Please note that Law N° 129 of March 17, 2020 (hereinafter “the Law”) approved the transfer of the custody of the information concerning the identity of the Final Beneficiaries of existing legal entities under the laws of the Republic of Panama to the Superintendence of Non-Financial Subjects (hereinafter “the Superintendence”). The obligation on the part of the Resident Agents to identify the Final Beneficiaries of all the entities for which they provided their services was already in place before the Law was adopted.
With the enactment of this legislation, Panama implements a modern technological platform already used and tested by other countries and is now at the forefront of new trends in corporate transparency providing an adequate balance between the duty to know the clients while avoiding abuses of the corporate system and maintaining a high degree of confidentiality for those who use legal entities for commercial, inheritance or estate planning purposes that are not contrary to the law.
The Superintendence will keep the information in a secure and protected database with restricted access. The access is restricted to Panamanian public investigation entities, expressly authorized by Law, namely, the Financial Analysis Unit, the Public Ministry, the Ministry of Economy and Finance, the Superintendence of Banks and the Superintendence of the Securities Market, may request the Superintendence information about the Final Beneficiaries, through the submission of a formal request relating to specific cases within investigative processes concerning money laundering, terrorism financing and weapons of mass destruction, or assistance under treaties or international agreements signed by Panama.
The information shall only be provided to Panamanian public investigation entities expressly authorized by the Law, by two Superintendence officials who must go through a rigorous investigation process before their appointment in order to ensure certainty to the reserved and confidential handling of the information.
The Superintendence shall only exercise custody, conservation and access functions 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.
The Law defines as the Final Beneficiary of an entity, in general terms, the natural person or persons who, directly or indirectly, own or control 25% or more of the shares or voting rights in the legal person, or whoever owns, controls and/or exercises significant influence over the account relationship, contractual and/or business relationship or the natural person in whose name or benefit a transaction is made, which also includes natural persons who exercise final control over a legal person.
The system is designed so that the Resident Agents are the ones obliged to directly enter the information they must have collected during the due diligence process to the Superintendence’s database and thus they are responsible for updating the information under penalty of sanction.
The minimum information on the Final Beneficiaries that must be included in the database is: (i) Full name; (ii) Personal identification document number; (iii) Date of birth; (iv) Address; (v) Date as of having the condition of Final Beneficiary of the entity; vi) Main activity.
This information must be entered into the system within a period of 30 business days following the constitution of the entity, its establishment in Panama or since the change in the previously registered information occurred. The Resident Agent is obliged to resign if the client does not provide the information required to complete its due diligence process within the mentioned period.
Once the Superintendence enables the access to the database, the Resident Agents will have a period of 6 months to enter the information of all their clients.
Juan Pablo Fábrega Polleri
Gretel Ciniglio de Pérez