A new bill that has passed through the assembly seeks to qualm the fears of many foreign investors in Panama who have used bearer shares in the past. The OECD had demanded that Panama eliminate this form of privacy of anonymous share ownership. Now as long as the resident agent complies with the "know your customer" rules which means he or she knows who the holders of those shares are, then all is ok. The only problem with this is the fact that the fine for divulging any private information about the client is between $1000-25000. Why such a gap and why not some jail time? Also, bearer shares are meant to be able to transfer by handing them over to anyone at anytime. So, this will only be viable if the resident agent is officially informed and then he/she must vet the new holder of the shares. Bearer shares are always a risky business, but the purpose of them is to hide the owner from anyone and now they are exposed to a Panama attorney who may receive a slap on the wrist should he give up information. Although it states in the article below that no one but a court can request information, the new tax information exchange agreement with the U.S. does not say that. The IRS only needs cause. So now the Panama legal entities can still market and claim to have bearer shares, although their value is dubious if you are from the U.S. IMO.
Bill offers privacy guarantee
La nueva legislación permite que Panamá siga manteniendo su régimen de acciones al portador y la privacidad de la información. The new legislation allows Panama continues to maintain its system of bearer shares and information privacy.
Edith Castillo Duarte
Resident agents (lawyers or firms) will be required to implement measures to meet their customers and thus contribute to the fight against money laundering, terrorist financing and tax fraud nationally and internationally, through exchange of information in tax matters.
This legislation, approved last week by the National Assembly, third debate, states that the resident agents should require their customers satisfactory evidence of identity or the final beneficiary and when the stock certificates of these are issued to the bearer.
The information must be kept strictly confidential and can only be supplied to the competent authorities, which will be requested in compliance with the laws.
Violations of the covenant of attorney-client confidentiality with respect to the rules of "know your customer" shall be punished by a fine of one thousand dollars to 25 thousand dollars.
These requirements shall be due six months after the entry into force of this law for all resident agent to incorporate a new legal entity.
The deputy economy minister, Frank De Lima, believes that the law strengthens the international services sector. "We maintain competitive advantages such as bearer shares (other jurisdictions have been removed), nor are immobilized bearer shares as have other jurisdictions."
We also include the elements required to give effect to tax treaties that Panama has signed.
According to Gian Castillero, the International Bar Association, the project requires "reasonable and easy obligations to comply" with any lawyer who served as resident agent either do so in a law firm or as independent counsel.
Overall, the guild said it was satisfied with what was adopted in view of raising a good balance between the responsibility of the resident agent, guarantees privacy of information required by users of international services (which allows Panama remains an attractive jurisdiction) and the responsibilities of lawyers providing the service.
"The new legislation allows Panama to continue to maintain its system of bearer shares, which is a jurisdiction that guarantees the privacy of customer information and make it an attractive jurisdiction for international customers," he said.
PANAMA, THE OECD AND CONVENTIONS
13 - Panama treaties negotiated by the OECD to lead the country out of the gray list.
10 - Number of agreements that Panama has signed.
1 - treaty to exchange tax information with the U.S..