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.

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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

Lombardi Aguilar Attorney Discusses Restrictions on Bearer Shares

Business Law Attorney Alvaro Aguilar’s Radio Interview Addresses Concerns and Impact of Impending Legal Action on the Financial Center

FOR IMMEDIATE RELEASE

Panama City

PRLog (Press Release) - Nov. 15, 2012 - Attorney Alvaro Aguilar, partner at Lombardi Aguilar Group, said that Panama incorporators have in place know-your-customer laws which do not exist in the U.S. and European countries which deem the Isthmus as an “uncooperative” jurisdiction. Aguilar was recently interviewed on Omega Stereo www.omegastereo.com about a recent study by Australian university professor Jason Sharman comparing Panama's due diligence system for incorporations with those of Organization of Economic Cooperation and Development (OECD) member states.

“Since the 1930s Panama has stood out as an international financial and logistical center, in the face of larger centers such as London and New York”, said Aguilar, who specializes in formation of corporations, trusts and foundations for business purposes. “The contradiction that more than half of the OECD members are allowed to have bearer shares, some with immobilization, has no other motive than to slowly erode the competitiveness of a financial center which has always been independent.”

Aguilar reminded listeners the circumstances under which the Panama corporate system originated in the 1930s. When totalitarian countries threatened Europe, Ships owned by Panama companies were leased by the then neutral US to assist the United Kingdom in its war effort. Other companies owned Panama-flag ships used to take Jewish refugees to the territory of Palestine. "Bearer shares of said companies were an element in choosing Panama for said operations" said Aguilar.  He mentioned several cases in Eastern Europe and Latin America of businessmen in currently using Panama companies with bearer shares to shelter from authoritarian regimes the personal assets they have earned.

According to the Sharman study, "available evidence strongly suggests that Panama is significantly more compliant with international beneficial ownership standards than many OECD countries, especially the United States". 20 out of 34 OECD countries allow bearer shares, and have not immobilised them, including important financial centers like the UK.   Panama is not a member of the OECD.  Aguilar also pointed out that the England and the U.S. state of Wyoming have business entities authorized by law to issue bearer scrip and bearer share warrants without being surrendered for immobilization.

A plan for immobilization of bearer shares of Panama companies has been opposed by the University of Panama School of Law and several local practitioners.

Mr. Aguilar is a graduate of Universidad Santa Maria la Antigua (LLB) and Washington College of Law at The American University (LLM) International Trade & Banking program. Previously he has been selected by the Central American business weekly CAPITAL FINANCIERO as one of the "40 under 40" acknowledging to his achievements as a young legal professional. He specializes in corporation law and trust & estates matters.

About Lombardi Aguilar Group

Lombardi Aguilar Group is a partnership of consultants created as an alternative for clients worldwide who seek fast, innovative and effective solutions to their legal problems. The firm currently provides services to individual and corporate clients in Panama as well in the Americas, Europe and Asia. Its partners maintain a commitment with professional ethics and social responsibility by participating in the board of directors of groups such as the Panama Bar Association, the Alliance Francaise, the German and the American Chambers of Commerce (AMCHAM) of Panama, and the Association of Chinese-Panamanian Professionals (APROCHIPA).

The firm centers its law practice in private client services and asset protection (Private Interest Foundations, Trusts), business structures (Offshore Corporations), tax planning, real estate and e-commerce. It also advices in areas of Law such as Corporate, Commercial, Intellectual Property, Maritime, Tax, Environmental and Immigration Law as well as related litigation.

For more information, contact +507 6638-8707   +507 396-5080 , e-mail info (at) laglex.com, or see: Lombardi Aguilar Group http://www.laglawyers.com/

Photo:
http://www.prlog.org/12024151/1

http://www.prlog.org/12024151-lombardi-aguilar-attorney-discusses-restrictions-on-bearer-shares.html

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Compliance costs serve as barrier to the poor

A report by the World Bank explains how compliance and KYC costs at banks are passed on to consumers, thereby excluding many of the poor from access to banking services.

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Measuring Financial Inclusion: The Global Findex Database

Asli Demirgüç-Kunt

World Bank - Development Research Group (DECRG)

Leora F. Klapper

World Bank

April 2012

World Bank Policy Research Working Paper No. 6025

Abstract:

This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics.

 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2042142&download=yes

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.