Panama’s Pandora Bunker

The Public Regsrty

 
1,010Views 4Comments Posted 05/10/2021

In the world we live in, what is legal is not always moral, and what is moral is not always legal. The revelations that are just beginning to be known of the 11.9 million documents analyzed by hundreds of journalists from the International Consortium of Investigative Journalists (ICIJ ) once again confront international public opinion with the reality of tax double standards of today's society.

As the revelations progress, each citizen must understand what the elements of judgment are to weigh the journalistic discoveries. Here I am going to point out the most obvious and some legal technicalities that - albeit annoying - are key to unraveling Panama's role in all of this.

The power of information
ICIJ journalists do not steal information, they do not hack computer systems, much less pay for the information. The ICIJ does not keep them veiled from Panama and these revelations are not campaigns by the Organization for Economic Cooperation and Development or by George Soros, much less by Movin. This information is the result of years of work and analysis.

Having corporations, trusts, private interest foundations, insurance and reinsurance companies, (as in the case of Bermuda) is not a crime. To the annoyance of the ordinary citizen, wealthy people and companies of a certain size use all these legal structures with one purpose: to optimize money and asset management.

Limited liability companies in all their varieties, including public limited companies, have allowed the development of modern capitalism, since they limit the risk that investors or owners of that company lose their personal or family assets because the said company limits up to where they can be responsible, that is, to the maximum of the capital of the company.

Corporations and their other relatives also serve a laudable purpose, that of protecting the assets of people in delicate situations, such as an opposition businessman in Nicaragua or Venezuela. The obverse of this coin is that corporations can also be used to hide assets from the treasury, business partners, an ex-wife, or, worse still, to launder bribes, channel bribes or hide ill-gotten assets.

Changing obligations of Panama lawyers
Law 32 of 1927 established the public limited company regime in Panama. Throughout the 20th century, the business grew slowly until the International Banking Center appeared and this allowed combining encrypted bank accounts with public limited companies that had bearer shares. At that time, in the crazy 1970s, resident agents, that is, lawyers or law firms that constituted the corporation and maintained its registry operation had no greater responsibility for what was done or happened with the corporation. anonymous society.

These Panamanian legal entities were so attractive that large financial intermediaries, the United States and Western Europe, bought them in volume to offer them to their clients. In this way, the Panamanian lawyer had no idea who was the final beneficiary of the company, if he was in Alaska, Antofagasta, Australia, or in the house next door.

The sad truth is that very early in its republican history, Panama decided that its tax system was territorial in nature, that is, only the rents or income generated by economic activities within Panamanian territory are subject to the payment of taxes.

With the proliferation of free zones and special tax regimes, this ended up being a half-truth. In contrast, the vast majority of Western countries follow another rule, that of universality. If a citizen or permanent resident of a country with a universal tax regime generates income outside the country, they have to pay taxes. Hence the beauty of the Panamanian system: highly reserved corporations, a territorial tax regime, a flexible financial center, and authorities indifferent or too weak to pose a threat.

The path of change
In the early 1990s, the Treaty of Mutual Legal Assistance was signed between Panama and the United States This represented the first break in the strength of Panamanian corporations and encrypted accounts. Subsequently, the first substantive transformation occurred with Law 2 of 2011, which forced resident agents to carry out “due diligence” on their clients. Law 23 of 2015 dealt a very hard blow to law firms, by establishing the obligation to report the transactions of all their legal instruments (companies, trusts, and private interest foundations), in turn, the compliance officer was created to monitor that the obligations established by those laws are effectively executed.

On the other hand, Law 129 of 2020 established a system for law firms to inform the authorities for very specific purposes, the real identity of the beneficiaries of the legal entities they represent. This norm complements the largest transformation of the Panamanian tax system in the republican life of this country: Law 70 of 2019 established the tax evasion of 300 thousand dollars or more in a fiscal year as a crime part of the Penal Code and it was also considered as a crime preceding money laundering.

With these laws and dates, then it can be assessed whether the information from the ICIJ regarding Panamanian lawyers indicates the possible commission of a crime, or one more vividness of the capitalist system.

Panama has failed to fulfill some of its tasks in matters of financial transparency, documentation of the final beneficiaries and, of course, in matters of justice. This, which the international organizations and most of the developed countries reproach us, is the great cause of the disastrous lists and also of much opacity in the Panamanian economy itself and in public contracting.

Very controversial revelations are sure to come in the coming days. The great option for Panamanians is to turn a crisis into a great opportunity and decide whether it is worth all the economic and reputational damage that the country faces to continue maintaining a part of the financial legal services sector, which is becoming a permanent threat. to the rest of the financial sector and the entire national economy.

In the 1950s, General Motors Chairman Charles Wilson coined the phrase: "What's good for General Motors is good for America." There are those who think that what is good for the opacity and little transparency of corporations, private interest foundations and trusts is good for Panama. In neither case is this true. -Rodrigo Noriega, LA PRENSA



Comments 4

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kathybar1

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1 month ago
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George Klk

Panama: Butler's States Panama Taxes Better than Universal? Panama is a haven of financial corruptions attracting all kinds of flea blood suckers! Butler now states... a universal tax that has no references of normality. Most critics appear to side track from the real issues of the Panama government various methods and tactics to extrude money including just walking into a bank and demanding money Just become a Panama president and say, "The boss" which is what former pres. Martinelli did. I have written this out clearly in unbroken sentences without a list of facts for those suffering from mental agony trying to put my words together. Panama has many ferocious problems of powerful political circles with Martinelli and determination with his sons to take the whole of Panama financial and economic system with the forces of a foreign Italian invasion in the provinces of Panama! Italy just doggedly and blatantly declared Martinelli's former personal Secretary a free Italian citizen and will not be extradited to Panama as was reported by La Prensa! The former Secretary Chichi De Obarrio, was freed by the Panama authority. Obarrio was crucial and critical in the trial against Martinelli and if someone would put this together, would understand Obarrio would have been a key witness! This of course means Panama authorities protected former president Martinelli against his alleged crimes that are so confounding and profound, no one appears to believe it and disregard the many issues as confusing! Former Panama president will be running to get himself re-elected! Just think for a second the implications and the future consequence based on the desperation of Martinelli with his sons awaiting extradition to the U.S.A. for money laundering. Just try and wrap this around your head (Captain), it is what it is! Why should I try to stay on one corruption subject when there is a ton that needs to be shouted at the top of a mountain despite a bullet finding its mark in my direction!

1 month ago
user
General Butler

On the contrary, all of these 'revelations' from the Pandora, Paradise, and Panama papers projects are most certainly the product of unscrupulous NGOs working on behalf of the one-world-government empire of tyranny that has been descending upon the world since Paul Warburg told the U.S. Congress in the early 20th century they would get it whether they like it or not. Secondly, territorial taxation is vastly more fair than universal taxation - that is, if you are to believe any type of income taxation is fair, a debatable point. Panama's overarching issues result from a culture of corruption, a seemingly congenital condition of always wanting to steal as much as possible whenever possible. The criminal class that has stolen billions of dollars from the public treasury should be the focus of citizens and journalists. If Panama were to go to universal worldwide taxation it would be a sad day from freedom, a huge win for the globalists who detest Panama's sovereignty, a massive hit to the economy and dare I say the tax base of Panama. Do not be fooled.

1 month ago
user
George Klk

Panama: Protesters... To the World with the List of Corruptions. The world will know by your analytical investigation and public signs the seriousness of Panama's government corruptions. Do not hesitate to list the presidents and back up the crimes listed with the facts! Use good illustrated art work of Pres. Cortizo's / Abrego's environmental destruction of... Panama's soil and the dangerous harbor of mosquitos near Abrego's home. List the Corruptions for your demonstration signs.... too many fronts, too many battles and too many foreign interference with... Panama's financial affairs, economy and political agendas against the Panamanians. It's called the... Panama solution, destructive forces against... Democracy! You have the facts, use the internet and get the word out. Pandora Papers proves three (3) Panama president secret underground accounts. Panama president Cortizo is not listed because of his Constitutional protection. Cortizo Manure / dirt business operation with Abrego with aerial photos supplies your evidence of facts. Do not be discouraged... Panama's legal system is corrupt with... KEY... witnesses left out of the legal proceedings such as... Martinelli's partner in crimes for State funds theft... Chich De Obarrio whose location was known and detained / released from Italy's prison. Fugitive Chichi Walks Free. The Milan Court has ordered the release of Adolfo Chichi De Obarrio , detained eight days ago at the request of the Panamanian authorities, who require him for extradition. The information was confirmed by Gabriele Minitti , De Obarrio's lawyer, who also indicated that his client had already been released from prison and, at the moment, is without precautionary measures. His passport was not even taken away or a bond was imposed reports La Prensa. “He is a free Italian citizen. Italy is not going to extradite him”, the lawyer stressed. Source: NewsRoom Panama <> Panamanians... you have the facts! Panama is corrupt and they will beat you in the streets with powerful forces to take away your financial securities and freedom! Do not trust your government of... Fake - Panama Italian Mafioso's!

1 month ago
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