Panama Investor Blog

Panamanian Judge sentenced to Prison after being suspended and placed in house arrest

 

 

 

 

 

 

 

 

 

 

 

 

 

For the first time in Panama, a three-member judicial panel sentenced a suspended Panamanian Supreme Court Justice Alejandro Moncada Luna to five years in prison for unjustified enrichment in an unusual case of corruption that captured this Central American nation's attention.

Not knowing under what terms it actually happened, the tribunal approved on Thursday an agreement in which former high court justice Alejandro Moncada Luna pleaded guilty to the charges. He was transferred to jail. Moncada Luna had been under house arrest during the judicial process.

In 2009, Moncada Luna was named to a 10-year-term as one of nine Supreme Court justices under the administration of then-President Ricardo Martinelli.The three-member panel suspended Moncada Luna as a justice in October and placed him under house arrest. It was the first case of a criminal conviction against a member of Panama's highest court, making it a historical event. 

Retirement has a Throne

Every year a country of this Planet is proclaimed the #1 place to enjoy the rest of your life after retirement, and its no big surprise that Panama earned this title amongst our civilization. The Annual Global Retirement Index (now on its 23^rd year) ranks the best international retirement destinations, and together with factors provided by InternationalLiving.com ranging from the price of groceries and average temperature, to utility costs and the friendliness of locals, the editors assess the results. After they do all the math, the result concludes that there is simply no other place where retirees can get more for their buck.  PANAMA is the place to be!

Panama is rapidly becoming a Capital for the world to invest into and this brings lots of incentive programs to make it a place worthy of spending the rest of live in. Having the American dollar as a currency and English as a widely understood language, it’s a magnet for retirees moving from the US and the world. This Central American nation has several significant reasons for obtaining this title, such as its pensioner residence program that offers discounts on real estate loans, medical expenses, pensioners entertainment expenses and much more. But most significantly the immigration process has been simplified for foreigners.

Panama has introduced new visas in the past year, that have made it easier to gain residence; and having a population of around 4,000,000 with a growth of 75,000-80,000 a year, has been a factor that encouraged major advances in infrastructure and boosted the economy in many ways. But besides many factors that make this country a “Happening” place, the low cost of living, the heavenly climate found across the country and the incredible scenery all around are key factors of this judgment.  

Some quotes from an Article on Forbes regarding this announcement are:

 

“If you’re planning to retire abroad—because you want to live better for less, diversify your investments or enjoy a greater degree of adventure—you should consider Panama…”

 

“Panama ranked No. 1 this year because it offers a “great combination of variety and value,” “No matter what it is you’re hoping to find, Panama is a good place to look for it.”

 

The Top 10 places on the list were:

1- Panama

2- Ecuador

3- Malaysia

4- Costa Rica

5- Spain

6- Colombia

7- Mexico

8- Malta

9- Uruguay

10- Thailand

Contact us if you are considering Panama for your next social or economic adventure! – we will gladly help you out, and point you to the right direction based on what you desire.

Jail for mistreating animals in Panama

As an animal lover I have happy to see some laws to protect them from abuse. I just hope they don't cary it too far. I have not seen many instances of animal abuse in Panama, but I hear it is prevalent. Here is an article from La Prensa about some old and new laws ragrding animal cruelty. Machine translated so excuse errors.

Mónica Palm
[email protected] 

 In November 2009, Edgar Santos machetes killed a dog in Quebrada Onda, in the indigenous region of Duima Nole.

 One of his neighbors complained and is now required by the Municipal Court of Remedios.  It is, officially recognized by the judiciary, the first prosecuted criminally for the crime of animal abuse.

 Santos, 28, was found "guilty rebel" and not go to court.  If one day he is convicted, is liable to a fine of 100 to 200 daily fines or community work.

 A Pascual Rodriguez, meanwhile, the second municipal judge in Columbus, criminal branch, which passed with 20 months and 12 days in jail for committing the crime against the environment and land use (in the form of anti-wildlife).

Was surprised by Colorado mountain rangers in the area of North Hut, when wearing a collared peccary and agouti are both dead, threatened and endangered species, "a 22-caliber rifle and 19 unexploded ordnance.

Against Rodriguez could be sentenced to 32 months in prison, but as we hosted a short trial and admitted the facts, reduced his sentence.

 Defined crime

 It was from May 2008, with the entry into force of new Penal Code, which established penalties for "anyone who commits acts of cruelty, causing death or seriously injures an animal used as a pet."

 Sanctions are 100 to 200 day fines or community work. However, the government deputy Victor Juliao encourages reforms to the Penal Code to punish with imprisonment those who abuse pets.

 Under a draft law presented by Juliao in August 2010, anyone who causes injury to a pet will be punished with imprisonment of one to four months and a fine of $ 100 -1000 dollars. Also, you will forfeit the animal.  If due to injury, the animal dies, the penalty is increased to double.

 "I know people who keep their pets chained long time, in dismal conditions and lack of food and proper treatment. With this legal instrument is to orient and then punish these men and women who have lost this virtue, the nobility of living in harmony with animals, "said Juliao in its preamble.

As "abuse", the draft considered not provide water or food to the animal, keep it dirty or parasites, not to provide medical treatment or hitting, kicking, dragging or overload.

 The proposal also intends to punish with a fine of $ 200 thousand dollars to practice acts of bestiality.

 Also prohibits fighting and dog racing or any other animal species into the country and performance of any show that uses circus animals.  This is punishable by confiscation of the animals, and a fine of one thousand to 45 thousand dollars. Repeat offenders will be temporarily or permanently close the premises.

 The draft, which this week was prohijado Legislative Commission on Population, Environment and Development, also prohibits the sale of animals in public.

Obstacles to experiments

The initiative proposed by the government deputy Victor Juliao also focuses on animal testing, something that until now, not under the Penal Code.

The deputy suggested that the experiments are done when no other alternative procedures to obtain the desired results, and only in cases of control, prevention, diagnosis and treatment of diseases.

No animal may be used more than once in the experiments and these will be taken care of, fed and cured, before and after practice.  For the experiment, the animals have to be sedated, tranquilized or anesthetized.

 Euthanasia when the animal shall only be with mutilation, blindness or severe pain.

Panama will still allow bearer shares but...

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
  [email protected]

 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..

 

 

Is this the end of Society Anonymous (S.A.) in Panama?

A new piece of legislature was brought to my attention from LA Prensa today and could be the death knell for everyone wanting to keep their ownership of Panama corporations private unless they want to take additional steps and incur additional costs. According to this new bill all registered agents will be required to disclose who the beneficial shareholders are even if they are barer shares.

NOW, before everyone begins claiming that this is the end of privacy in asset ownership in Panama, consider several other solutions. One is the Private Interest Foundation and the other is to have the shares owned by another OFFSHORE corporation. This is a rather simple and a bit more expensive way to protect ones privacy, but could be well worth it. In any case I would think that the attorneys in Panama will make out pretty well as they will get to sell even more corporations and foundations. Brought to you by the demanding folks at the OECD. 

Bill would add transparency to financial services industry
The Ministry of Economy and Finance has proposed a bill that would require registered agents to record the beneficial owners of corporations, including those controlled by bearer shares.
The law includes sanctions for entities that do not comply with the regulations.
"It is something that Panama has to do to meet the requirements of double taxation treaties," said Deputy Minister of Economy and Finance Frank De Lima. "Panamanian legislation allows the use of bearer shares, and authorities need to know who the owner of those shares are to give the required information to the country requesting it."
The change is one of those being demanded by the Organization for Economic Cooperation and Development (OECD) to increase the transparency of Panama's financial services industry. The changes are needed to remove Panama from the list of tax havens compiled annually by the OECD.
De Lima said that some of the recommendations made by the OECD have already been implemented.

(original article in Spanish)

Now here is why Panama is making this move now and what they must do to comply.

From today's Tax-news.com

The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Forum) criticized Panama in its phase one peer review covering the legal and regulatory framework.

The peer review stated that Panama could not move to phase two until it had acted on recommendations that:

• Ownership and identity information was available, including on bearer shares and shares held by nominees;
• “Know your client” rules specify the need to identify owners of companies, founders, members of council, and beneficiaries of foundations. Penalties should apply for failure to keep up to date details on the stock register of any “sociedad anonima”;
• Reliable accounting records are kept; Commercial Code requirements should apply to all companies, partnerships and partnerships limited by Panama registered shares, irrespective of whether they carry on business in Panama or not. Record keeping requirements for trusts and foundations should be clarified to ensure accounting information is reliable and kept for at least five years;
• The statutory powers of the General Revenue Directorate (DGI) should include obtaining information for tax exchange purposes, not just where there is a domestic tax purpose as is presently the case; this power should be recognized as overriding any other obligations to secrecy. Penalties should apply under the fiscal code for failure to provide the necessary information;
• Panama bring into force the necessary tax information exchange agreements wherever relevant; and
• Professional secrecy rules should be amended so that they did not prevent the exchange of information for tax purposes, especially in respect of lawyers acting as resident agents.

In response, the present government of Panama reaffirmed its commitment made in 2002 to implement transparency and exchange of information for tax purposes based on its commitment letter, and to this end it is:

• Entering into double taxation conventions with mechanisms to exchange tax information based on international norms;
• Modifying legislation to enable tax information exchange; and
• Creating the necessary operational framework.

The Panama government added that Law 8 of March 2010 was enacted to provide the necessary powers to the DGI for tax information exchange. Law 33 of June 30, 2010 was further enacted to address OECD concerns regarding the scope of powers given to the DGI and also covered transfer pricing, permanent establishment and tax residency definition.

With regard to establishing an operating infrastructure, the Panamanian government said it had been taking advice from the United Nations Development Program since June 2010 to set up an international tax office within the DGI.

For early 2011, the government said further legislation was planned which would establish the obligation to maintain shareholder information, including on bearer shares, as part of “know your client” rules, with the competent authority to supervise the process and determine sanctions for non-compliance. It also expects to complete twelve double taxation treaties by the first quarter of 2011 and continue to negotiate more agreements for tax information exchange.

The government also hopes that the Forum’s peer review group will be in a position to provide a supplementary evaluation of its May 2010 report in the first quarter of 2011.

Why no one invades Switzerland

The assembly of Panama is currently working on a bill to restrict gun ownership in response to the growing crime wave by drug gangs. Somehow they think that by restricting citizens from owning guns is going to keep the bad guys from getting them. This wrong headed approach is similar to that of many states in the U.S. even though studies clearly show that when citizens are not allowed to have weapons crime increases. The fact is that the bad guys will always find a way to get illegal weapons and will pray upon the unarmed populace.

Switzerland has long had the proper solution where every able bodied man is required to have a weapon in order to defend the country should it come under attack. The state provides the weapon and even trains the citizens on the proper use of these weapons and provides ammunition for practice. Check out this video.

Industrial benefits in Panama are confused and unused

Panama is well known for trade and services but industrial business represents only a small portion of their GDP. The government wants to increase this sector and developed a special incentive in hopes to get things going. Unfortunately, they have had zero success with the program and this article from La Prensa points out that delays and the fact that few people in the government understand the law and fewer companies know how to take advantage of it.

Triny MARY ZEA
[email protected]

Employers argue that there is confusion in implementing the use of this benefit, while the government says there is ignorance.

For the past six months since the regulations for the law that created the Industrial Development Certificate (IFC), no company has applied for the document that provides benefits to the industry.

When the initiative was introduced in 2009, it generated great expectations by industrial firms in the sector, but now suggests that there is misinformation and delays of the installation of the board of the National Industrial Policy (CONAPI), an entity that approves CFI applications.

The act is implemented in January after being approved by the National Assembly in October 2009. However, it was not until July this year CONAPI was installed, consisting of six representatives of the public and four private.

Juan F. Kiener, president of the Union of Industrialists (SIP), said the delay was in the agricultural sector.

Investment decisions are taken at the beginning of each year, so that this delay may IAPA said the companies "have not thought about investing." Among the benefits, the IFC will return 35% of agro-industries to invest in improving product quality, technology and cleaner production, and industries in other sectors are reimbursed 25% in the same investment.

The company Samuray Mar, exporting and processing fish nuggets, tried to apply the IFC and left disappointed by the Ministry of Commerce and Industry. "There are no clear rules, I have not seen a series of steps. The officials are entangled, "described the Samuray manager, Julio Maltez.

"There are people who do not understand the context of what is the law, no disclosure of how to access," Kiener also stressed.

However, the Deputy Minister of Industry and Commerce Ricardo Quijano said that to implement the IFC and everything is in order. "What may happen is that people do not know the law or is not industrialized," he said, and recalled that the country is not strong in the industry, but on trade and services.

Block a road and go to jail, I like it!

The Panamanian assembly is considering a law that will hand out two year prison sentences for intentionally blocking roads during protests. In Panama it is common practice for anyone with a beef to just block a road to get attention to their cause. This year a few locals blocked Boquetes main road for over an hour during morning rush hour while they protested a restaurant that wanted to put in slot machines. Panama City is always having road blockages for various issues people want to raise. Of course the unions are against such a law as they say it is the right of free assembly, but they give no thought to the difficulties this causes everyone who is trying to get to work or home or whatever. Common sense may reign in this matter and I for one am very happy about it.

from La Prensa:

José González Pinilla
[email protected] [email protected]

  The punishment of imprisonment for street closures came in last night to the full National Assembly, igniting the debate between the ruling and the opposition.

  Marcos Gonzalez, a member of Democratic Change, took up the proposal which was presented at the meeting last Monday by his fellow Augustine Sellhorn (alternate member), to punish with 365 days in jail who hinder the freedom of movement.

  Gonzalez reworked the proposal and presented a paper which states verbatim as follows: "Whoever, by abusing their right of assembly or demonstration, through the use of violence, prevent or impede the free movement of persons or vehicles on public roads in the country, or from damaging to the public or private property shall be punished with imprisonment of six months to two years. "

  The PRD bloc called the proposal the "jailhouse" that seeks to "intimidate" the people.

This article was included in the bill that restores the criminal record, which is discussed in the second debate.  In addition, he has included this project another controversial article, which complicates the political parties the implementation of the recall.

  At press time, the session was in the midst of PRD's legislative tactics to delay approval of the project in the second debate.

VEA 'Carcelazo' enciende debate

Criminal backgrounds soon available to employers

This sounds like something they would do in a nanny state like Europe or U.S., make criminal records unavailable except to police. The last administration did just that making records available only to law enforcement. An employer could not look into the criminal background of a prospective employee. He/she may have been convicted of embezzlement or worse, but as far as you the employer were concerned, it never happened. That is about to change as this administration has started the process to make the records available to employers. Although I am sure there are those who say they have paid there debt to society and should have a clean slate, I would ask, would you feel that way if you were hiring a maid, baby sitter or gardener and he or she had been convicted of child abuse, rape, home invasion or murder?

Isidro Rodriguez
  [email protected]

Members of the Committee on Interior and Justice National Assembly unanimously approved on first reading, the bill submitted by the Ministry of Government and Justice to amend certain sections of Act 69 of 2007 which allows access to the criminal background information (criminal record).

  This information will be issued by the Directorate of Judicial Investigation (DIJ) of the National Police, through a certificate of criminal record information.

  During the administration of Mireya Moscoso was issued Law 66 of 2001, which quashed the possibility that that the former Judicial Police to provide copies of criminal records and police to anyone who requests.

  MODIFICATIONS

  Initially, the project is now set to debate policing records could be requested by all persons interested in knowing the criminal history of an individual.  However, the project changed and now this information is only the owner can ask the competent authorities and natural or legal persons concerned, as prospective employers, with prior authorization from the owner.

  It was also established that the issue of criminal record for job applications will be free of charge.

  Javier Carrillo, director of the DIJ, explained that the amendment allows employers to know whom to hire.

"Panama has no rule of law"

Anyone who has had a serious dealings with the justice system knows that Panama has many laws but little or selective enforcement. It is one of the few countries that still uses the ancient inquisitional form of judicial process where the accused never has the opportunity to face his accusers or to have a jury hear his case should it be civil. All judicial process is done by written form to a judge you never see (unless you make "a deal") who makes his decision, which can only be appealed to a higher court. This all takes significant money. But the big cost is the bribe you may be asked to pay to get the decision in your favor. I am not saying that all judges in Panama are dishonest because I know of some who are dedicated and fair, but I have been involved in cases and heard enough others where there is no doubt many are. The system lends itself to graft and corruption where only the wealthy, connected and corrupted can win.

At "The foundation for due process conference" in Washington last week several prominent Panamanians gave testimony on the condition of the judicial system in Panama, and it wasn't pretty. See article below.

What does this mean to you who invest in Panama? Have very good "prominent" attorneys and avoid conflicts whenever possible. Most international companies do not have significant problems in Panama as they have good legal council who's name and clout can be enough to quell a potential action. Few individuals will bring a civil case against them because they know they will not have the financial clout to go very far. So who are vulnerable? Small investors or individuals who may have a valuable property wanted by someone with clout. These are the most common cases I know of. A Panamanian who brings an obviously lame case against a foreigner is not fighting an uphill battle. The local will be connected either through family, friends or judicial contacts and will more than likely win. The individual who comes to Panama to retire will probably never get involved in the legal system.

What should Panama do to clean up its act? First is to change the legal system to be one of common law where a case can be heard in a public forum and an accuser or claimant can be examined along with witnesses who testify under oath.

Cases involving foreigners should have over site by some outside government entity in order to shine the light on flagrant violations of justice, and hopefully apply additional pressure toward judges to rule objectively and fairly.

"Panama has no rule of law '

Betty Brannan Jaén

DC CORRESPONDENT IN WASHINGTON, DC
[email protected] 

Strong criticism of the Panamanian justice system made yesterday by Professor Miguel Antonio Bernal and executive director of the Citizens Alliance for Justice, Magaly Castillo during a conference organized by the Foundation for Due Process in Washington, USA.

  Panama does not fill any of the minimum requirements (...) must have judicial independence, constitutional supremacy [and] respect for due process.  These are minimum conditions, "said the professor.

  Bernal said that "part of the political class there is the will there is a rule of law", but there is a "smear campaign" against members of civil society to propose real reforms.  They want to "silence" he said.

  Castillo, meanwhile, noted that "the Supreme Court is very political," so that "we can say that there is a separation of state powers."  He added that civil society is being excluded from opportunities for dialogue on the issue of justice.

  Of all the countries of America, said, Panama is the only-with the exception of Haiti that still uses the inquisitorial system which records the highest rate of prisoners per capita.

  Bernal argued that Panama "is a complete absence of judicial independence" and "a complete abandonment of constitutionalism."

The suspension of the Solicitor General, Ana Matilde Gomez, little mentioned, except when Bernal claimed that the case was handled with "flagrant violation of due process."