During the years 2020 and 2021, several key pieces of legislation were passed in Panama.
One of the most important pieces of legislation in Panama’s increasing arsenal of Anti-Money Laundering, Anti-Terrorist Financing and Anti-proliferation of weapons of mass destruction legislation during this period was law 129 of March 2020.
This law introduced the news that Panama was making a very important step forward on the offshore world stage.
It introduced the requirement to register basic details of the beneficial owners of Panamanian legal entitles in a Registry of Final Beneficiaries which was at that time in its infancy.
The requirement for registered agents to gather information on beneficial owners was certainly not new and been a focus both for Panama and other jurisdictions for several years previously.
However, Law 129 listed the specific information that would be required to be held in the Registry of Final Beneficiaries.
Panama looked to be making strides towards the monumental challenge of gathering the data, this time in a centralized registry.
There were many technical, operational and data protection elements which needed to be carefully analyzed but this was a crucial move for Panama.
It was a moment of encouragement for those in the compliance field and a basis for what would become vital.
Law 129 was subsequently modified by Law 254 of November 2021. Decree 13 of March 2022 is also relevant.
The following is an overview of the most important aspects of Panamanian legislation that currently govern the Registry of Final Beneficiaries and its operation.
Time limit within which to register information in the Registry of Final Beneficiaries.
Each Registered Agent of a Panamanian legal entity is required to register information in the Registry of Final Beneficiaries within fifteen working days, following the incorporation, or registration, of a new legal entity.
Information required in the Registry of Final Beneficiaries.
Information required regarding each Panamanian legal entity for which a Registered Agent provides services and its beneficial owners, is as follows.
Legal entities
- Full name.
- Registration details in the Public Registry (folio).
- Date of registration in the Public Registry.
- Address.
- Main, or principal, type of business activity carried out by the legal entity.
- The jurisdiction where the legal entity operates, in the case of a commercial entity.
Beneficial owners of legal entities
- Full name.
- Passport or personal ID number.
- Date of birth.
- Nationality.
- Address.
- Date on which the individual became a beneficial owner.
Change of Registered Agent.
Registered Agents who resign services to a legal entity must inform the Superintendency for Non-Financial Reporting Entities of the resignation within ten working days following the resignation.
At that point, the outgoing registered agent will no longer have access to the Registry of Final Beneficiaries, as regards that legal entity.
Similarly, the new registered agent must inform the Superintendency for Non-Financial Reporting Entities within fifteen working days of their appointment as new registered agent, as regards that legal entity.
The new Registered Agent will be given an access code to be able to access the Registry of Final Beneficiaries as regards the legal entity, to which they are appointed as the new Registered Agent.
Information previously registered in the Registry of Final Beneficiaries by the outgoing agent will not be accessible by the new Registered Agent.
Updating information provided to Registered Agents.
Legal entities must provide the information required to be registered in the Registry of Final Beneficiaries to the Registered Agent.
There is also an obligation to inform the Registered Agent of any change in beneficial ownership, or any change in any of the information pertaining to the beneficial owners that is required to be registered in the Registry of Final Beneficiaries, within fifteen working days.
In turn, Registered Agents will then have five working days within which to update the change in the Registry of Final Beneficiaries.
Length of time for which information in the Registry of Final Beneficiaries must be maintained.
The information registered in the Registry of Final Beneficiaries will remain in that Registry for the time during which the legal entity is active and for not less than five years following the dissolution of the legal entity.
Access to the Registry of Final Beneficiaries.
Access to the Registry of Final Beneficiaries is restricted to Registered Agents and to the two members of the Superintendency for Non-Financial Reporting Entities appointed to carry out that function.
The information held in the Registry of Final Beneficiaries will be strictly confidential and will only be provided to the competent authorities in strict compliance with the procedures, requirements and formalities applicable.
The competent authorities in line with Law 129 and Law 254, are the Superintendency for Non-Financial Reporting Entities, the Financial Analysis Unit, the Public Ministry, the Ministry for Economics and Finance, the DGI and whichever other institution or government body/dependency, that may be named as such in the future.
Sanctions.
Law 254 states that Registered Agents could be fined between $1,000 and $50,000 for each legal entity which was not registered in the Registry of Final Beneficiaries or for which the registered agent fails to update the information.
Law 254 also states that the Superintendency of Non-Financial Reporting Entities will order the Panamanian Public Registry to suspend the status of each legal entity which was not registered in the Registry of Final Beneficiaries, or for which the Registered Agent fails to update the information, meaning that it will not be possible to file any corporate document or request any type of certification for that legal entity.
The Fiscal Code will govern the procedures for reactivation, the time within which legal entities may be reactivated, procedures for dissolution and possibly liquidation.
Sanctions will also be applied in cases of registration of false information in the Registry of Final Beneficiaries, whether that be by the Registered Agent, or as a result of the provision of false or misleading information to the Registered Agent.
It is essential for the registered agent to verify the information provided to them for each legal entity to which they are acting as Registered Agents.
If the Registered Agent has been diligent in reviewing all the information received, which will be reviewed in conjunction with the information already gathered in line with Law 23 of 2015 and its subsequent resolutions and decrees, then there will be no liability on the part of the Registered Agent, should the information provided and registered in the Registry of Final Beneficiaries, be false or misleading.
That liability would fall on the legal entity, or beneficial owner, who intentionally provided false or misleading information to the Registered Agent.
Decree 13 of 25 March 2022.
The principal function of Decree 13 of 25th March 2022 is to outline the way in which Registered Agents of Panamanian legal entities must be listed in the Registry of Final Beneficiaries.
The enforcement of that legal obligation is also addressed.
Registration and access to the Registry of Final Beneficiaries.
It is important to emphasize the importance attached to the provision of an access code, known in Spanish and in the law as a ‘Código Unico de Registro’ or CUR, for the Registry of Final Beneficiaries, to each Registered Agent for a Panamanian legal entity.
Failure on the part of the Registered Agent to officially list their details in the Registry of Final Beneficiaries will prevent the provision of an access code, or CUR to the Registered Agent.
Without an access code to the Registry of Final Beneficiaries, any legal entity to which they act as Registered Agent will be unable to file any corporate documentation in the Panamanian Public Registry.
It is important to note that each Registered Agent is provided an access code, rather than an access code being assigned to every legal entity for which the Registered Agent acts as such.
It is also vital to bear this in mind in the case of changes from one Registered Agent to another.
If a legal entity chooses to use a new Registered Agent that has not been assigned an access code, or CUR, for the Registry of Final Beneficiaries, it will not be possible to register the change of Registered Agent of the legal entity in the Panamanian Public Registry.
Updating contact information for Registered Agents in the Registry of Final Beneficial Owners.
Every year the Registered Agent is required to confirm that their contact and corporate registration details have not changed, in order to ensure that their listing in the Registry of Final Beneficiaries remains valid and to ensure that their access code remains active.
Registered Agents are also required to inform the Superintendency for Non-Financial Reporting entities immediately if their contact or corporate registration details do change.
The Superintendency for Non-Financial Reporting entities will now also publish a list of Registered Agents who have been granted access to the Registry of Final Beneficiaries and whose listing remains valid and up to date, on their official web site.
Information required in the Registry of Final Beneficiaries.
Certain points regarding the information that Registered Agents are required to register in the Registry of Final Beneficiaries, regarding each Panamanian legal entity for which a Registered Agent provides services and its beneficial owners, were clarified in Decree 13 and the list of information required was modified slightly, as follows.
Legal entities
- Full name.
- Registration details as they appear in the Panamanian Public Registry (folio).
- Date of registration in the Panamanian Public Registry.
- Address.
Decree 13 clarifies that this refers to the location from which the legal entity conducts its principal, or main, business activity and from where it’s *administration is carried out.
This must be a business address, rather than just a P/O box.
*Decree 13 clarifies that this can be defined as the jurisdiction where the legal entity operates (if it is a commercial entity), where its main profits are generated, or from where important corporate decisions are made.
If the legal entity operates in more than one jurisdiction, then it is a requirement to list each jurisdiction.
If the legal entity is not a commercial entity, the jurisdiction in which the legal entity holds most of its assets is the one that should be listed.
- Tax ID.
*Registro Unico de contribuyente en Panama o ‘RUC’.
*Numeros de ID tributaria de donde sea residente fiscal la persona juridica, where applicable.
Note- it seems that in the conference of today, 10th May, the SSNF has stated that the numero de folio should be uploaded into the system, rather than the RUC.
Beneficial owners of legal entities
- Full name.
- ID or passport number.
- Date of birth.
- Nationality.
- Address. This is the address where the beneficial owner/s is/are domiciled.
- Date on which the individual became a beneficial owner of the legal entity.
If this is not known with certainty, the applicable date is taken to be the date on which the registered agent was informed.
Updates in the Registry of Final Beneficiaries for existing legal entities.
Registered Agents are required to ensure that the information that they have uploaded to the Registry of Final Beneficiaries, for existing legal entities is verified once a year.
The deadlines for updating the information depend on the dates of registration of the legal entity.
The respective dates are as follows.
- The 15th of July for legal entities registered between January and June of any given year.
- The 15th of January for legal entities registered between July and December of any given year.
Provision of additional information should it be required.
Decree 13 states that Registered Agents may be requested to provide additional information or documentation if this is required by the Superintendency of Non-Financial Reporting Entities.
Verification of information uploaded into the Registry of Final Beneficiaries.
Decree 13 also states that the Superintendency of Non-Financial Reporting Entities will verify the information that is uploaded into the Registry of Final Beneficiaries.
This will include checking that there are no matches with names of individuals subject to sanctions, or with any individual suspected of illegal activity.
Please note that verification of information will also be restricted to authorized personnel only.
Additionally, the Superintendency of Non-Financial Reporting Entities will issue a certification to any Registered Agent resigning services to a legal entity, stating that the name/s of the beneficial owner/s has/have been verified and no negative matches have been found.
This certification must be held on file by the outgoing agent for a period of five years following resignation of services.
Sanctions
Decree 13 reflects the sanctions included in Law 254 and states that if sanctions are imposed, a legal entity will only be reactivated in the Panamanian Public Registry once a fine is paid and the information pertaining to the legal entity and its beneficial owners is provided to the Superintendency of Non-Financial Reporting Entities.
Should you have any queries regarding the above, please contact us.
