RealEstate-Panama.com - Law 42 of 2000 Money Laundering

Republic of Panama – Law 42 of October 2, 2000
Establishes the measures for the prevention of the Felony of Money Laundering

Article 1

As it relates to:

Banks
Financial Firms
Exchange Houses
Natural Persons and Legal Entities

Which engage in the activities of:

Change of currency
Financial Strategies
Cooperatives of Saving and Loan
Stock Exchange
Centers of Values
House of Values
Corredores
Administrators of Investments

Are obligated to maintain in their daily operations, the Due Dilligence and the caution to make sure that such operations are not conducted with funds or over funds from activities related to the Felony of Money Laundering, and to avoid the resulting monetary compensations as they take the form of commissions.

Natural Persons or Legal Entities aforementioned are bound to the following obligations:

Adequetely Identify Their Clients – They are to require and acquire from their clients the necessary references or recommendations, like the corresponding certificates which provide evidence of the incorporation and validity of the Corporation (Sociedad Anonima), the same which identify the dignitaries, the directors, the "'empowered" and legal representatives of the Corporation, in a manner which can be documented, in order to estasblished adequetly the real owner or beneficiary whether directly or indirectly.
Remit Declarations – to the Official Analysis of Finances (Unidad de Analysis Financiero) the declarations which are necessary to remain in compliance of this Law, and its application in cases of:
- Deposits or withdrawls of more than $10,000 or successive tranactions in close ranges, which even though inferior to $10,000 individually, collectively amount to $10,000 or more.
- Exchanging of currency, lottery tickets, checks, bank manager checks, travelers checks, orders of payment, or trannsfers in denominations of $10,000.
- Exchange of checks and orders of payment, written to the possesor, with a blank endorsement on a certain day or days in close ranges, and or written to one or more check cashers in amounts of more than $10,000.

The executive organ can vary the sums of money, over which they establish the obligation to declare the following:

Examine with special attention – whichever operation, which is particularly sucseptable to money laundering from illegal activites.
Request the declarations – relative to the transactions aforementioned, in addition to any additional information related to the transactions for their adecuate analysis.
Communicate directly – through voluntary process, to the Official Analysis of Finances, whichever act, transaction or operation, in which there is some suspicion that the transaction could involve the felony of money laundering.
Abstain from revealing – to the client and third parties, that information has been communicated to the Official Analysis of Finances.
Establish Mechanisms of proceedure and internal control – to prevent the realization of a money laundering transaction.
Adopt education for employees – so they can be informed of their legal obligations, and internal proceedures in dealing with the felony of money laundering.
Preserve documents – for 5 years, which acredit the realization of the operations, and the identity of those subjects (the Executive Organism can vary the amount of time related to the conservation of these documents)

Article 2:

This law authorizes the Superindendency of Banks to supervise and control every activity, and it obligates every person to colaborate with the Official Analysis of Finances, and to provide whatever information that prevents the realization of the felony.

Article 3:

No information communicated to the Official Analysis of Finances or other authorities, will constitute a violation of professional secrets, nor the restrictions governing the revealment of this information.

Article 4:

Every public servant which receives or has information, must maintain them in strict reversal, and must only present the information to competent authorities. The public servant who violates this official charge will be subject to the sanctions explained in Article 8, for the felony of violating professional secrets.

Article 5:

The organisms of control and supervision are granted the faciities to inspect the procedures and mechanisms of internal control of every person subject to supervision.

Article 6:

The activities of persons obligated to the conformity of this law, will be supervised and controled by the respective public entities of supervision and control.

Article 7:

Obligation to submit, to the Official Analysis of Finances, declarations about the transactions made in cash and semi-cash, in the amount of $10,000 to the following entities:

Companies established in Zona Libre of Colon
The National Lottery
Casinos and others dedicated to games of luck and chance
Promotion Companies and Corredores of Real Estate
Insurance Companies, Re-Insureres, and Corredores of Re-Insurers

It is understood that these entities should maintain in their registry the name(s) of the client, their addresses, and copies of their personal identification. The Executive Organism can vary the amount of monies in cash or semi-cash over which they establish the obligation to declare.

Article 8

Not including the methods established in the Penal Code, the person who does not comply with this law, may be sanctioned with fines in the amount of $5,000 to $1,000,000, depending on the lack of compliance and the degree of re-incidence. The amount of the fine will be paid to a special account established to maintain the operations of the Official Analysis of Finances, with the only purpose of training and equiping of personnel or the adquisition of equipment and other resources. For the exclusive effects of this article and this law, the actions of personal directors, dignataries, executives, administration, or operations on behalf of a Legal entity, are credited to the Legal entity on whos behalf they act. Natural persons who are part of these acts will be subject to the civil and penal responsibilites established by the law.

Article 9

We add the following modification to Article 153-A of Law 1 of July 8, 1999:

Article 153-A – It will be a requirement for the offer, sale or purchase of stocks by any public market, the previous deposit of the titles, authorized, to be registered in the National Commission of Values – similar to the SEC of the US (Comision Nacional de Valores).This comission will be authorized to establish the requirements for the registry of the deposit. The deposit can be given durring the immobilization of the physical titles, the global titles or macro titles representative of the values, or durring the dematerialization of the values by way of annotations in an account.

Article 10 (transitory)

The validity of the following laws will be recognized: