Panama Banking Law Change: 02/08

New Panama Banking Law - The law is basically administrative in terms of giving more controls to the Panama Banking Superintendent having taken them away from other agencies to simply the operation of the Panama Banking System. The new law also heavily deals with protecting the rights of small depositors in Panama banks like the Panamanian workers. It basically establishes an office sort of like an Ombudsman to help a consumer handle a dispute with a bank. This law is designed to help the person who cannot afford to go out and hire an attorney. Please bear in mind if anything this law serves to help and protect you as a foreign depositor since you too could use the ombudsman to assist you if there was a dispute with a bank (uncommon) or you could retain us to contact the ombudsman on your behalf filing a complaint with their office.

Panama banks are still safe, secure, private and protected by Panama Bank Secrecy and none of this has changed nor is it likely to change. We have 17% of our work force employed by the banking sector and a change in the transparency or secrecy laws would cause massive unemployment here thus it is most unlikely since we already have an 8.5% unemployment now. Panama Banks still have a nice welcome mat with the words "Panama Bank Secrecy" clearly written on it. Nothing has changed regarding our anonymous corporations or foundations and there are no proposed changes either.

Panama New Banking Law Extracts for Banking Secrecy - Below are some excerpts from the recent Panama Banking Law poorly translated into English that covers confidentiality of banking records. This is to assure the most suspicious of clients that nothing has changed regarding the banking secrecy. You will see two crimes mentioned – Terrorism and Money Laundering. Panama does not have a broad interpretation of money laundering like some other countries who see fit to apply it to anything and everything, it means serious multi-million dollar money laundering and tied to narcotics and/or terrorism. Panama does not recognize anything civil from any other country including taxes, bankruptcy, divorce, alimony, child support, spousal support, or civil judgments.

ARTICLE 84. CONFIDENTIALITY ADMINISTRATIVE. Information obtained by the Superintendent in the exercise of their functions on individual customers of a bank, must be kept strictly confidential and may be disclosed only when required by competent authority, in accordance with the laws in force in the course of a criminal proceedings.

The Superintendence, including its entire staff and external auditors, consultants, interim managers, and reorganizadores liquidators appointed by her, shall maintain appropriate confidentiality of any information that has been provided or obtained under this Decree Law. Accordingly, it may not disclose to third parties, unless it was required by a competent authority in accordance with this article (think Panama Judge or Court for a competent authority). Excepted from this provision those reports or documents that, in accordance with the Decree Law and by their nature, are public and those to be provided in compliance with laws on the prevention of the crimes of money laundering, financing of terrorism and related crimes.

Civil servants who on the occasion of the positions they play have access to the information discussed in this article, are bound to observe appropriate confidentiality, even when they cease to function (means they are bound to confidentiality even after they leave their job).

ARTICLE 132. Article 85 9 1998 is as follows:

ARTICLE 85. BANK PRIVACY. Banks only divulge information about their clients or their operations with their consent. Banks will not require the consent of customers in the following cases:
1. Where the information they were required by a competent authority (think court) in accordance with the law.
2. When on his own initiative be provided in compliance with laws related to the prevention of the crimes of money laundering, financing of terrorism and related crimes.
3.A-rating agencies for the purpose of risk analysis (this is the general accounting records which could be audited by the rating agency but they may not violate any confidentiality of records).
4. For agencies or offices processing data for accounting purposes and operational.
In the case of paragraphs 3 and 4, will move full-fledged an obligation to maintain the confidentiality of the information provided.

ARTICLE 133. The name of Chapter XIII of Title III of Decree-Law 9 1998 is as follows:

CHAPTER XIII
CRIME PREVENTION OF MONEY LAUNDERING,
FINANCING OF TERRORISM AND RELATED CRIMES

ARTICLE 134. It adds Article 85-A to Decree Law No. 9 of 1998, as follows:

ARTICLE 85-A. PREVENTION OF CRIME. Banks and other subjects monitored by the Superintendent will have the obligation to establish the policies and procedures and structures of internal controls, to prevent their services from being used improperly in, for the crime of money-laundering, the financing of terrorism and other crimes related or similar nature or origin (any and all banks today anywhere each have an anti-money laundering committee to watch for money laundering activities inside their own bank).

The Superintendent will establish the framework for the scope, functions and procedures of the structure of compliance.

ARTICLE 135. It adds Article 85-B to Decree Law No. 9 of 1998, as follows:

ARTICLE 85-B. PROVISION OF INFORMATION. Banks and other subjects monitored by the Superintendency provided the information they require laws, decrees and other regulations for the prevention of the crimes of money-laundering, financing of terrorism and other crimes related or similar nature or origin, in force the Republic of Panama . Similarly, will be obliged to furnish the above-mentioned information to the Superintendent at its request. (Basically the banks have to show the Superintendent that they have anti-money laundering procedures in place, thus the anti-money laundering committee).

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