Both laws are part of the package of reforms that Panama needs in order to comply with some of the recommendations established by the Financial Action Task Force (FATF) so that it can be removed from the gray list.
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 Panamanian banking sector has suggested that the government create a new entity focused on formal promotion of the international services offered by the country.
Industry representatives are hoping that the National Assembly and the new Minister of Economy and Finance, will take actions against the entry into force of Law 47 which establishes a regime of custody for bearer shares. In addition, there will shortly be a meeting in New York with eight international banks to present the current scenario, the actual risk and counter negative perceptions that have damaged the international image of the country in recent months.
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.
The Minister of Finance announced that the country did not pass the first stage of the review by the OECD because it has not implemented a law immobilizing bearer shares.
An assessment of tax transparency and exchange of information that would have been made by the Global Forum Organization for the OECD will prevent the country from being removed from the list of tax havens.
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.
With a unit value of close to $41, the company has launched on the stock market 240,000 Non-Cumulative Preferred shares.
The structurer of the issuance is Invercasa, whose representatives described the event as "the first issuance of preferred shares in Nicaragua". The novelty of this story is that in practice, those buying shares will almost become owners (with limited rights) of a small part of the company.
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.
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