PANAMA Law and Practice Contributed by: Inocencio Galindo, Omar Rodriguez, Maria Eugenia Brenes and Joy Paull Torres, Morgan & Morgan
1.5 Corporate and Personal Liability A legal entity can be subject to criminal liability when it is created or used to commit a crime. However, in the Panamanian legal system, it is not possible for the legal entity itself to commit a criminal act; it is the natural person who created or used the legal entity to commit the crime who is capable of guilt. This person is usually punished with imprisonment, but in some cases the law also allows the legal entity involved in the criminal conduct to be sanctioned, such as through fines, suspension of operations, or dissolu - tion of the company. Liability of the Legal Person and the Natural Person: Differences Regardless of the type of investigation, Panama’s legal system does not establish a difference between investigating legal or natural persons; both will receive the same treatment, and their rights will be respected. Directors and officers (legal representative, president of the board, manager, CEO) of a corporation would only be held responsible for a criminal act if it is prov - en, beyond reasonable doubt, that said persons knew that the company was created or used to commit the criminal act or if they maintained some degree of par - ticipation in the crime as authors or accomplices. In Panama, punishment is based on the law at the time the criminal act was committed. Therefore, the fact that the company created or used to commit the crime was acquired by or merged with another com - pany does not make the acquirer or counterpart in the merger responsible for a criminal act committed in the past. If the shares of a company are purchased, that company will continue to be liable in the event that it has been used to commit a crime, as long as it is proven, which would only carry sanctions. Likewise, if the company used to commit a crime is absorbed by another company in a merger, the absorbing com - pany would be assuming all the rights and obliga - tions of the absorbed company, which would include – in the author’s opinion – any criminal liability that the absorbed company may have had. This should not affect the directors or dignitaries of the absorb - ing company, since they had nothing to do with the absorbed at the time of the commission of the crime.
It should be made clear that the liability of legal per - sons in Panamanian legislation is limited, since it does not contain penalties precisely – sanctions are listed in a single article (Article 51 of the Penal Code), which range from a fine to the dissolution of the company. 1.6 Sentencing and Penalties Panama’s legal system includes a series of guidelines as to what must be considered when determining a penalty. For example, factors such as whether the perpetrator has a criminal record, the severity of the crime, and the existence of a relationship between the perpetrator and the victim are taken into account. Once the penalty has been set, and subject to the fulfilment of certain requirements, it is possible for a declared prison sentence to be suspended or replaced by another form of penalty, so that the perpetrator may receive a different type of punishment and avoid serv - ing jail time. There is also the possibility that, before the judge issues a judgment, the prosecutor and the accused person reach a plea agreement. This agree - ment results in a mandatory reduction of up to one- third of the penalty described in the law as the basis for the prosecutor to negotiate the reduction. Col - laboration agreements are also possible in Panama, which empower the prosecutor to dispense with the criminal prosecution in its entirety or grant reductions in the sentence on condition of the accused providing testimony or information relevant to the case. Regarding mitigation, the norm arguably provides for mitigating circumstances, which reduce not only the penalty to be imposed but also the seriousness of the action, and involve a subjective opinion on the part of the judge. By law, these must be considered when imposing sanctions or penalties; as far as legal entities are concerned, regulatory compliance programmes or criminal compliance would be an element to consider. The Penal Code maintains a list of these – see Article 90, where common mitigating circumstances include the following: • to have acted for noble or altruistic reasons; • not having had the intention of causing an evil of such seriousness as the one that occurred; • the physical or mental conditions that placed the agent in a situation of inferiority;
205 CHAMBERS.COM
Powered by FlippingBook