Panama adopts private and single system of register of final beneficiaries
Recently, through Law No. 129 of March 17, 2020, enacted on March 20, 2020, (the “Law”) the private and single system of register of Final Beneficiaries of legal entities constituted or registered under the laws of the Republic of Panama (the “Single System“) is created, which will be safeguarded and administered by the Superintendence of Non-Financial Subjects (the “Superintendence“) to guarantee the confidentiality of the information on the identity of the Final Beneficiaries of existing legal entities in the Republic of Panama.
Before the entry into force of the Law, there was already an obligation on the part of the Resident Agents to identify the Final Beneficiaries of all the legal entities for which they provided their services. Now, the Superintendence will guard the information that the Resident Agents enter into the Single System of restricted access, with the due security controls and technological protection under the highest international controls of treatment and protection of personal data.
The data provided to the Single System must be kept strictly confidential reserve and can only be provided by the Superintendence to the competent authorities, within a maximum period of seven (7) business days following the date of the request, in strict compliance with the procedures, requirements and formalities established for this purpose.
Only Panamanian public investigation entities expressly authorized by the Law, namely, the Financial Analysis Unit, the Public Ministry, the Ministry of Economy and Finance, and any other institution or dependency of the National Government to which subject matter is attributed for the prevention of money laundering, terrorist financing and financing for the proliferation of weapons of mass destruction, may request the Superintendence the information about the Final Beneficiaries through the submission of a formal request related to specific cases within investigative processes related to money laundering, financing of terrorism and proliferation of weapons of mass destruction and their previous crimes, as well as to comply with international cooperation obligations established in the international treaties or conventions ratified by the Republic of Panama, prior verification of compliance of the requirements established in these laws and treaties.
The Superintendence will only exercise the custody, conservation and restricted access function of the information it receives from the Resident Agents, and it is not allowed to carry out investigative functions, nor will it allow third parties to have access to said information.
In addition, the Law that any person who has access to the information of the Single System will be obliged to maintain the confidentiality of the information contained in it, even when he/she/it ceases his/her/its duties. Failure to comply with this obligation will be sanctioned with a fine of two hundred thousand balboas (B / .200,000.00), without prejudice to the other sanctions established by law and the civil or criminal liability that may arise.
Without prejudice to the other sanctions established by law and the civil or criminal liability that may arise, any person who for his/her/its own benefit or that of a third party, accesses, directly or indirectly, by any means the Single System or the information contained therein, without the due authorization of the person who must issue it, will be sanctioned with a fine of five hundred thousand balboas (B / .500,000.00).
Obligation of the Resident Agent
The Resident Agents are obliged to file directly to the Single System of the Superintendence, the following minimum information on the Final Beneficiaries of the legal persons for whom they provides their services, which the Resident Agents must have collected during their due diligence process and which they must keep in their files, as well as keeping said information updated: (i) full name; (ii) ID number, passport or personal identification document; (iii) date of birth; (iv) address; (v) nationality; (vi) date as of having the condition of Final Beneficiary of the entity; (vii) main activity of the legal entity.
Reduced information requirements shall apply in those cases where the final beneficiary of the legal person subject to registration is an entity with common shares listed on a local or international stock exchange or owned by a Stateowned entity or by a multilateral entity or a State.
Said information must be filed with the Single System within a maximum period of thirty (30) business days following the constitution of the legal entity or the appointment of a new resident agent. The legal representative of any legal entity is obliged to provide its resident agent with the information required by it to identify the final beneficiary, as well as to notify its resident agent of any variation in the information of its final beneficiary within a maximum period of thirty (30) business days following the date of the variation, in order for the resident agent to carry out the corresponding update of the information within a maximum period of thirty (30) business days following the date on which such information was received by the Resident Agent. The Resident Agent will be obliged to resign if the client does not provide the information that is required to complete their due diligence within the aforementioned period.
The Law defines as Final Beneficiary of a legal person, the natural person(s) who, directly or indirectly, possess or control and / or exercise significant influence on the account relationship, contractual and / or business relationship, or the natural person in whose name or benefit a transaction is carried out, which also includes natural persons who exercise final control over a legal entity.
The criteria for determining possession, control or influence in general terms are: a) By shareholding: the natural person who ultimately owns or controls, directly or indirectly, 25% or more of the shares or voting rights in the legal person, or whoever owns, controls and / or exercises significant influence; b) By control: Special provisions apply depending on whether the Final Beneficiary is a civil partnership, a trust, a legal person in liquidation, insolvency or bankruptcy, or a deceased shareholder; and c) In any other unforeseen case, the natural person who otherwise exercises effective and definitive control over the management of the legal entity, that is, who has the capacity to make relevant decisions about the legal entity and impose such resolutions.
As of the enactment of the Law, Resident Agents shall have a period of six (6) months from the date on which the Superintendence communicates that the Single System is enabled for their access, to comply with the obligation to file the information on the Final Beneficiaries of the legal entities.
With the adoption of this Law, Panama implements a private technological platform with limited access, in compliance with the standards accepted by the international community, to safeguard the information on the Final Beneficiaries of the legal entities. This new platform will have high standards of security and confidentiality, which will allow clients to continue using Panama’s legal entities for legitimate purposes, and avoid abuse of the Panamanian corporate system.
At SUCRE | ARIAS | REYES we are at your service to answer your queries regarding this Law. Should you need additional information on this new Law, please do not hesitate to contact us.
Edificio Sucre, Arias & Reyes
Avenida Ricardo Arango y Calle 61, Obarrio
P.O. Box 0816 01832, Panamá, República de Panamá
www.sucre.net | firstname.lastname@example.org | Tel +507 204-7900