PANAMA Law and Practice Contributed by: Inocencio Galindo, Omar Rodriguez, Maria Eugenia Brenes and Joy Paull Torres, Morgan & Morgan
3.4 Insider Dealing, Market Abuse and Criminal Banking Law In Panama, the issues of insider dealing, market abuse and criminal banking law are codified in the Criminal Code under Articles 238, 243 to 253, and 283. These provisions establish the legal framework for address - ing and penalising such offences, ensuring the integ - rity and transparency of financial and market activities within the country. On conduct that relates to insider dealing, Article 249 of the Criminal Code addresses the misuse of privi - leged information. It stipulates that anyone who, for personal gain or the benefit of a third party, improp - erly uses or discloses privileged information obtained through a privileged relationship, relating to securities registered with the National Securities Commission or traded in an organised market, causing harm, shall be punished with a prison sentence of six to eight years. For the purposes of this Article 249, confidential infor - mation is defined as information that, by its nature, can influence the prices of securities and that has not yet been made public. Additionally, Article 251 of the Criminal Code penal - ises the creation of false or misleading appearances in the trading of registered securities. It states that anyone who, with the intent of obtaining undue prof - it for themselves or a third party, makes deceptive offers to buy or sell registered securities, creates a false impression of active trading, or manipulates the market price of any registered security to facilitate its sale or purchase, shall be punished with a prison sen - tence of four to six years. On market abuse, Articles 238 and 239 of the Criminal Code address market abuse and consumer protec - tion. Individuals who withdraw or withhold essential raw materials or products from the market with the intent to create shortages or manipulate the prices of goods or services, thereby harming consumers, shall be sanctioned with imprisonment from two to five years. Also, those who, to the detriment of consumers, charge higher amounts for products or services meas - ured by automatic devices or apparatuses shall be sanctioned with imprisonment of four to eight years.
senior management – ie, partners, directors, officers, representatives, etc. These people will be obligated to monitor the implementation of internal controls, improving or reinforcing them, and will be responsi - ble for maintaining such internal control structures in their company. Due Diligence Obligation Obligated parties must take the necessary measures to identify, evaluate and understand their AML/CFT risks relating to clients, countries or geographic are - as, products, services, transactions, or distribution or marketing channels. Obligations to Report Unusual or Suspicious Transactions Under Law 23 of 2015, obligated entities and super - vised professionals in Panama must promptly report any suspicious or attempted transactions to the UAF, regardless of the amount. Suspicious transac - tions include any activity potentially linked to money laundering, terrorism financing, or the proliferation of weapons, even if outside normal business practices. Entities must keep detailed records of these transac - tions and update due diligence files accordingly. Additionally, entities must have systems to detect unusual transactions, analyse them and determine whether they should be reported as suspicious. All unusual transactions must be documented, including who analysed them and the decision made. If deemed necessary, these can be reported to the UAF using the same form for suspicious operations, supporting Panama’s efforts to combat financial crimes. Failure to report suspicious transactions as required by Law 23 of 2015 can result in significant adminis - trative, financial and even criminal sanctions for obli - gated entities in Panama. These include fines that may exceed PAB300,000 in cases involving serious offenc - es such as tax fraud or money laundering. Entities may also face disciplinary actions, such as the suspension or revocation of operating licences, and criminal liabil - ity for compliance officers or directors who knowingly omit reports. The law emphasises immediate reporting upon detection and requires robust internal controls to ensure compliance, reinforcing Panama’s commit - ment to combating financial crimes.
210 CHAMBERS.COM
Powered by FlippingBook