Monday, March 11, 2013

Majority of Panama lawyers oppose restriction to bearer shares

Bill 568 is being discussed which would require that bearer shares of Panama corporations be held in custody by a Panama lawyer, trustee, bank or foreign authorized banks.  Panama Bar Association (Colegio Nacional de Abogados) which comprises the majority of Panamanian attorneys, the Lawyers' Guild Movement (Movimiento Gremialista de Abogados) and Inter-American Bar Association Panama chapter and the largest law firm in Panama Morgan and Morgan, directly reject the initiative as a threat to the competitiveness of Panamanian legal structures.   The bill allows foreign banks to serve as custodians of bearer shares, which would then be subject to Panama confidentiality laws and veil piercing laws of their home countries.

Other law firms with a total of 250 attorneys, as Arias, Fabrega & Fabrega-the oldest of Panama; Mossack Fonseca & Co., Aleman, Cordero, Galindo & Lee, Alfaro, Ferrer & Ramírez; Galindo, Arias & Lopez, Arias, Aleman & Mora and attorneys Icaza, Gonzalez-Ruiz & Aleman, are in favor of restricting bearer shares as confirmed by Jaime Alemán of 
Aleman, Cordero, Galindo & Lee.  These law firms incorporate a substantial number of entities and have offices in British Virgin Islands (BVI) and other jurisdictions where bearer shares are already subject to immobilization with a limited number of custodians.
The Panamanian Association of Business Executives (APEDE) has also rejected the initiative.

Panama Corporation System for Bearer Shares meets OECD KYC Requirements
Last year, Australian professor Jason Sharman made a comparative assessment of Panama’s compliance with international OECD transparency standards of corporate beneficial ownership with special reference to bearer shares. Panama’s compliance with beneficial ownership standards was judged relative to the legal standards and actual practices extant in major OECD competitors, especially the United Kingdom and the United States.  He found that Panama's compliance measures exceeded those in place in OECD countries and made unnecessary the immobilization of bearer shares.

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See also Attorney discusses restrictions on bearer shares

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