PANAMA Law and Practice Contributed by: Inocencio Galindo, Omar Rodriguez, Maria Eugenia Brenes and Joy Paull Torres, Morgan & Morgan
Criminal Conduct in Approvals Outside the Parameters of the Banking Law In Panama, specifically regarding insider trading, the Criminal Code stipulates that directors, managers, legal representatives or employees of financial insti - tutions who approve credit or financing beyond legal regulations, potentially causing forced liquidation, insolvency or permanent illiquidity, face imprisonment of four to seven years. This penalty also applies to beneficiaries involved in the crime and is increased by a quarter if done for personal gain. Individuals who use or disclose privileged information for personal or third- party benefit, causing harm, face six to eight years of imprisonment. Privileged information is defined as confidential data that can influence securities prices and that has not been made public. 3.5 Tax Fraud Panama has taken a significant step in its fight against financial crimes by enacting Law 70 of 2019, which criminalises tax evasion. The Criminal Code stipu - lates that anyone who intentionally commits tax fraud against the National Treasury, affecting the accurate determination of a tax obligation to avoid paying taxes in whole or in part, shall be punished with two to four years of imprisonment. Under this regulation, any indi - vidual who intentionally evades taxes amounting to USD300,000 or more in a calendar year faces severe penalties, including a prison sentence of two to five years and a financial penalty ranging from two to ten times the amount evaded. This law aligns Panama with international standards set by organisations such as the Financial Action Task Force, and aims to enhance the country’s compliance with global anti- money laundering and tax transparency norms. The regulation has been well received by local business associations and government agencies, as it strength - ens Panama’s legal framework and helps maintain its international investment rating. By criminalising tax evasion, Panama has demonstrated its commitment to upholding the rule of law and fostering a transpar - ent financial environment. No reporting requirements or procedures are stipu - lated, but they are usually initiated by the regulatory authority, with copies being sent to the Public Pros - ecutor’s Office.
Law 70 of 2019 punishes anyone who personally, or through third parties, alters securities, goods and other financial resources in full or partial knowledge against the Panamanian National Treasury. These actions will be punished with a sentence of two to four years in prison and fines of one to three times the amount of the tax defrauded. In addition, if it is determined that the offence was committed through one or more persons, the penalty will be imposed on the legal entities in question, and will be a fine of one to three times the amount of the tax transferred. The penalty described is applicable when the amount of the tax is equal to or greater than USD300,000 in a fiscal period. Cases where the tax amount is less than USD300,000 will be sanctioned by the General Direc - torate of Revenue (DGI). 3.6 Financial Record-Keeping Articles 244 and 245 of the Criminal Code address financial record-keeping offences. Individuals who destroy, conceal or falsify accounting books, finan - cial records or other financial information of a natural or legal person to obtain, maintain or extend credit or capital facilities from financial institutions, resulting in harm, can face six to eight years of imprisonment, and the same applies to those who use or benefit from falsified documents. These penalties are also applicable to those who destroy, conceal or falsify financial records or custody account entries of enti - ties registered with the National Securities Commis - sion or operating as investment advisers, investment companies or intermediaries, also resulting in harm. 3.7 Cartels and Criminal Competition Law With regard to competition-related crimes in Panama, Article 238 of the Criminal Code penalises individuals who withdraw or withhold raw materials or essential products from the market with the intent to create shortages or manipulate prices of goods or services, thereby harming consumers. The punishment for such offences is four to eight years of imprisonment. The Criminal Code also addresses the fraudulent billing of higher amounts for products or services measured by automatic devices, to the detriment of consumers, and imposes a prison sentence of two to five years for such actions. Under Law 45 of 2007, absolute and relative monopolistic practices are fined; nonetheless, these practices are not considered crimes as per the
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