Panama legislature approves beneficial owner register Bill
When the law takes effect, resident agents will be required to file relevant information on all Panama-incorporated legal entities for which they are acting. All legal entities incorporated in Panama must appoint a Panamanian lawyer or law firm as their resident agent.
The aim is to help the authorities combat money laundering and related risks. In June 2019, the global Financial Action Task Force (FATF) placed Panama back on its grey list of monitored countries, citing strategic anti-money laundering deficiencies, resulting in the Panamanian authorities agreeing to implement FATF's list of recommendations.
These included 'ensuring adequate verification and update of beneficial ownership information by obliged entities; establishing an effective mechanisms to monitor the activities of offshore entities; assessing the existing risks of misuse of legal persons and arrangements to define and implement specific measures to prevent the misuse of nominee shareholders and directors; and ensuring timely access to adequate and accurate beneficial ownership information.'
The jurisdiction's current beneficial ownership regime, Law 23 of 27 April 2015, requires resident agents to perform due-diligence on their client entities' ultimate beneficial owners. This information will now be collected on the register, under the control of the Superintendence of Non-Financial Institutions.
The new Bill requires resident agents to register with the Superintendence and submit the required information within 30 business days of the company being incorporated or of being appointed as its agent. A grandfathering clause grants resident agents of existing companies six months to register and obtain the required information. An agent that fails to do this will be required to re-sign as the entity's resident agent.
A legal entity whose resident agent has not registered with the Superintendence will be suspended from the Panamanian Public Registry, and will be removed after failing to file for two years.
Changes to the information must be notified within 30 days. Resident agents will be fined from USD1,000-5,000 for each legal entity whose beneficial information is not registered or updated, with progressively increasing daily fines. Extra penalties will be applied for filing false information.
The register will contain the beneficial owners' names, ID numbers, dates of birth, nationalities, addresses, and the date the individual became the beneficial owner. This information will not be publicly available except to resident agents, registered legal entities, and two designated officers with the required security and technical safeguards. Failure to keep the information confidential would result in a fine of USD200,000 on the person responsible. Anyone who gains unauthorised access to the register is liable to a fine of USD500,000.
The Bill's effective date is subject to the executive branch's approval.
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