Peer review by external experts is widely recognized as a legitimate and trustworthy academic practice, essential for ensuring the quality and rigor of research, providing more objective and less impartial assessments, and promoting transparent decision-making in science and academia. Research Funding Organisations (RFOs) usually rely on some form of peer review to evaluate the scientific quality of research proposals to allocate their limited resources. The peer review system is, however, also associated with several weaknesses, such as risks for bias and conflict of interest. This article explores the implications of replacing National Review Panels (NRPs) with International Review Panels (IRPs) in a national RFO, examining how this shift may impact the peer review process. Drawing on semi-structured interviews with staff from a national RFO in a European country and members of its IRPs, the article provides a nuanced analysis of both the potential benefits and challenges with substituting NRPs with IRPs. The results highlight how IRPs increase the distance between applicants and reviewers, which benefits the impartiality of the process. Nevertheless, this distance needs to be balanced by domestic panel members, chairs or research officers possessing appropriate knowledge of the local academic context, culture and structure. IRPs also introduce a greater diversity of perspectives into the assessments of applicants, which may promote objective and balanced assessments. The diversity may however also lower inter-reviewer reliability, and, in turn, complicate calibration practices and hinder the development of informal deliberative norms during the process of reaching decisions and consensus.