• Panama Adopts New Legislation to Supress Money Laundering, Terrorism Financing and Massive Weapons Proliferation
  • February 5, 2016 | Author: Juan Jose Espino S.
  • Law Firm: Pardini & Asociados - Panama Office
  • By means of Law 23 of 2015, the Government of Panama has promoted a new legislation to combat money laundering, terrorism and weapons acquisitions.

    The Law responds to the continuous international claims and the listing of Panama in the FATF gray list. Law 23 uses as template the FATF standard. Some of the most important aspects are:

     - The Law provides a general description, whereby it grants to different supervisory organizations and entities the capacity to supervise different types of activities that are possible vehicles to facilitate money laundering, terrorism financing and massive weapons proliferation.
    The current existing entities are:
    • The Banking Superintendence
    • The Insurance and Reinsurance Superintendence
    • Securities Comission
    • The Cooperatives Institute

    The Non Financial Activities Intendence is still to be created.

    It is worth mentioning that the law establishes a special classification for what are defined as non financial related activities, some of which are:
    • Free Zones
    • Money transfer services
    • Casinos and gambling, including internet
    • Real estate developers, brokers
    • Construction companies
    • Secure logistics and Valuables transportation
    • Currencies exchange houses
    • Pawn brokering
    2- Professional Activities
    Article 24 of Law 23 lists the professional activities to be supervised by the Non Financial activities Intendence, and these include:
    • Legal profession
    • Accounting
    • Notary services, and activities or services related to
    • Real estate transactions
    • Fund management, escrow services, securities custody services
    • Bank account management
    • Organization, operation and management of structures and entities such as trusts, companies and foundations, including their sale internationally
    • Acting as a nominee stockholder or director or legal representative
    • Provision of domicile services
    • Acting as agent of a company
    3- Due Diligence and KYC Obligations

    Finally, the Law establishes the obligation for all services providers, financial and non financial, to establish due diligence and know your clients processes. Standards of which are contemplated in Title V, articles 26 to 47 of Law 23.

    Title VII, in its Art 53, establishes the obligation to all supervised service providers to record and provide information upon request from the authorities on suspicious transactions for over US$10,000.00.

    Art 54 of the same Title, establishes the obligation to all service providers, financial and non financial, to report any suspicious transaction or operation related to money laundering and terrorism financing.

    Provided that the situations are reported within the time and compliance required by Title VII, all employees and directors of the financial or non financial entity that provide the report shall be protected in confidentiality and exempted from criminal and civil responsibility.

    Title IX contemplates possible sanctions to those financial and non financial services providers that incur in infringement of this Law, which additionally grants the supervisory entities the capacity to regulate and implement additional sanctioning proceedings.