15 Panama banks under inspections by the Superintendent

The investigation on alleged corruption by former officials of the previous administration has resulted in doubts about the enforcement of Politically-Exposed Persons (PEP) KYC rules by local banks, since several of those officials were signatories of companies receiving funds from possible kickbacks.  The KYC procedures of 15 banks are subject to inspection.

---

Date: January 29, 2015

SUPERINTENDENCY OF BANKS OF PANAMA

COMMUNIQUÉ

Following up on the information in Circular SBP-DR-0152-2014, released on November 26, 2014 and sent to all regulators, the Superintendency started a special examinations program on all banks in the market, aimed at verifying compliance with the regime established to prevent their services from being misused for money laundering, the financing of terrorism and related crimes, or crimes of a similar nature or origin. This program is in addition to the examinations conducted by the Superintendency.

The special examinations program is currently being exercised in fifteen (15) banks of the System. To date, five (5) of these inspections have been concluded, five (5) are being finalized and five (5) will be started shortly.

The Superintendency has pressed charges for allegedly failing to comply with the provisions of the Banking Law, Law 42 of 2000 and Rule 12-2005 on two (2) of the five (5) banks whose inspections have been completed. The files on the other three (3) are under assessment to determine charges. At the same time, the rest of the examinations being conducted could also end in administrative processes against these banks.

It is worth emphasizing that the concluded and ongoing administrative processes, as well as those that will be conducted later on must comply with the due process and secrecy required by our country’s laws.

We reiterate that the Superintendency of Banks will apply the sanctions provided for in the Banking Law and Law 42 of 2000 in those cases where noncompliance with the legal and regulatory frameworks for the prevention of money laundering and the financing of terrorism and of the banking regime is proven. To illustrate, failure to comply with the provisions on the prevention of money laundering and the financing of terrorism can incur fines of up to B/.1 million and breaches of other Banking Law provisions can incur fines of up to B/.500,000, depending on the seriousness of the breach, recidivism, the extent of the damage and the harm caused. 

These penalties will be applied without prejudice to those established by other competent authorities.

It is also important to clarify that according to the provisions in the Banking Law, any information on individual clients of banks obtained by the Superintendency while discharging its duties must be maintained under strict confidentiality and would only be disclosed when required by competent authority in accordance with legal provisions during a criminal proceeding.

Alberto Diamond R.

Superintendent

January 28, 2015

http://www.superbancos.gob.pa/documentos_ing/laws_regulations/notice/2015/notice_3-2015.pdf

Panama banking center has 93 active banks

Panama has 93 licensed banks, of which 14 are representative offices not allowed to receive deposits.   This leaves 2 government-owned banks and 48 full-service general license banks open to the general public. An additional 29 banks have international license banks which can receive deposits only from non-Panamanians.

General License
1. ALLBANK CORP. *
2. BAC International Bank Inc
3. Balboa Bank & Trust Corp
4. Banco Aliado, S.A
5. Banco Azteca (Panamá), S.A
6. Banco Bilbao Vizcaya Argentaria (Panamá), S.A. (BBVA)
7. Banco Bolivariano (Panamá), S.A.
8. Banco Citibank (Panamá,) S.A
9. Banco Davivienda (Panamá), S.A
10. Banco Delta, S.A (BMF)
11. Banco de Bogotá (Panamá), S.A
12. BANISI, S.A.
13. Banco G & T Continental (Panamá), S.A. (B.M.F)
14. Banco General, S.A.
15. Banco Internacional de Costa Rica, S.A (BICSA)
16. Banco Lafise Panamá, S.A.
17. Banco Latinoamericano de Comercio Exterior, S.A. *
18. Banco La Hipotecaria, S.A
19. Bancolombia, S.A.
20. Banco Panamá, S.A
21. Banco Panameño de la Vivienda, S.A. (BANVIVIENDA)
22. Banco Pichincha Panamá, S.A.
23. Banco Prival, S. A. (en español) - Prival Bank (en inglés)
24. Banco Trasatlántico, S.A.
25. Banco Universal, S.A.
26. Banesco, S.A.
27. Bank Leumi Le-Israel, B.M.
28. Bank of China Limited
29. BCT Bank International, S.A.
30. Capital Bank, Inc
31. Citibank, N.A.
32. Credicorp Bank, S.A.
33. FPB Bank Inc.
34. Global Bank Corporation
35. HSBC Bank (Panamá), S.A. *
36. Korea Exchange Bank, Ltd.
37. Mega International Commercial Bank Co. Ltd.
38. Mercantil Bank (Panamá), S.A.
39. Metrobank, S.A.
40. MiBanco, S.A. B.M.F
41. MMG Bank Corporation
42. Multibank, Inc.
43. Produbank (Panamá), S.A
44. St. Georges Bank & Company, Inc.
45. The Bank of Nova Scotia (SCOTIABANK)
46. The Bank of Nova Scotia (Panamá), S.A.
47. Towerbank International, Inc.
48. Uni Bank & Trust, Inc

* Relevant Changes
** Awaiting notice of approval

(c) Mypanamalawyer.blogspot.com Reproduction prohibited

International License
1. Andbanc (Panamá), S.A.
2. Atlantic Security Bank
3. Austrobank Overseas (Panamá), S.A.
4. BAC Bank, Inc.
5. Banca Privada D'Andorra (Panamá), S.A.
6. Banco Credit Andorra (Panamá), S.A.
7. Banco Corficolombiana (Panamá), S.A.
8. Banco de Bogotá, S.A.
9. Banco de Crédito del Perú
10. Banco de la Nación Argentina
11. Banco de Occidente (Panamá), S.A.
12. Banco del Pacífico (Panamá), S.A.
13. Banco Ficohsa (Panamá), S.A.
14. Banco Internacional de Perú, S.A.A – Interbank
15. Banco Santander (Panamá), S.A.
16. Bancolombia (Panamá), S.A
17. BHD International Bank (Panamá), S.A.
18. Inteligo Bank, Ltd.
19.Banco Colpatria Multibanca Colpatria, S.A., Sucursal Panamá
20. ES Bank (Panamá), S.A.
21. First Central International Bank
22. GNB Sudameris Bank, S.A.
23. GTC Bank, Inc.
24. Helm Bank (Panamá), S.A.
25. International Union Bank
26. PKB Banca Privada (Panamá) S.A.
27. Popular Bank Ltd., Inc.
28. Scotiabank Perú, S.A.A. Sucursal Panamá
29. TAG Bank, S.A.

* Relevant Changes
** Awaiting notice of approval

Source: http://www.superbancos.gob.pa/es/igee-informacion-general

For procedures to open a bank account, see also

http://mypanamalawyer.blogspot.com/search/label/bank%20account 

Most important providers of financial secrecy are in world's biggest and wealthiest countries

Campaigners say OECD action against banking secrecy has failed

06 October 2011

The campaigning body Tax Justice Network has published a report claiming that the OECD nations have failed to make any practical difference to international banking secrecy.

In its report, The 2011 Financial Secrecy Index, TJN ranks 73 international financial centres according to its estimates of their secrecy and the quantity of money that flows through them. It claims to deliver a "politically neutral" result.

The index uses fifteen factors to calculate the secrecy index of each jurisdiction. They include knowledge of beneficial ownership, corporate transparency regulation, regulatory efficiency, and international standards and cooperation.

According to TJN, its ranking reveals that "the world's most important providers of financial secrecy are not small, palm-fringed islands as many suppose, but some of the world's biggest and wealthiest countries". Indeed it puts countries such as the USA high on the secrecy list - not a view much promoted by the OECD's Global Tax Forum, the body responsible for the official campaign for international exchange of tax collection information.

Each of the 73 jurisdictions examined has its own report on the TJN website. Switzerland and the Cayman Islands are at the top of the list. This is mainly because of the large cash volumes they handle, although TJN also dismissed both jurisdictions' information exchange agreements as "ineffective".

Other leaders in the field are Luxembourg, Hong Kong, Delaware in the USA, Jersey and Bahrain. The UK, Japan and Germany are not far behind.

Sources

http://www.stepjournal.org/news/news/main_story/campaigners_say_oecd_action_ag.aspx

Tax Justice Network Financial Secrecy Index http://www.financialsecrecyindex.com/

2011 Results

Telegraph

U.S.-Panama Business Group Gears Up For Washington FTA Lobbying Push

Inside U.S. Trade - 10/22/2010
Posted: October 21, 2010

U.S.-Panama Business Group Gears Up For Washington FTA Lobbying Push

A U.S.-Panama business group is planning a new push to lobby the Obama administration and Congress to secure the approval of the long-stalled U.S.-Panama free trade agreement, according to a Panamanian private-sector source.
The U.S.-Panama Business Council will hold meetings in Washington on Nov. 18-19 with U.S. lawmakers, State Department officials and members of the U.S. private sector, this source said. He did not provide further information on what the group planned to discuss during these meetings.
Panamanian sources said the primary obstacle to the passage of the U.S.-Panama FTA remains the demand by the U.S. that Panama sign a tax information exchange agreement (TIEA) with the U.S.
Panamanian Vice President Juan Carlos Varela and U.S. Trade Representative Ron Kirk discussed the tax transparency issue during a Sept. 30 meeting in Washington, according to USTR spokeswoman Nkenge Harmon.
The two officials also discussed U.S. concerns with "certain aspects of Panama's labor regime," Harmon said in an e-mailed statement.
One Panamanian source said during this meeting the U.S. sought to entice Panama into signing a TIEA by saying that in exchange it would allow a tax deduction for U.S. business travelers who visit Panama for conventions, seminars or other meetings.
Such a deduction is currently available for domestic travel, as well as travel to Canada, Mexico, Costa Rica, Guyana, Honduras and some Caribbean destinations, according to Rebecca Wilkins, senior counsel for federal tax policy at Citizens for Tax Justice. However, this deduction is not available if such meetings are held on cruise ships, Wilkins said.
Such an agreement would require the Panamanian government to hand over information on Panamanian bank accounts used by U.S. persons upon request by the U.S. government, which goes against current bank secrecy laws in Panama, they said.
Panama is currently listed on the Organization for Economic Co-operation and Development's "gray list" because of its status as a tax haven. In order to secure removal from the list, a country needs to implement 12 TIEAs or Double Taxation Treaties (DTTs) with full tax information exchange provisions (Inside U.S. Trade, June 11).
As of Oct. 20, Panama had signed nine such DTTs, according to a press release from the office of Panamanian President Ricardo Martinelli. Panamanian sources said three additional DTTs have already been negotiated and their signing is expected before the end of the year.
According to one Panamanian source who opposes the signing of a TIEA with the U.S., a recently passed U.S. law already would require some Panamanian banks to report information automatically on U.S. account holders.
The Hiring Incentives to Restore Employment (HIRE) Act, which President Obama signed on March 18 and is slated to go into effect on Jan. 1, 2013, includes provisions that will require foreign banks that do business with U.S. banks to report information on U.S. account holders in one of two ways, according to Wilkins.
The first option is for these banks to submit a Form 1099 to the Internal Revenue Service that would report the income earned on the U.S. account. The second option is for these banks to fulfill more stringent reporting requirements contained in the HIRE Act, under which the banks would not have to report the total income on the account but would have to provide information on the maximum amount in the account and the aggregate amount of transactions on the account.
In both cases, the banks would have to report the name, address and taxpayer identification number of the U.S. account holder.
Asked if these reporting requirements would make information exchange provisions in the TIEA redundant, Wilkins said this would not be the case. While the HIRE Act provisions would be helpful because they could aid the U.S. in identifying tax evaders by name, the TIEA provisions are also necessary because they allow U.S. authorities to request Panamanian authorities hand over any information about U.S. account holders upon request, Wilkins said.
One Panamanian source said the government had recently implemented a change to its law that would allow Panama's tax agency to gather information on account holders if such information is requested by a foreign government under the DTTs Panama is signing with other countries. He explained that this change was necessary in order to implement the tax information exchange provisions chapters of these DTTs.
TIEAs spell out in great detail the procedure for exchanging tax information between two governments. For example, the TIEA between the U.S. and the Cayman Islands consists of 13 detailed articles in information exchange.
By contrast, the OECD Model Tax Convention Article 26 Panama wants in a DTT with the U.S. is comprised only of five sections outlining basic commitments (Inside U.S. Trade, June 11).

See full text in
http://insidetrade.com/Inside-US-Trade/Inside-U.S.-Trade-10/22/2010/us-panama-business-group-gears-up-for-washington-fta-lobbying-push/menu-id-710.html

Read Also:
Un Acuerdo con Pocos Beneficios
http://competenciafiscal.blogspot.com/2010/06/un-acuerdo-con-pocos-beneficios.html

Why do I have to give Panama banks so much information?

Panama banks are required by law to apply "Know-Your-Customer" (KYC) policies in order to have information in their files which would allow Panama authorities to know who the ultimate beneficiary owner (UBO) is, in case of a criminal investigation for violation of Panama laws. If your bank is not asking for this information, it is because they have no intention of sticking around for long and your money may actually be at risk of vanishing.

Regulated banks are demanding the following:

1) Personal interview with the accountholders (and/or Copy with Apostille of the passport of the accountholders)
2) ORIGINAL letters of reference from TWO (2) banks of EACH of the foreign director/ Council members and the foreign client,
3) Last statement of account from the two banks.

Banks reserve themselves the right to request further documents and even to reject the bank account application.

In addition, so that all Panama transfers are not subject to unjustified scrutiny by US banks, Panama banks must comply with Qualified Intermediary provisions enacted by the IRS.

_____________________________________________________________________

http://www.superbancos.gob.pa/aspec_prevencion/index_eng.asp

AGREEMENT 8 (2006)

The Superintendency of Banks is responsible for looking after the maintenance of the soundness and efficiency of the banking system as well download pdf

AGREEMENT 12 (2005)

Of December 14, 2005 - Prevention of the misuse of Banking and Trust Services download pdf

SPECIAL AGREEMENT 12 E (2005)

Of December 14, 2005 - Guide with examples of Suspicious Operations download pdf

AGREEMENT 5 (2003)

Of June 12, 2003 - Basic guidelines relating to the exercise of electronic banking services. download pdf

AGREEMENT 4 (2001)

Of September 5 of 2001 - DEFINITION OF CORPORATE GOVERNANCE. For the effects of this Agreement, Corporate Governance will be understood as the group of rules that govern with transparency the relationship and behavior between the Senior Management of the Bank, its Board of Directors, its shareholders, its depositors and any other stakeholder, which produces the strategic objectives of the enterprise, the means, resources and procedures to attain these objectives, as well as the system for the verification of the monitoring of responsibilities and controls corresponding to each level of the Bank�s structure. download pdf
RESOLUTION JD No. 032-2005
Of December 21, 2005 - Whereby the scope is set for the concept of Due Diligence contained in Article 3 of Agreement 12-2005 download pdf

_____________________________________________________________________

List of Approved KYC Rules and Rules Awaiting Approval

Revenue Procedure 2000-12 states that the IRS will not enter into a qualified intermediary (QI) withholding agreement that provides for the use of documentary evidence obtained under a country's know-your-customer rules if it has not received the know-your-customer practices and procedures for opening accounts and responses to 18 specific questions listed in the revenue procedure.

This document lists those countries that have submitted know-your-customer rules. Two lists are provided -- a list of countries whose know-your-customer rules have been approved by the IRS and a list of countries whose know-your-customer rules have been submitted but not yet approved.

The qualified intermediary agreement contains an attachment that lists the specific types of know-your-customer documentary evidence for each country that is sufficient for purposes of the qualified intermediary agreement. The IRS is working together with the organizations that have submitted acceptable know-your-customer rules to develop standardized attachments. The attachments can be seen here as soon as they are available. For more information, see Rev. Proc. 2000-12 and Announcement 2000-48 .

If a country is on the approved list, entities and branches located in that country may submit their QI applications even if the IRS has not yet agreed to a specific attachment for that particular country. Once a specific attachment has been developed for a particular country, the IRS will associate the attachment with the qualified intermediary agreement it sends for signature. A qualified intermediary may suggest amendments to the attachment, but departures from the standardized attachment may delay processing of an application.

• Panama

ATTACHMENT FOR PANAMA
1. QI is subject to the following laws and regulations of Panama governing the requirements of QI to obtain documentation confirming the identity of QI�s account holders.
(i) Law No. 42 of October 2, 2000.
(ii) Decree Law No. 9 of 1998.
(iii) Agreement No. 9-2000 of October 23, 2000.
(iv) Decree Law No. 1 of July 8, 1999.
(v) Interbank Agreement No. 34 of the Panama Banking Association.
(vi) Panama Banking Association�s Guide for the Prevention of the Wrongful Use of Bank Services.

2. QI represents that the laws identified above are enforced by the following enforcement bodies and QI shall provide the IRS with an English translation of any reports or other documentation issued by these enforcement bodies that are relevant to QI�s functions as a qualified intermediary.
Item 1(i): Superintendency of Banks, National Securities Commission, and Financial Analysis Unit.
Item 1(ii), (iii): Superintendency of Banks.
Item 1(iv): National Securities Commission.
Item 1(v), (vi): Board of Directors, Panama Banking Association.
3. QI represents that the following penalties apply to failure to obtain, maintain, and evaluate documentation obtained under the laws and regulations identified in item 1 above.
Fines from US$5,000 to US$1,000,000, private admonition, public admonition, removal of officers, annulment of banking license, intervention in bank�s administration with compulsory reorganization or liquidation, expulsion from Panama Banking Association.
4. QI shall use the following specific documentary evidence (and also any specific documentation added by an amendment to this item 4 as agreed to by the IRS) to comply with section 5 of this Agreement, provided that the following specific documentary evidence satisfies the requirements of the laws and regulations identified in item 1 above. In the case of a foreign person, QI may, instead, use a Form W-8 in accordance with section 5 of this Agreement. Either QI, or a banking or securities association in Panama, may request an amendment of this item 4.
(i) For natural persons:
(a) Passport,
(b) National identity card,
(c) Driving license that bears a photograph.
(ii) For legal persons:
Copy of certificate of incorporation, memorandum of association and by laws, trust deed or certified copy of extracts from the trust deed.
5. QI shall follow the procedures set forth below (and also any procedures added by an amendment to this item 5 as agreed to by the IRS) to confirm the identity of account holders that do not open accounts in person or who provide new documentation for existing accounts other than in person. In the case of a foreign person, QI may, instead, use a Form W-8 in accordance with section 5 of this Agreement. Either QI, or a banking or securities association in Panama, may request an amendment to this item
(i) QI shall not open an account by any means other than by establishing in person the identity of a customer through the account holder�s own identity documents, except as permitted in (ii), (iii) and (iv) below.
(ii) QI may obtain by mail or otherwise a copy that is an exact reproduction of the specific documentary evidence listed in item 4 above from another person that is subject to know-your-customer rules that have been approved by the IRS for purposes of qualified intermediary agreements, provided that the laws and regulations listed in item 1 permit QI to rely on the other person to identify the account holder.
(iii) QI may obtain a photocopy of the specific documentary evidence listed in item 4 by mail or otherwise remotely from the account holder or a person acting on behalf of the account holder, provided that the photocopy has been certified as a true and correct copy by a person whose authority to make such certification appears on the photocopy, and provided that the laws and regulations listed in item 1 permit QI to rely on the certified photocopy to identify the account holder.
(iv) (iv) (a) QI may obtain by mail or otherwise a copy that is an exact reproduction of the specific documentary evidence listed in Item 4 from an affiliate of QI or a correspondent bank of QI, provided that the affiliate or correspondent bank has established in person the identity of the account holder and the laws and regulations listed in Item 1 permit QI to rely on documentation provided by that affiliate or correspondent bank to identify the account holder.
(b) For accounts opened prior to January 1, 2001, if QI was not required under its know-your-customer rules to maintain originals or copies of documentation, QI may rely on its account information if it has complied with all other aspects of its know-your-customer rules regarding establishment of an account holder�s identity, it has a record that the documentation required under the know-your-customer rules was actually examined by an employee of QI, or an employee of an affiliate of QI or a correspondent bank of QI, in accordance with the know-your-customer rules, and it has no information in its possession that would require QI to treat the documentation as invalid under the rules of section 5.10(B) of this Agreement.

When in doubt, get an Apostille

Panama Immigration clearly says it:
A) All documents issued abroad, should be submitted duly apostilled or authenticated by the Embassy or Consulate of Panama in the country that issued it and by the Ministry of Foreign Relations of Panama. B) All documents issued abroad in language besides Spanish, must be translated by a certified interpreter recognized by the Minister of Justice.

The Apostille is demanded in Panama for foreign Police Records (even if you are an angel and have never been convicted), Birth certificates, Marriage certificates, Social Security letters, and lately even letters of reference from banks.

U.S. State Department explains:
Documents issued in one country which need to be used in another country must be "authenticated" or "legalized" before they can be recognized as valid in the foreign country. This is a process in which various seals are placed on the document. Such documents range from powers of attorney, affidavits, birth, death and marriages records, incorporation papers, deeds, patent applications, home studies and other legal papers. The number and type of authentication certificates you will need to obtain depend on the nature of the document and whether or not the foreign country is a party to the multilateral treaty on "legalization" of documents. (A) If your document is intended for use in a country which is a party to a treaty called the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents ("Hague Legalization Convention") (countries listed below), obtaining a special "apostille" certificate is generally all that is required.

US federal documents (such as a Social Security letter) may be authenticated only by the US State Department. However, other documents which a have a notary signature are authenticated by the Department of State of each individual state. The same may apply in federal nations like Canada, Australia and Germany.*

You can get the Apostille by yourself using a self-addressed stamped envelope and paying by check, or a privately-owned notary service.

Once you are in Panama, the Embassy of your country cannot issue an Apostille for your document. This has to be done BEFORE you arrive to Panama.

For more information, see:
US State Department Authentication of Federal documents
US State Department List of State Authentication Authorities*
Wikipedia Guide to Apostille

If you want to just forget about the whole Apostille thing, you can take your chances with the list of Panama consuls in Panamatramita.gob.pa. Call them up first to figure out if it is better to deliver the document yourself in person, or if they can handle return postage. If they lose your document, there is no authority you can complain to!

*If there is a country you would like us to cover, email us and we will post the link to its Apostille instructions.

Opening your bank account in Panama

BANK ACCOUNT REQUIREMENTS IN PANAMA

Foreigners are subject to "Know-Your-Customer" (KYC) requirements when opening an account with a bank in Panama. Subject to changes according to internal procedures of each bank, applicants must appear in the person at the bank for a personal interview and provide :

1) 2 Letters of Reference from 2 other banking institutions, authenticated with Apostille or by Panama Consul, addressed to the bank in Panama,

2) Copy of the passport and another picture identification (providing the original documents for verification)

3) Tax return or other document which will help the bank identify the income range of the applicant and compare it with the movement of account.

The Panama Superintendent of Banks has a website

http://www.superbancos.gob.pa/ where all institutions licensed to provide banking services are listed. Institutions which do not appear in this listing act in violation of local laws and depositors risk losing their deposits.

In addition, Panama banks owned by investors holding publicly-traded shares, disclose their financial statements and relevant events to the Panama Stock Exchange http://www.panabolsa.com/

, which helps to gauge their financial solvency.