tom Brown and Cynthia Osterman)