Panama’s government approves bearer shares immobilization law
Tuesday, 27 August, 2013
The Panamanian government has taken an important step in the fight against tax evasion. In early August, it approved a new law to immobilise bearer shares.
The law, signed by Panama’s President Ricardo Martinelli, establishes that any owner of bearer shares has to appoint a guard who will identify the final beneficiary of the shares.
This enables any sanctioned authority to obtain updated information about the shareholder’s identity whenever necessary without affecting the free and confidential movement of the bearer shares, AFP reported.
However, the immobilization does not mean that bearer shares are eliminated. The owners keep the exercise of all the political and economic rights attached to their ownership.
The law will come into effect in two years and is expected to adapt local legislation to international standards and avoid Panama being blacklisted as a tax haven.
Panamanian president Ricardo Martinelli said that he considers the immobilization of bearer shares to be an efficient tool against tax evasion and patrimony hiding.
Banks, trustee entities and brokerage firms registered at the country's Supreme Court of Justice will be entitled to act as guards of the bearer shares certificates.
A statement by the government highlighted that Panama "strengthens its intention of complying with transparency practices in the use of financial services."
Since 2010 the Central American country has signed about 20 agreements to swap tax information with other members of the Organisation for Economic Co-operation and Development (OECD).
Panama's economy is growing 10 per cent annually and has a strong banking system. The government is struggling to keep out of the black lists that denounce countries that do not cooperate in the battle against tax evasion.
The approval of the bearer shares immobilization law is seen as proof that the Panamanian government is seriously committed to collaborating with international organisations with the aim of achieving better control of illegal activities.