Panama

Last updated: 06/09/2014


CENTRAL AUTHORITY FOR REPORTING

Financial Analysis Unit of the Treasury Ministry (Unidad de Análisis Financiero).


OTHER ANTI-MONEY LAUNDERING REGULATOR(S)


ARE LAWYERS COVERED BY MONEY LAUNDERING LEGISLATION?

Lawyers are not expressly covered by most of the anti-money laundering obligations that are imposed on financial institutions and other designated non-financial businesses and professions. However, they must adhere to the KYC provisions established in Law no. 42 of February 2011.

Furthermore, all individuals are covered by the anti-money laundering legislation in Panama where the activity undertaken by them is related to the anti-money laundering laws of Panama.


LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.


ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

All individuals are covered by the anti-money laundering legislation in Panama.


LIST ANY MONEY-LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

There are currently no guidance notes in place.


IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

According the September 2006 CFATF Mutual Evaluation Report, lawyers do not need to belong to a professional association in order to practice and the Bar Association is not involved in supervising and enforcing any compliance.  In addition, any codes of ethics of any association are not legally enforceable. There are rules established by law that lawyers need to follow.


DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Client due diligence involves ‘Know your customer’, which means obtaining and verifying identification of the client and the beneficial owner during the due diligence process before starting to work with the client. This includes obtaining the following information on each client:

In the case of a Natural Person:

  • Full name;
  • Physical address;
  • Address for correspondence if it is different than the physical address;
  • Telephone number;
  • Cellular telephone number if they have one;
  • Fax number if they have one;
  • E-mail;
  • Main activity in which the person is engaged;
  • Copy of an identification card or passport;
  • Client declaration stating what the main activity is of each corporation that the lawyer acts as the Resident Agent for;
  • Details of the people or corporations that can provide commercial and banking references or provide actual commercial and banking reference letters.

In the case of a Legal Entity:

  • Full name;
  • Jurisdiction and date of incorporation;
  • Articles of Incorporation;
  • Physical address;
  • Address for correspondence if it is different than the physical address;
  • Telephone number;
  • Fax number if they have one;
  • Name and E-mail of the Legal Representative or person responsible of the administration of the corporation;
  • Main activity in which the corporation is engaged;
  • Copy of an identification card or passport of the person(s) that is(are) direct or indirect owners of, at least, 25% of its capital;
  • Client declaration stating the main activity of each corporation that the lawyer acts as the Resident Agent for;
  • Details of the people or corporations that can provide commercial and banking references or provide actual commercial and banking reference letters.

Furthermore, lawyers must also comply with the following:

  • Record retention requirements for no less than 5 years;
  • Reporting suspicious transactions;
  • Reporting any cash transactions in excess of the B10,000 threshold;
  • Monitoring  transactions on a weekly basis;
  • Monitoring of account holders' transactions on a bi-annual basis.

Lawyers are not subject to AML laws, however under Law no. 42 of February 2011, lawyers have strict requirements of knowing the client and maintaining enough information to identify him/her.


DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Lawyers are not required to follow a risk-based approach to client due diligence.


ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

There are obligations to adopt enhanced due diligence measures for politically exposed persons. These mirror the FATF recommendations and include:

  • Establishing risk management systems to determine whether the client is a PEP;
  • Obtaining senior management’s or directors’ approval for establishing accounts and business relationships;
  • Determining source of wealth and funds;
  • Conducting ongoing monitoring of account transactions.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Institutions are not allowed to apply simplified client due diligence measures when identifying/ verifying the identity of the client or beneficial owner.


ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

As lawyers do not have any obligations towards AML legislation, they heavily rely on banks to gather more in-depth information about their clients, beneficial owners and source of funds and to report any suspicious transactions to the regulator.


WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Every person and entity subject to anti-money laundering regulations has the obligation to report suspicious transactions to the Unidad de Análisis Financiero (Financial Analysis Unit of the Treasury Ministry). However, the law does not state an obligation specifically on lawyers to report suspicious transactions.


DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

N/A. 


DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

No.


ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Once a suspicious transaction report has been filed, there is no specific provision that prohibits a lawyer from proceeding with the legal advice/transaction but they do so at their own risk. Consent from authorities is not required in order to proceed. It is important to note, that while not prohibited, it is recommended for the lawyer not to proceed and to distance themselves from the suspicious client.


IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Although not expressly applicable to lawyers, Article 1(6) of Law 42 on Measures for the Prevention of the Crime of Money Laundering prescribes that Reporting Entities shall not disclose information to clients and third parties about possible suspicious transactions.


DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

There are no particular restrictions for lawyers on accepting a new client.


ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

There are ongoing monitoring requirements for certain customers based on a pre-determined threshold.


DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

None.


HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

Lawyers in Panama have been implicated in Money Laundering and have even been included in the Specially Designated Nationals list or SDN list.


HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

The FATF has not conducted a mutual evaluation report on Panama. However, according to the International Monetary Fund Report Detailed Assessment on Panama released in February 2014, lawyers and notaries are not included in the anti-money laundering and anti-terrorism financing regime.



Information provided by:

CENTRAL LAW Panama

Benedetti & Benedetti
Mr. Giancarlo Benedetti
Mrs Alida Benedetti

Ave Samuel Lewis y Manuel Maria Icaza
Edif. Comosa piso 21,
Ciudad de Panamá, Panamá.
T. +(507) 208-9000

panama@central-law.comwww.central-law.com/ES/panama