PANAMA Trends and Developments Contributed by: Rafael Rivera, Malvis Mina, Nicole Pérez and Carolina Lino, BDO Panama
coverage, and 8.5% for sickness and maternity benefits. Independent workers who fail to register under this system will be fined PAB100. It is expected that the Social Security Fund will co-ordinate with the General Directorate of Revenue to review the income declarations of these workers. Governance and Transparency To restore public trust, the Law introduces gov - ernance reforms within the CSS. Re-election of board members is prohibited, and external, independent audits will be conducted to ensure transparency and professional management. Investment and State Contribution To enhance the system’s profitability, the Law authorises the use of reserve funds: up to 10% may be invested through private administrators, and up to 90% in state-owned banks such as the Savings Bank and the National Bank. Addi - tionally, the State is required to make an annual contribution of PAB966 million, subject to review and adjustment based on technical recommen - dations. Regulatory Reforms in the Life Sciences Sector For several years, Panama had been engaged in discussions regarding the necessary amend - ments to the former Law 1 of 2001 on Medicines and Other Products Related to Human Health. This Law governed matters such as registration, importation, commercialisation, and surveillance of medicines, medical devices, cosmetics, anti - septics, among others. However, the Law exhib - ited several shortcomings, including frequent partial amendments that rendered certain provi - sions ineffective while others remained in force.
This legal fragmentation led to a lack of clarity within the sector regarding the applicability of the Law, resulting in reduced transparency in the processes for introducing health-related prod - ucts into the Panamanian market. In response, Law 419 of 2024 was enacted, repealing all previous regulations governing the health sec - tor and consolidating them into a single legal framework, which was subsequently regulated by Executive Decree No 27 of 2024. New Civil Procedure Code One of the most significant judicial reforms in the past decade is the adoption of the new Civil Pro - cedure Code of the Republic of Panama, enact - ed through Law 402 of 9 October 2023, and set to enter into force in October 2025. The Code governs both civil and commercial disputes. Streamlining Judicial Processes Although electronic case files already exist, the new Code mandates the use of electronic sys - tems through the Automated Judicial Manage - ment System. It also allows for procedural acts to be conducted using AI, establishes email as the preferred method for data transmission in judicial proceedings, and enables virtual hear - ings. This modernisation facilitates access to justice even on non-business days or outside regular court hours, with legal effects considered to take place on the next business day. The Code introduces new forms of notification, including written notice via email and notarial notification. In the latter, the notary acts as the process server, and if the person is found and refuses to accept service – or is not found – a formal record is issued, which constitutes valid notification.
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