In Panama a deadline has been bourght forward to December 31, 2015 for companies with bearer shares to turn them into registered shares or hand them in to custody.
Along with the change in the transition period is a new date for the entry into force of Act 47 of 2013, which was originally scheduled for two years after its enactment, but will now take effect ten days after it has been published. The government made these changes so that the law can come into effect at the next inspection of the Financial Action Task Force (FATF).
The International Organization of Securities Commissions is demanding regulatory approval so that the country will not be excluded from the international money market.
The stock market has a need for exchange of information in order to comply with the International Organization of Securities Commissions (IOSCO), which requires its members to have a mechanism to determine who is the beneficiary of a transaction.
A correction to the Act 47 of 2013 enables corporations to continue to issue bearer shares.
By Alvaro Aguilar, partner at Lombardi Aguilar Group
The Government of Panama has issued a correction of Act 47 of 2013 so that corporations can continue to issue bearer shares. The law adopts a correction to the custody arrangement of bearer shares and the Government has enacted a law that seeks to preserve the image of Panama as a collaborating country in the fight against the abuse of its financial services, and which brings the nation up to date with trends in international law.
After serious threats to its existence, bearer shares will survive thanks to a special regime created by Law 47 of August 6, 2013.
In an analysis piece by Osvaldo Lau C. in Prensa.com regarding the implications of the recently passed Law 47, he writes that "After a long run, bearer shares are to survive thanks to a special regime created by Law 47 of August 6, 2013, which also creates the custodians of certificates issued to bearers, so as to not remove them completely from our legislation. "
Congress discussed today in the first debate the bill adopting a custody regime applicable to shares issued to bearers.
From a press release issued by the National Assembly of Panama:
The Commission of Economy and Finance of the National Assembly will discuss in a first debate on Tuesday from 2:00 pm Bill 568 "to adopt a custody regime applicable to shares issued to bearers," which was presented by Minister of Economy and Finance, Frank De Lima.
Panama's government is to reactivate the discussion on a bill to immobilize bearer shares, with extensive consultation with the sectors involved.
The bill has the support of most international bankers and lawyers. However in the view of attorney Adolfo Linares, the law assumes submitting to the demands of the Organization for Economic Cooperation and Development (OECD), an organization which is trying to limit the jurisdiction of Panama's financial center in order to promote the interests of its member countries.
Panamanian Congress will resume discussion of the bill that immobilizes bearer shares.
Frank De Lima, Minister of Economy and Finance, has sent a report to the Organization for Cooperation and Development (OECD) to report on the postponement of the project in response to a letter from the Organization requesting a report on Panama's efforts in this area.
Commercial companies in Guatemala have until June 28 to make the conversion.
According to the explanation give by Oscar Chile Monroy in an article in Prensalibre.com, the Forfeiture Act (LED by its initials in Spanish), does not specifically establish a financial penalty to those who do not perform this procedure in time, however, it should be noted that the omission can bring serious tax consequences and commercial risks.
Panamanian Bankers believe that the sector will not be affected by the new provision, and are asking for it to take effect quickly.
The Panama Banking Association has spoken in favor of the approval of the project that adopts a scheme applicable to shares issued to the bearer, and believes that once the law is passed, it should enter into force in the next three months, not in two years as the law had contemplated.
The Cabinet Council of Panama has approved a draft law on adopting a regime for custody certificates issued as bearer shares.
From the press release issued by the Presidency of Panama:
The Cabinet Council approved a draft law on adopting a regime of custody certificates for bearer shares issued as part of the actions implemented by this administration designed to get in line with international standards and to position the country as a cooperate in the fight against the misuse of financial services.
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