PANAMA: Progressing with Beneficial Owner Register.

As published on internationalinvestment.net, Friday January 10, 2020.


Panama's National Assembly of Panama has approved a Bill that will create a register of beneficial owners of legal entities in the country at the centre of the biggest offshore scandal in history.

Under the Bill, resident agents will be required to file relevant information on all Panama-incorporated legal entities for which they are acting. All legal entities incorporated in Panama must appoint a Panamanian lawyer or law firm as their resident agent.

The jurisdiction's current beneficial ownership regime only requires resident agents to perform due-diligence on their client entities' ultimate beneficial owners. This information will now be collected on the register, under the control of the Superintendence of Non-Financial Institutions.

The Panama Papers investigation, led by the International Consortium of Investigative Journalists, provoked a global scandal in 2016 by revealing how certain rich and powerful figures use anonymous, offshore corporations to hide their money and evade tax.

In response, nations around the world pledged to shine a light on individuals who secretly control such corporations.

In June 2019, the global Financial Action Task Force (FATF) placed Panama back on its grey list of monitored countries, citing strategic anti-money laundering deficiencies, resulting in the Panamanian authorities agreeing to step up efforts to combat money laundering.

The new Bill requires resident agents to register with the Superintendence and submit the required information within 30 business days of the company being incorporated or of being appointed as its agent. A grandfathering clause grants resident agents of existing companies six months to register and obtain the required information. An agent that fails to do this will be required to re-sign as the entity's resident agent.

A legal entity whose resident agent has not registered with the Superintendence will be suspended from the Panamanian Public Registry, and will be removed after failing to file for two years.

The bill would sanction resident agents with fines from US$1,000 to US$5,000 for each legal entity whose information is not registered or updated in the beneficial owner register. For each day, the registration or update is not completed, the bill would impose progressive fines on 10% of the fine previously imposed, up to a maximum of six months. If false information is provided or filed in the beneficial owner register, the bill would impose additional sanctions, according to a report by EY.

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