PANAMA Trends and Developments Contributed by: Inocencio Galindo, Omar Rodriguez, Maria Eugenia Brenes and Joy Paull Torres, Morgan & Morgan
Sanctions applied to a legal person declared responsible for committing a crime The criminal sanctioning of legal persons is regulated in Article 51 of the Criminal Code, which establishes that, when a legal person is used or created to com - mit a crime, even if it did not benefit from it, a criminal sanction will be applied to it. Among the sanctions are: • the cancellation or suspension of its operation licence; • a fine of not less than PAB5,000; • total or partial loss of tax benefits; • disqualification from contracting with the State; and • dissolution of the entity. How to avoid the criminal liability of legal persons In accordance with doctrinal and jurisprudential opin - ions, a legal person shall be liable under criminal law in the event that there exists an organisational defect in its structure. The notion of “objective dangerousness” of the legal person thus arises, which is understood as the set of characteristics existing in the organisational structure of an entity that leads to the commission of crimes. For crimes to be attributable to the organisational structure, they must have been committed as a con - sequence of the lack of control and/or supervision in the legal person or due to the promotion, favouritism or acquiescence of the hierarchical superiors of an organisation. Unlike for natural persons, where culpability implies proof of the direct commission of a crime, for a legal person there exists the “attribution or imputation of criminal liability”: • for having allowed or favoured the commission of a crime by a natural person related to the entity; • by failure to create a business culture of regulatory compliance; and • for infringing its responsibility to foster compliance with the law and establish barriers to avoid or hin- der the commission of crimes by members of the organisation during the performance of their duties.
Introduction The landscape of criminality has fundamentally shift - ed from individual acts to sophisticated operations embedded within corporate structures and digital net - works. This evolution demands a parallel transforma - tion in legal systems, moving beyond traditional doc - trines to address collective responsibility, systemic corruption and digital vulnerabilities. In Panama, this imperative is reflected in three significant legal devel - opments: • the push to establish a robust framework for the criminal liability of legal persons; • the introduction of the expansive General Anti- Corruption Law (Bill 291); and • the implementation of data protection protocols under Law 81 of 2019. While targeting distinct areas – corporate crime, public sector corruption and data security – these initiatives converge on a common goal: to close legal gaps that have allowed complex, socially damaging offences to thrive. This analysis explores the pros and cons of these legal reforms, examining whether they strike a necessary balance between empowering the state and safeguarding fundamental rights in the pursuit of justice. Criminal Liability of Legal Persons The criminal liability of legal persons is the legal attri - bution of criminal consequences (sanctions or meas - ures) to collective entities – such as companies, asso - ciations, co-operatives or other forms of legal persons – when, within the framework of their activities, crimes are committed for their direct or indirect benefit. In other words, not only can natural persons be crimi - nally liable but so too can legal persons, provided that the unlawful conduct was executed by their represent - atives, administrators or managers, in the exercise of their functions, or by their employees or dependents, when the crime was made possible due to the lack of controls, supervision or regulatory compliance within the organisation.
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