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Who are the non-financial obligated entities (SONF in Spanish) in Panama?

Aiming to keep a healthy and crystal clear business scenario, Panama put in force a law that sets regulations to prevent money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction.

Law 23 (in force since April 27, 2015) creates a Financial Analysis Unit (UAF in Spanish) for companies in the real estate and construction sector, free zones and foreign trade, casinos and gambling, professional activities and others, such as pawnshops, and securities transports to report to.

 

Main obligations

These companies and professionals, defined by the Law as “Non-Financial obligated entities”, must fulfill a series of obligations, such as:

  • Properly identify their clients through recommendations and certifications proving the incorporation and validity of the companies and the identification of dignitaries, directors, attorneys and legal representatives of these companies in order to record and properly establish the true owner or -direct or indirect- beneficiary.
  • To make statements before the Financial Analysis Unit and/or to request from its clients, attorneys or representatives, the declarations necessary for the purposes of the Law and the regulations set forth for its application:
    • Cash deposits or withdrawals for an amount exceeding ten thousand balboas (B /. 10,000.00) or successive transactions that, although they’re less than ten thousand balboas (B /. 10,000.00) each, its total sums up more than ten thousand balboas (B /. 10,000.00).
    • Change of tickets, lottery tickets, checks, management checks, traveler’s checks or payment orders or transfers of low denominations by others with high denominations, or vice versa, for an amount exceeding ten thousand balboas (B /. 10,000.00).
    • Change of checks (cashier’s check, travelers check or others) and payment orders, issued to the bearer, with a blank endorsement and issued on the same date or close dates and/or by the same drawer or drawees of the same place for an amount higher than ten thousand balboas (B /. 10,000.00).

 

Examine with special attention, any operation, regardless of its amount, which may be particularly linked to laundering money from illicit activities described in the law.

Provide to their respective supervision bodies the statements regarding the transactions made, as well as any additional information related to such transactions in order to carry out a proper analysis.

Notify directly, and on own initiative about any event, transaction or operation suspected to be related with money laundering.

Establish procedures and mechanisms for internal control and communication aimed to prevent money laundering operations.

Take appropriate measures to ensure the employees of the entity are aware of the requirements set forth in the Law. The measures will include training plans and courses for employees, so they’re able to watch for money laundering operations and know how to proceed in such cases.

Keep for five years the documents that properly certify the transactions and the identity of individuals who made them or have established business relationships in case such identification is mandatory.

 

Confidential

The Law declares, as an obligation, that the obligated parties must act under strict confidentiality terms, so that they do not interfere in the investigation that originates in a complaint, without feeling committed to their clients. In that sense, it specifies that it must:

“Refrain from disclosing to the client and third parties that the information has been transmitted to the Financial Analysis Unit, in accordance with the provisions of this Act, or that any transaction or operation is being examined, on suspicion that it may be linked to money laundering “.

In this sense, the Law also privileges authorized public accountants and lawyers, for the sake of professional secrecy. It says, specifically, that:

“Lawyers and authorized public accountants who, in the exercise of their professional activity, are classified as activities performed by professionals subjected to supervision do not have to report suspicious transactions if the pertinent information was obtained in circumstances in which they are subject to professional secrecy or special professional privilege in the defense of his client or the confession that his client makes for his due defense “.

Who are obliged?

In accordance with Law 23 and the regulations, the non-financial obligated entities supervised by the Intendancy of Supervision and Regulation of Non-Financial entities of the Ministry of Economy and Finance are:

  • The companies of the Colon Free Zone and the companies incorporated in the Agencia-Panama Pacifico, Zona Franca de Barú, the Diamond Exchange of Panama and Free Trade Zones.
  • Casinos, gambling and organization of betting systems, and other physical or telematic establishments who carry out these businesses through the Internet.
  • The promoter companies, real estate agents and real estate brokers when involved in transactions for their clients concerning the purchase and sale of real estate.
  • The companies dedicated to the field of construction: contractor companies in general and specialized contractors.
  • Companies committed to the transportation of securities.
  • Pawnshops.
  • Companies committed to the commercialization of precious metals and/or gems in any of its forms, either through physical delivery or purchase of future contracts.
  • The National Charity Lottery.
  • National Post and Telegraph of Panama.
  • Companies committed to the purchase and sale of new and used cars.
  • Those activities carried out by professionals as described in article 24 of Law 23 of April 27, 2015.

The Law envisages the inclusion of other entities and activities that, because of their nature, carry out operations that can be used to carry out money laundering operations, financing of terrorism or financing the proliferation of weapons of mass destruction.

It also envisages the incorporation of entities and activities generated by the national risk assessment plan for the prevention of crimes of money laundering, financing of terrorism and the financing of the Proliferation of Weapons of Mass Destruction.