PANAMA BACKGROUND CHECK

General Information

GDP USD36.253bn (World ranking 88, World Bank 2012)
Population 3.8 million (World ranking 129, World Bank 2012)
Form of state Constitutional Democracy
Head of government Juan Carlos VARELA (PP)
Next elections 2019, presidential and legislative

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PRODUCTS IN PANAMA

Data Protection

Contribution Details

Galindo, arias & Lopez

Diego herrera

James sattin

Jose Luis sosa

Law

In recent years, Panama has taken significant legislative steps to regulate electronic data protection and internet commerce. However, this regime remains a work in progress.

The primary laws and regulations thus far enacted are Law 51 of 22 July 2008, as amended by Law 82 of 9 November 2012 (“Law 51”), and Executive Decree No. 40 of 19 May 2009 (“Decree 40”). The central purpose of both Law 51 and Decree 40 is to regulate the creation, utilization and storage of electronic documents and signatures in Panama, through a registration process and the supervision of providers of data storage services. Law 51 and Decree 40 provide for enforcement through the General Directorate of Electronic Commerce (Direction General de Comercio Electrónico) (“DGCE”).

Definition of Personal Data

Personal Data is not expressly defined under Panamanian law. However, it is generally deemed to include information that can specifically identify an individual, such as one’s name, postal address (including billing and shipping addresses), telephone number, e-mail address, credit card number, or a username.

Definition of sensitive Personal Data

“Sensitive Personal Data” is not defined under Panamanian Law.

National Data Protection authority

The General Directorate of Electronic Commerce

Registration

Under Decree 40, electronic data storage companies and companies engaged in online electronic signature verification must register with the DGCE. For companies otherwise engaged in e-commerce-related activities, registration with the DGCE is voluntary and can be completed online and free of cost. Registration must occur no later than 15 days prior to the commencement of data processing activities and shall include, inter alia, the following information:

  • name of the company;
  • company´s physical address, telephone and fax number;
  • legal representative of the company;
  • company´s internet address or URL;
  • contact email provided by company to customers;
  • public Registry and Ministry of Commerce Registration Information;
  • in the event that an undertaken activity requires specific authorization or permits, evidence
  • thereof;
  • tax Identification Number;
  • description of services offered by the company, including pricing information and applicable taxes; and
  • the Company’s code of conduct.

Moreover, for companies that are engaged in each of the activities for which registration is mandatory, Law 51 and Decree 40 set forth certain additional registration requirements.

Data Protection officers

Appointment of a data protection officer is not required.

collection and Processing

In Panama, personal information is protected at the constitutional level. The Constitution provides that any person or entity that obtains personal information and/or personal documents, either from a person or a company who provides such information willingly, or through any other means, may not disclose such information without the consent of its lawful owner (there

is no specific definition or explanation of who is considered the “lawful owner” of personal information). An exception to the consent rule is the disclosure of such information pursuant to a valid judicial or governmental request.

The disclosure of personal information without consent is also prohibited by the Panamanian Criminal Code. Criminal penalties apply to the disclosure of personal information when the disclosure causes harm to the information’s lawful owner. Law 51 specifically establishes that this criminal law prohibition applies to electronically stored information.

Panamanian law further requires that providers of online data storage services take reasonable measures to ensure that company personnel who come into contact with confidential information do not have a criminal record, have obtained the necessary technical skills

to handle such data and information, and possess reasonable knowledge of existing legal restrictions related to the disclosure of such information. Although this prohibition is specifically intended to apply to entities that provide online data storage services, it is not unforeseeable that it could also be construed to apply to any company engaged in e-commerce.

Transfer

Although the Panamanian e-commerce regulatory framework is not yet fully developed, the existing regulations follow the constitutional principle that the consent of the lawful owner is required for the transfer of any personal information.

Pursuant to Law 51, when a customer provides his email address during the process of acquiring or subscribing to a service offered online, the company providing such service must disclose to the customer its intent to use the email address in the future for commercial communications and, further, must obtain the customer’s express consent for such purposes.

The client or customer must also be able to revoke such consent easily, through a simple process made available by the provider of the service.

While the manner in which this restriction appears to have been drafted suggests that it applies exclusively to online service providers, its broader application to all companies that sell products online or are engaged in e-commerce activities is foreseeable.

Security

Decree 40 establishes certain security requirements applicable only to electronic data storage and electronic signature verification companies, for whom registration with the DGCE is mandatory. The main requirements are adherence to the security parameters periodically published by the DGCE, and the performance of annual self-audits, the results of which must be filed with the DGCE in order for the company to renew its registration. In addition, these

companies must create a disaster recovery plan that allows such providers to re-establish regular operations within twelve hours of the occurrence of a disruptive event.

No similar provisions have been enacted with respect to companies who engage in other types of e-commerce, ie, those for whom registration is voluntary.

Breach notification

Law 51 does not require breach notification.

Enforcement

The DGCE is responsible for enforcement of the existing e-commerce and related regulations, including the publication of additional complementary regulations. Sanctions include the suspension or permanent ban of the activities of companies that infringe certain regulations, as well as fines of up to US$150,000.

Electronic Marketing

With respect to email advertising, Panamanian law requires that all such emails: (i) state that they are commercial communications; (ii) include the name of the sender; and (iii) set forth the mechanism through which the recipient may choose not to receive any further communications from the particular sender. These requirements apply to other promotional offers as well.

Further, although opt-out tools are not prohibited, the client’s initial opt-in consent is specifically required to use the client’s email for advertising purposes. Further, although no specific prohibition has been enacted with respect to the use of information for online advertising, obtaining the customer’s consent is always preferable.

Online Privacy (including cookies and Location Data)

The existing regulatory framework does not yet address location data, cookies, local storage objects or other similar data-gathering tools.

The Republic of Panama has a set of provisions related to criminalization of the acts of corruption in its Criminal Code.

(In Spanish)

Código Penal

Título X Delitos Contra la Administración Pública

Capítulo I Diferentes Formas de Peculado

Artículo 332. El servidor público que sustraiga o malverse de cualquier forma, o consienta que otro se apropie, sustraiga o malverse de cualquier forma dinero, valores o bienes, cuya administración, percepción o custodia le hayan sido confiados por razón de su cargo, será sancionado con prisión de cuatro a diez años.

Si la cuantía de lo apropiado supera la suma de cien mil balboas (B/.100,000.00) o si el dinero, valores o bienes apropiados estuvieran destinados a fines asistenciales o a programas de desarrollo o de apoyo social, la pena será de ocho a quince años de prisión.

Artículo 333. El servidor público que, en ejercicio de su cargo y aprovechándose de error ajeno, se apropie, sustraiga o utilice, en beneficio propio o de un tercero, dinero, valores o bienes nacionales o municipales será sancionado con prisión de cuatro a ocho años.

Artículo 334. El servidor público que culposamente da ocasión a que se extravíen o pierdan dinero, valores o bienes, cuya administración, percepción o custodia le hayan sido confiados por razón de su cargo, o da ocasión a que otra persona los sustraiga, utilice o se apropie de ellos, en beneficio propio o de un tercero, será sancionado con prisión de tres a seis años.

La persona que, aprovechándose de dicha conducta, sustraiga, utilice o se apropie del dinero, valores o bienes a que se refiere el párrafo anterior, será sancionada con prisión de cuatro a seis años.

Artículo 335. El servidor público que, para fines ajenos al servicio, use en beneficio propio o ajeno, o permita que otro use dinero, valores o bienes que estén bajo su cargo por razón de sus funciones o que se hallen bajo su guarda sera sancionado con prisión de uno a tres años, o su equivalente en días-multa o arresto de fines de semana.

La misma pena se aplicará al servidor público que utilice trabajos o servicios oficiales en su beneficio o permita que otro lo haga.

Artículo 336. El servidor público que dé a los caudales o efectos que administra una aplicación o función pública distinta de aquella a la cual estuvieran destinados y resulta afectado el servicio o función encomendado, será sancionado con prisión de uno a tres años.

La pena será de tres a seis años de prisión, si se actúa con el propósito de obtener un beneficio propio o para un tercero, o si los caudales o efectos estuvieran destinados a fines asistenciales o a programas de desarrollo o de apoyo social y resulta afectado el servicio o función encomendado.

Artículo 337. Las disposiciones de este Capítulo son extensivas:

1. A quien se halle encargado, por cualquier concepto, de fondos, rentas o efectos de una entidad pública.

2. Al particular legalmente designado como depositario de caudales o efectos públicos.

3. Al administrador o depositario de dinero o bienes embargados, secuestrados o depositados por autoridad pública, aunque pertenezcan a particulares.

4. A las personas o a los representantes de personas jurídicas que se hallen encargados de administrar dinero, bienes o valores que formen parte de una donación realizada para el Estado proveniente del extranjero o hecha por el Estado para obras de carácter público y de interés social.

5. A los trabajadores de empresas de servicios públicos en las que el Estado tenga participación económica, salvo que una ley especial establezca otra situación.

Artículo 338. Cuando antes de dictarse la resolución de elevación de la causa a juicio, el responsable de los delitos descritos en los artículos 332, 333 y 335 reintegra los dineros y sus intereses, bienes o valores objeto de los delitos, la sanción se reducirá a la mitad. Si lo hace después de dictado el auto y antes de la sentencia de primera instancia, la reducción será de una tercera parte.

Capítulo II Corrupción de Servidores Públicos

Artículo 339. Será sancionado con prisión de dos a cuatro años el servidor público que, personalmente o por persona interpuesta, incurra en las siguientes conductas:

1. Acepte, reciba o solicite donativo, promesa, dinero o cualquier beneficio o ventaja, para realizar, omitir o retardar un acto en violación de sus obligaciones, o quien las acepte a consecuencia de haber faltado a ellas.

2. Acepte, reciba o solicite donativo, promesa, dinero o cualquier ventaja o beneficio indebido, para realizar un acto propio de su cargo o empleo, sin faltar a sus obligaciones, o como consecuencia del acto ya realizado.

Artículo 340. El servidor público que, desempeñándose como miembro del Órgano Judicial o del Ministerio Público, autoridad administrativa, árbitro o cualquier cargo que deba decidir un asunto de su conocimiento o competencia, personalmente o por persona interpuesta, acepte, reciba o solicite donativo, promesa, dinero, beneficio o ventaja para perjudicar o favorecer a una de las partes en el proceso, o a consecuencia de haber perjudicado o favorecido a una de ellas, será sancionado con prisión de cuatro a ocho años.

Igual sanción se aplicará al funcionario del Órgano Judicial o del Ministerio Público que:

1. Por colusión o por otros medios fraudulentos, profiera resolución manifiestamente contraria a la Constitución Política o a la ley, de modo que cause perjuicio.

2. Por colusión o por otros medios fraudulentos, reciba o dé consejos jurídicos a cualquiera de las partes, de modo que cause perjuicio.

3. Por imprudencia grave o ignorancia inexcusable, dicte sentencia manifiestamente contraria a la Constitución Política o a la ley, de modo que cause perjuicio.

4. Retarde maliciosamente un proceso sometido a su decisión.

Si de las conductas previstas en este artículo resulta la condena de una persona inocente, la sanción será de cinco a diez años de prisión.

Artículo 341. Quien, bajo cualquier modalidad, ofrezca, prometa o entregue a un servidor público donativo, promesa, dinero o cualquier beneficio o ventaja para que realice, retarde u omita algún acto propio de su cargo o empleo o en violación de sus obligaciones, será sancionado con prisión de tres a seis años.

Artículo 342. El servidor público que utilice a favor suyo o de un tercero información o dato de carácter reservado o confidencial y de acceso restringido del que tenga conocimiento por razón de su cargo será sancionado con prisión de cuatro a ocho años.

Artículo 343. El servidor público que acepte un nombramiento para un cargo público o perciba remuneración del Estado sin prestar el servicio al cual ha sido designado, sin causa justificada, será sancionado con ciento cincuenta a trescientos días-multa o trabajo comunitario.

Artículo 344. Cuando cualquiera de las conductas descritas en los artículos 339, 340 y 341 de este Código, se realice sobre un servidor público de otro Estado o funcionario de organismo internacional público, para que dicho servidor o funcionario realice, omita o retarde cualquier acto en violación de sus obligaciones, o para que realice algún acto propio de su cargo o empleo, o a consecuencia de los actos ya realizados, la sanción será de prisión de cinco a ocho años.

Capítulo III Enriquecimiento Injustificado

Artículo 345. El servidor público que, personalmente o por interpuesta persona, incremente indebidamente su patrimonio respecto a los ingresos legítimos obtenidos durante el ejercicio de su cargo y hasta cinco años después de haber cesado en el cargo, y cuya procedencia lícita no pueda justificar será sancionado con prisión de tres a seis años.

La pena será de seis a doce años de prisión si lo injustificadamente obtenido supera la suma de cien mil balboas (B/.100,000.00).

La misma sanción se aplicará a la persona interpuesta para disimular el incremento patrimonial no justificado.

Para efectos de esta disposición, se entenderá que hay enriquecimiento injustificado, no solo cuando el patrimonio se hubiera aumentado con dinero, cosas o bienes, respecto a sus ingresos legítimos, sino también cuando se hubieran cancelado deudas o extinguido obligaciones que lo afectaban.

Capítulo IV Concusión y Exacción

Artículo 346. El servidor público que induzca a alguien a dar o a prometer indebidamente dinero u otra utilidad en beneficio propio o de un tercero será sancionado con prisión tres a seis años.

Artículo 347. El servidor público que cobre algún impuesto, tasa, gravamen, contribución o derecho inexistente sera sancionado con prisión de tres a seis años. Si el cobro es legal, pero se usa algún medio no autorizado por la ley, la sanción será de seis meses a un año de prisión o su equivalente en días-multa o arresto de fines de semana.

Capítulo V Tráfico de Influencias

Artículo 348. Quien valiéndose de su influencia o simulando tenerla, solicite, reciba, acepte promesa o prometa en beneficio propio o de un tercero, dinero, bienes o cualquier otro provecho económico o con efecto jurídico, con el fin de obtener un beneficio de parte de un servidor público o un servidor público extranjero de una organización internacional en asunto que se encuentre conociendo o pueda conocer, será sancionado con prisión de cuatro a seis años.

La pena será de cinco a ocho años de prisión, si quien ejerce o simule influencia es un superior jerárquico de quien conoce o debe conocer el asunto de que se trata.

Panama – Know Your Customer (KYC) Rules

Panama‘s strategic geographic location and status as a regional financial center make it an attractive jurisdiction for money launderers. Panama‘s success in establishing itself as a regional business and logistics hub, based on the success of its ports, airport and the Colon Free Zone – the second largest free trade zone in the world – have enhanced its attractiveness for organizations engaged in illicit financial activities.

Money laundering in Panama is believed to be primarily related to the laundering of the proceeds of drug trafficking, and the country sits along major drug trafficking routes. The work of launderers is facilitated by weaknesses in the regulatory framework, notably the existence of bearer share corporations, but more importantly by uneven enforcement of anti-money laundering measures and the weak judicial system, which is susceptible to corruption and favoritism.

After negotiating and signing 13 Double Taxation Treaties with OECD members, and ratifying the Tax Information Exchange Agreement with the United States in 2010, Panama achieved removal from the OECD‘s gray list of tax havens in July 2011.

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs:

A PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: NO
    • Domestic PEP: NO

Panama – KYC covered entities

The following is a list of Know Your Customer entities covered by Panamanian Law:

    • Banks, savings cooperatives, savings and mortgage banks, and money exchanges
    • Investment houses and brokerage firms
    • Insurance and reinsurance companies
    • Fiduciaries
    • Casinos
    • Free trade zone companies
    • Finance companies
    • Real estate brokers
    • Lawyers

Panama – Suspicious Transaction Reporting (STR) Requirements:

Number of STRs received and time frame: 563 in 2010

Number of CTRs received and time frame: 495,546 in 2010

The following is a list of STR covered entities covered by Panamanian Law:

    • Banks, cooperatives, and money exchanges
    • Casinos
    • Fiduciaries
    • Insurance companies
    • Government entities focused on the lottery
    • Investment houses

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available
Convictions: 22 in 2010

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Panama cooperates well with U.S. law enforcement agencies. However, the notable successes the Government of Panama (GOP) has had in interdicting flows of illegal drugs have not been matched by similar success in addressing money laundering concerns. The various government agencies tasked with addressing money laundering remain fractured and under-resourced, and communicate poorly with one another. Panama‘s financial intelligence unit, the UAF, in particular, lacks the resources to process and investigate, let alone enforce, reporting requirements on suspicious transactions. The judicial branch‘s capacity to successfully try and convict money launderers remains weak, and judges remain susceptible to corruption. Although the GOP took a step forward with the introduction of know-your-client legislation requiring lawyers to conduct due diligence into the beneficial owners of the companies they incorporate, the continued existence of bearer shares corporations remains a vulnerability of the anti-money laundering regulatory framework.

Panama, through its Customs Authority, is taking steps to reduce the use of Tocumen Airport as an artery for cash couriers to move cash into Panama. More targeted enforcement action, in collaboration with U.S. law enforcement agencies, has led to increased scrutiny of passengers and notable seizures of undeclared cash at the airport.

Customs also has been effective in disrupting trade-based money laundering through the partnership of the Panamanian and U.S. trade transparency units (TTU). Established in 2010 by U.S. Immigration and Customs Enforcement and Panama‘s Customs authority, the Panamanian TTU has had significant success. Despite these advances, Customs lacks sufficient resources to fulfill its mandate.

The Colon Free Trade Zone (CFZ) continues to be vulnerable to abuse by criminal groups through illicit financial activities, due primarily to insufficient enforcement of existing controls. The new electronic transaction recording information system, when fully implemented, will improve capacity to trace transactions. Bulk cash is relatively easily introduced into the country by declaring it is for use in the CFZ. A new resolution, published December 14, 2011, improves the AML/CFT framework in the CFZ. The resolution has 25 articles that supersede and include all the provisions of law 42 of 2000 and Decree JD-008 of 2008. It will enter into force 60 days after publication. Among the items addressed are the requirement to have a compliance officer in each company; implementation of preventative measures, supervision, inspection and sanctions; STR and CTR reporting; and know your customer policies.

During 2011, the GOP took steps to continue to improve the legislative framework governing anti-money laundering and financial sector transparency. In 2011, Panama passed legislation (Law 2 of 2011) requiring lawyers to know their clients, conduct due diligence on the beneficial ownership of corporations they establish and share that information with the authorities upon request. These steps have strengthened Panama‘s regulatory framework. Panama also is drafting new anti-money laundering legislation, which would strengthen the UAF‘s authority and increase the number of sectors required to report suspicious transactions.

If the GOP continues its efforts to improve its anti-money laundering legal framework, particularly eliminating bearer shares, criminalizing ―tipping off,‖ improving the strength of the prosecutor‘s office and the judicial system, and creating a more transparent financial network, money laundering will become more difficult within Panama‘s borders.

Risk

Sovereign risk

Assuming that GDP grows by 5.5% this year, we expect the government to narrow the fiscal deficit to 2.5% of GDP, from an estimated 4.1% in 2014, which reflected election-related overspending by the previous administration. This is expected to keep the public debt/GDP ratio just below 40% of GDP, a threshold in The Economist Intelligence Unit’s model.

Banking sector risk

Low levels of non-performing loans (NPLs), together with high capitalisation and liquidity levels, underpin the outlook for the banking sector.

Political risk

The governing Partido Panameñista, led by the president, Juan Carlos Varela, lacks a majority in Congress and is reliant on the centre-left Partido Revolucionario Democrático for support in Congress. This sustains uncertainty over governability.

Economic structure risk

Panama’s rating reflects improvements in GDP per head, which has been driven by double-digit economic growth in recent years. However, the country’s small, open economy remains heavily dependent on international trade and capital flows.

Travel Risk

Security

The decision to travel is your responsibility. You are also responsible for your personal safety abroad. The Government of Canada takes the safety and security of Canadians abroad very seriously and provides credible and timely information in its Travel Advice. In the event of a crisis situation that requires evacuation, the Government of Canada’s policy is to provide safe transportation to the closest safe location. The Government of Canada will assist you in leaving a country or a region as a last resort, when all means of commercial or personal transportation have been exhausted. This service is provided on a cost-recovery basis. Onward travel is at your personal expense. Situations vary from one location to another, and there may be constraints on government resources that will limit the ability of the Government of Canada to provide assistance, particularly in countries or regions where the potential for violent conflict or political instability is high.

Crime

Petty theft occurs in rural and urban areas of Panama. Violent crime is not frequent, but does occur throughout the country.

Theft from hotel rooms occurs in both urban and resort areas. Stay in busy, reputable and well-protected hotels and always verify the identity of a visitor before opening your door. Ensure that your personal belongings, passports and other travel documents are secure at all times.

Incidents of both petty theft and some violent crimes have been reported in areas frequented by tourists. Avoid displaying signs of affluence or carrying large sums of cash, and be cautious when withdrawing money from automated banking machines. Ensure that windows and doors are secure and locked in both private and commercial accommodations.

In Panama City, high-crime areas include Calidonia, San Miguelito, Juan Diaz, Rio Abajo, El Chorillo, Ancón, Curundú, Veracruz Beach, Parque Soberania and Tocumen, as well as bus stations and shopping areas on Avenida Central. Some violent crime has been reported in the cities of Colon and David, as well as in some beach communities.

Do not walk alone after dark and stay within well-known tourist areas. Remain vigilant in all public places, especially at airports and bus terminals.

Demonstrations

Demonstrations and protest marches over various social and political issues occasionally occur in Panama City near the university, and on main streets and highways. These demonstrations are unpredictable and could potentially lead to violence. Avoid large gatherings and demonstrations, and monitor local news reports.

Road travel

Poor road conditions, dangerous driving habits, and poorly lit streets and vehicles are hazards. Keep car windows closed and doors locked at all times.

Night construction on the Pan-American Highway is frequent. Be prepared for possible roadblocks.

Marine travel

The southeastern coast of Comarca Kuna Yala, on the Caribbean, and Coiba Island as well as the entire length of the Pacific coast, are known as transportation corridors for narcotics. To visit the national park on Coiba Island, you must obtain special permission from the Panamanian Ministry of Government and Justice and the National Environment Authority.

Public Transportation

Local bus travel within Panama City has improved in recent years; however, buses do not always follow a regular route. Panama opened line 1 of its new metro system in early 2014, which currently runs from the Albrook bus terminal to the Los Andes commercial centre. When using public transportation, be aware of your surroundings and protect your belongings.

Registered yellow taxis are generally safe if located at a taxi stand. Sharing a taxi with strangers is not recommended, and passengers should sit in the back of the vehicle. Taxis are not metered, and fares are calculated according to the number of zones crossed to get to a destination. Agree to a fare before departure, as many fees are inflated for tourists.

See Transportation Safety in order to verify if national airlines meet safety standards.

General safety information

Some beaches on both the Pacific and Caribbean coasts can be dangerous, as there are strong currents and undertows, and drownings have occurred. Most beaches lack sufficient rescue equipment and are not adequately monitored or marked.

Emergency services

Dial 104 to reach local police and 103 for firefighters. 911 will reach ambulance services; however, an ambulance may not always be available. There are also private ambulance services available on a subscription basis.

Address Format

RECIPIENT

[BUILDING] [FLOOR] [APARTMENT]
[[STREET_TYPE STREET_NAME] [HOUSE_NUMBER]]
[DEPENDENT_LOCALITY]
[APARTADO OFFICE_BOX_NUMBER]
POSTAL_CODE, POST_OFFICE
PROVINCIA DE PROVINCE
PANAMA

Sample

MARTÍN GUTIERREZ
Via Israel 3
0424, VOLCÁN
Chiriquí
PANAMA

Summary

Calendar GMT Reference Actual Previous Consensus Forecast
2013-03-11 03:00 PM Q4 2012 10% 10.6%
2013-09-13 08:00 PM Q2 2013 7.6% 7.0% 6.5%
2013-12-20 05:00 PM Q3 2013 8.9% 7.7% (R) 6.62%
TOP
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