Panamรก Canal: It was time 0 Election ... What awaits us Gangs: firm hand? What do we want for a new Republic?
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ISSN 1726-1485 January Edition 2014
Colaboradores en ésta Edición José Javier Rivera Giovana del C. Miranda I. Roberto Eisenmann, Jr. Lucila Rivas Maybé Mendieta Karen Fábrega
CONSEJO EDITORIAL José Javier Rivera
Giovana del C. Miranda
Fotografía - Mariela De Sedas de Sanjur Roberto Ramos Diseño y Portada: Virginia Medina
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CONTENT P.6 P.7
Editorial AN INDIRECT PRESIDENTIAL REELECTION
Pluma invitada ¿What do we want for a new Republic?
Normas de interés
P.9 P.10 P.15 P.16 P.17
P.18 P.19 P.20 P.23 P.25
BANKS WILL HAVE TO PROVIDE SPECIFIC ADDITIONAL CREDIT PORTFOLIO IN COLON FREE ZONE NEW MINIMUM WAGE RATES PUBLIC RESIDENTRIAL BASIC SERVICES WILL TAKE PART OF THE CREDIT RECORD. INCENTIVES ARE GRANTED FOR THE CREATION OF MICROCOMPANIES OF LIMITED RESPONSIBILITY CHANGES IN CHATTEL MORTGAGE NEW WORK PERMIT FEE FOR CUSTOMS PATROL SERVICE ECONOMIC MATCHING FOR PEOPLE WITH DISABILITIES
GANGS AND ORGANIZED CRIME Consulta, Doctrina y Jurisprudencia NEW MARITIME BOUNDARY BETWEEN PERU AND CHILE ELECTRICITY MARKET FORUM 2014
CONTENT P.27
Política WHAT IS EXPECTED OF ELECTORAL TRIBUNAL?
Economía Panameña
P.29
P.30 P.31
COMMENT ON CONSUMER PRICE INDEX NACIONALURBANO: DECEMBER 2013 AND ANNUAL AVERAGE PANAMANIAN ECONOMY IS STRENGTHENED JANUARY-SEPTEMBER 2013 INDICATORS QUARTERLY PRESENTS POSITIVE CHANGES WAITING IS KEPT THE WORKS DE PANAMA CANAL EXPANSION
Economía mundial
P.33 P.35 P.36
INCOME TAX INCREASE IN LATIN AMERICA, BUT ARE STILL LOW AND VARY FROM COUNTRY. STATISTICAL YEARBOOK OF ECLAC PANORAMA PROVIDES SOCIAL, ECONOMIC AND ENVIRONMENTAL EFFECTS OF LATIN AMERICA AND THE CARIBBEAN GLOBAL GROWTH ON THE RISE, BUT RISKS REMAIN, IMF PREDICTS THE REPORT IMF
Cápsula Deportiva
P.39 P.40 P.44
THE PARTISAN POLITICS IS INCONSISTENT WITH SPORTCápsula Cultural Activities and celebrations of the month of January Activities for the month of February
AN INDIRECT PRESIDENTIAL REELECTION
F
José Javier Rivera - Abogado
jjrivera@rbc.com.pa
ollowing the appointment of First Lady of the Republic as a candidate for the vice presidency in the electoral contest which ends on May 4, 2014, there have been a series of reflections and opinions on Articles 192 and 193 of the Constitution which respectively prohibit choice of relatives within fourth degree of consanguinity or second degree of President of the Republic who has held office in the immediately preceding period. As lawyers have warned enshrined in the discipline of constitutional law, the interpretation of Constitution not only involves a review of existing legislation but requires weighing the political elements that occur in the country. We know that our reelection concerning constitutional law completely provides for a 10-year ban for the agent on duty to aspire to the presidential throne.
corporate the first lady as his running mate on the payroll has restored this general concern. We believe that there are two instances to elucidate this sensitive issue, the Electoral Tribunal and Supreme Court. Nevertheless, given the peculiarities and abuses of power that have characterized current presidential year period, we believe we are in the presence of a presidential election in disguise that consummation, would complete fracture of constitutional ban on immediate reelection and at so would violated Article 178 of the Constitution. Given the seriousness of issues facing Panamanian democracy in this election, it’s compelling that the exercise of the sacred right to vote has as North strengthening democracy and as a result, regain strength and independence of institutions.
Otherwise sooner or later we face situations such Therefore, there is a recent accident claim reelec- as those currently living countries like Venezueted leaders of different, though, so far, have compre- la, Argentina, Bolivia, Nicaragua and Cuba. L&E hensive national majorities cast by such land claim. Beyond what has been said, it happens that in our Dawn and see... recent democracy voters have acted with sufficient composure to prevent any government of the day to satisfy his reelection ambition achieved. Now, for years and in various ways, current occupant of the palace of herons has made efforts in order to crystallize this aspiration, but each attempt political circumstances have put paid to his idea. It’s worth remembering that to realize his alleged decision not to run for reelection, a document before a notary, signed a similar affidavit to prove that not aspire to this position. So this movement of official candidate to in6. Legislación y Economía - Enero 2014
What do we want for a new Republic?
W
I. Roberto Eisenmann, Jr.
rbcweb@rbc.com.pa
hat can citizens do that in May we don’t cele- without asking the soul needs, esteem and dignity in rebrate An election, but the definition of our fu- turn, and have made every need Panamanians negotiated. ture as a democratic country... or autocratic? We, yes, an effort of democratic and republican moWe clearly see that the majority of our people are oppo- ral convergence we stop at this dark hour of the resed to autocracy but by the opposition division in two public, usurpation and abuse of our social and politiblocks endangers the democratic future of our nation. cal representation, to combat the degradation of our democratic institutions close to proud bossy that desFaced with this terrible reality, as a group have designed a demo- troy the rule of law, and to report degradation of dircratic platform for a new Republic, inviting all citizens to join. ty money to blow, and electoral mandates of conscience. I describe it:
We are simply a group of citizens who will not give the useful vote to defeat Martinelli and concur once Democratic Platform is not a political party nor in- again, with democratic energy and dedication to sertends to be. It’s a plural call all Panamanians Democrats vice, and despite them, rescue parties and politics. of Left, Center and Right, without distinction of class, party affiliation or religious belief, to stop and defeat We couldn’t reach an agreement with the Revolu-using tool- the system of Ricardo Martinelli guest and tionary Democratic Party and the Panamanian Parhis clique of corrupt and breakers republican legality. ty to reach agreement Alliance; continue navel gazing about, still kneeling others to the mercy of their disDemocratic Platform is an organization created to fight tributors gatekeepers of ill-gotten monies, and some political parties nor to denigrate and destroy the Po- infected myopia and human misery of Zero Circle. licy, noble activity that we consider an essential practice of democratic and civilized life of Panamanians. Divided most will win who purposely divided and remains divided. National interest in the hands of divided opponents, We are, yeah, spokespersons severe questioning of the literally becomes a chimera: fades fast in the shooting of thoconduct of members of the Mafia franchise called Cambio se gloriously determined to lose the May 2014 election call. Democrático behaviors increasingly laden with cynicism and contempt for morality, legality, decency and honesty. But we will not stop. Democratic Platform for a New RepuWe are, yeah, witnesses of vicious inability of their bosses blic is, therefore, a proposal timely and temporary converand electoral barons who refuse to make policy and prac- gence of a number of citizens who aspires to be a hinge of the tice to build a decent and educational society that refuse to opposition vote, what brought puppets by sending us not reach agreement and consensus decisions to ensure social follow the same corrupt abuser and disruptive of the Conscohesion and human development, who refuse to dignify titution which holds presidential throne in past four years. voters in the humble act of listening, hating represent them and interpret their genuine and legitimate interests and To operate the hinge must dare to break the barriers of tribal and per7. Legislación y Economía - Enero 2014
sonal
loyalty
is
conspiring
against
our
majority
status
and
our
ability
to
overcome.
The vote isn’t helpful vote against Martinelli to lose... useful vote is a vote against Martinelli to win! We don’t ask anyone to leave or resign their party to share its political project. We ask that you vote to win because by only winning opposition parties can survive, can rescue a model of inclusive market economy and a high social commitment. Only winning can rescue political projects of great democratic draft to serve the people, for the people and by the people. We are ready to put all our energy into one of the two opposition candidates most likely to win, who dares to break paradigms, tending sincere, generous and hopeful hand to decent, honest and patriotic majority of Panamanians, and to bury the opposition vote votes nightmare that haunts us and overwhelms since June 2009. Build the Alliance since vote in the ballot box. Dissent and independence can’t be an accomplice of defeat. No room for neutrality or abstinence, or impotence or discouragement. The fate of the nation is defined in the head of state, and there you go with democratic opposition vote. L&E
8. Legislación y Economía - Enero 2014
BANKS WILL HAVE TO PROVIDE SPECIFIC ADDITIONAL CREDIT PORTFOLIO IN COLON FREE ZONE
T
he Superintendent of Banks, through General Board Resolution SBP-GJD-0002-2014 of January 7, 2014 resolved to establish a requirement for additional specific provision to banks on the loan portfolio held in Colon Free Zone, from of February 28, 2014 with involvement in his statement. Consequently, the measure shall be applied by the bank, monthly, according to the set parameters so that is reflected in financial information that is submitted to the Superintendent. As for the minimum criteria that banks must use to calculate the additional provision of each of its clients in the Colon Free Zone and the loan portfolio can mention among others: 1. Discounting the book equity of each customer receivables to maintain market exposure of Venezuela, if applicable. 2. Calculate each customer debt by adjusting the heritage of conformity, adjusting the level of debt is calculated by dividing total liabilities by adjusted equity. 3. Should be considered only as their equity assets, excluding accounts payable to shareholders, but the accounts form part of the liability. Banks should reclassify its loan portfolio of Colon Free Zone, at the rates applied in the calculation of provision taking into account the criteria for special mention subnormal and doubtful. For purposes of providing notice of banks shall notify the amount of the provision recognized to the Superintendent, through monthly credit of the atom. Finally we have, that subject to prior approval of Superintendent, banks may reverse the established provision, either partially or totally, based on evidenced and duly submitted to Superintendent of Banks justifications. L&E
9. Legislaci贸n y Econom铆a - Enero 2014
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
NEW MINIMUM WAGE RATES
A
mong the latest fixes to dismiss 2013 and receive 2014, national government announced with great fanfare the approval of Executive Decree No. 182 of December 30, 2013 by which the new minimum wage rates are set at the Republic of Panama and entered into force on 1 January 2014. The Executive held that “increase ranges between 58 and 136 US $ and will benefit 270,000 workers, which is social justice to thousands of Panamanians.” It should be noted, that in years 2009, 2011 and in 2013 it was awarded to the Executive Branch to set the minimum wage in the country and due to this the Tripartite Commission not agreed.
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
Region 1: Panamá, Colón, San Miguelito, David, Santiago, Chitré, Aguadulce, Penonomé, Bocas del Toro, Chorrera, Arraijan, Capira, Chame, Antón, Natá, Las Tablas, Bugaba, Boquete, Taboga, San Carlos, Chepo, Guararé, Los Santos, Pedasí, Dolega, San Felix, Barú, Boquerón, Portobelo, Donoso, Santa Isabel, Santa María, Parita, Pesé, Atalaya, Changuinola y Chiriquí Grande.
Region 2:
Rest of districts in the country the Executive have neglected the is essential for fixing wage reminimum wage increase causes The concept of small business remains to be considered adverse effect on the economy. are those establishments with ten (10) or less permanent workers or plant, whether it is agricultural, livestock or The employers said that “a rise in minimum wage would service or retail fifteen (15) or less if is manufacturing and generate an increase in costs that wouldn’t be accom- twenty (20) or less in the case of manufacturing companies. panied by an immediate increase in productivity. This would represent a weight on the net cost of production Remarkably, the Decree establishes a “nationalized miin the country without a profit, what uncompetitive.” nimum wage” for certain economic to unify national minimum wage in a considerable number of acThe salary increase for Region 1 represents an increase of tivities, among which we can mention activities are: U.S. $ 136.00 over U.S. $ 488.00 on what percentage implies a 27.8%. For Region 2, the increase is about U.S. $ 58.00 U.S. Agriculture, Hunting, Forestry, Fishing, Quarrying, Proover $ 432.00 representing a percentage increase of 13.4%. cessing Sugarcane, Electricity, Gas, Steam, Air Conditioning, Sewer, Nightclubs, International Airports, InformaWith the entry into force of the new minimum wage join Re- tion and Communication, Telecommunication, Activities gion 1 new districts, ie 18 districts being Region 1 comprises Information Technology and Computer Service, Finan37 districts and Region 2 are the remaining districts as follows: cial and Insurance Activities, shopping centers with more than 50 local, Activities Administrative Offices, Business Support, Photocopying, Professional, Scientific and Technical, Law Firms, Accounting & Auditing, Arts EnterIncreases granted by issue of productivity turn, that results in a disproportionately
10. Legislación y Economía - Enero 2014
tainment and Creativity , Clubs; Gambling activities and Gambling, Casinos, Computer Repair and Maintenance; Horizontal Properties totaling more than 10 floors Dockers; Housing Tenants Association among others. Similarly, the for domestic
minimum service
monthly wage and provides:
Districts of Panam谩, l贸n and San Miguelito B/. Rest of districts in the try B/.
Another aspect is that the Decree refers to what is meant by agribusiness for purposes of the document, noting that companies that are engaged in production (crop farming), processing (processing what they grow or raise ) and marketing, in other words is a company doing the three stages (production, trade and industry).
Co225.00 coun200.00
The minimum wage rates for different regions and economic activities are:
11. Legislaci贸n y Econom铆a - Enero 2014
12. Legislaci贸n y Econom铆a - Enero 2014
13. Legislaci贸n y Econom铆a - Enero 2014
14. Legislaci贸n y Econom铆a - Enero 2014
PUBLIC RESIDENTIAL BASIC SERVICES WILL TAKE PART OF THE CREDIT RECORD
W
ith the passage of Act 135 of December 31, 2013 Act 24 of 2002 which regulates the inquiry on credit history of consumers or customers changed.
In this sense, has been established to include in the report on credit history of consumers or customers, entrepreneurs of micro and small business entrepreneurs or payment history of residential basic utilities such as electricity, water, telephone, sewer garbage collection and send economic agents, once the consumer has given consent. On the other hand, considered that operators providing basic residential utility must provide current, true and reliable information about their customers or consumers to maintain a relationship and payment history, which in turn have applied for remission of these data to the data reporting agencies to which these staff members is economic. Another aspect worth mentioning is the fact that the data provided by economic agents that provide basic services and public housing may be part of credit history of customers or consumers, entrepreneurs of micro and small businesses and entrepreneurs, so they can be used as an additional element when evaluating lending, provided they have permission or consent of the consumer or customer. With regard to the entry into force of Law in question, it shall enter into force within 120 days after enactment, which was made on January 10, 2014, so that will be in the month of May this year. L&E
15. Legislaci贸n y Econom铆a - Enero 2014
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
INCENTIVES ARE GRANTED FOR THE CREATION OF MICROCOMPANIES OF LIMITED RESPONSIBILITY Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
R
ecently, the National Assembly adopted Law 132 of 31 December 2013 creating Limited Liability Microenterprise and incentives for inclusion of informal sector is set to formalized economy.
The Micro Limited Liability shall be identified by the MRL stands and correspond to the Authority of Micro, Small and Medium Business check before signing the registration of a microenterprise that the person constitutes not the owner of rights in another legal entity distinct from this.
1. For municipal building permits, when it comes to building a local or annex, blueprints may be signed by a foreman if the modification doesn’t exceed B/.10,000.00, if exceeded shall be signed by an architect or engineer. 2. Pay income tax according to rate and amounts applicable to natural persons and shall be exempt from tax and supplementary dividend and single fee. 3. MRL registered in Business Registry AMPYME and have a higher than taxable income B/.11,000.00 and annual sales up B/.150,000.00 shall be exempt from income tax for the first two fiscal years from registration.
It has been established that the administrative procedure to be met by MRL to be expedited and abbreviated performance and cost for registration with the Public Registry shall be 4. Not require the use of enabled paper in efforts, actions twenty Balboas (B/. 20.00), just as there will be a single virtual and applications in all types of administrative processes window formed by the institutions involved in the procee- involved. dings relating to the commencement of operations of MRL. 5. No operation notice shall be required. The standard reference, provides the meaning of various terms The Act will come into force in comment after three months such as authority; Dissolution; Duration; Disclaimer, direct from promulgation, it will be from April 9, 2014. L&E and indirect fractionation; Microenterprise Private Limited, Heritage; Extension; Register; title and Transformation. In this vein, it’s only natural persons may form an MRL, natural person who owns the rights in other legal person can’t hold a MRL. Infringement by a natural or legal person in the aforementioned prohibition shall be subject to a penalty corresponding to five times the amount of unpaid taxes because of tax exemption. Among the exemptions that the law gives the MRL are:
16. Legislación y Economía - Enero 2014
CHANGES IN CHATTEL MORTGAGE Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
On January 8, 2014 was published in the Official Gazette number 27449-C Act 129 of December 31, 2013, which promotes access to credit and modernizing the system of security interests through the chattel mortgage.
the registration will be done through the registration form, which will have an affidavit and must be signed by the contracting parties before a notary, who, under his responsibility is authentic and ability of the parties.
Act 129, is to regulate the chattel mortgage to secure obligations of any nature, present or future, certain or determinable and other mechanisms not foreseen in the laws regulating the garment as mortgage receivables, mortgage inventory and intellectual property rights and any other contractual clause involving chattel security interest that is not covered by warranty pledge.
Other topics in the law governing reference, it is concerning the rights and obligations of the guarantor of a mortgage, chattel mortgage on present and future receivables, the enforceability and registration, priority rules, implementation of the chattel mortgage and penalties.
Since the rule governs the chattel mortgage, amending and repealing articles of Decree Law 2 of 1955 which deals with It has been established that the chattel mortgage no displa- the mortgage of chattels, that being so, that the debtor for purcement in terms of ownership of assets used as collateral, poses of Decree comprises the buyer in sales contracts with which is a difference with the pledge given by operation of retention of title and vendor includes seller in such contracts. law in the garment tenure of property given in warranty must keep the creditor or a third party designated by the parties. Amendments to Decree Law concern the adequacy of content of standard recently approved Law 129, so that On the other hand the chattel mortgage may be cons- only reference to retention of title sale is made, as is case tituted on one or more real or on all movables of a of Article 21, for instance, which contemplated the figure person, whether present or future, corporeal or in- before the mortgage contract and personal property sales corporeal, with fixed or determinable value later. with retention of title and from the reform contracts only It provides that any person with legal, natural or ju- with retention domino sale shall be granted by deed. L&E ridical, domestic or foreign capacity, can give collateral chattel mortgage or secured creditor be. Thus we see that the chattel mortgage shall be constituted by written agreement between the guarantor and guaranteed in cases where the registration of the relevant contract carried out in the Public Registry, the creditor requirement deed is required when the levy amount is equal to or greater than B/. 20,000.00. If the contract doesn’t require registration of deed,
17. Legislación y Economía - Enero 2014
NEW WORK PERMIT
FEE FOR CUSTOMS PATROL SERVICE
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
E
xecutive Decree No. 185 of 31 December 2013 published in Official Gazette No. 27,456 of January 8, 2014, created the work permit for foreign workers with Special Permanent Residence.
C
abinet Council issued the Cabinet Decree No. 1-A of January 7, 2014 the fixed rate of Special Control Service and Customs Enforcement, which shall be as follows:
1. By operating the service B/. 800.00 monthly. Among the eligibility criteria for this work permit, are Cer- 2. For each additional officer, the sum of B/. 550.00 monthly. tification issued by the National Migration Service stating It has been noticed that the customs supervision service the immigration status of the applicant; authenticated copy fee, paid to the Fund for Customs Public Management. by a notary public’s license issued by the National Immigration Service, copy of letter recommendation of the President. In this vein, we told that was also approved Cabinet Decree No. 5 of 14 January 2014 amending the CusThe work permit is granted indefinitely and will consist of B/. toms Administrative Services Fee for each import cus500.00, but the professionals having this foreign work permit toms declaration, provided that the customs value is may not hold those offices reserved by law to Panamanians taxable not less than B/. 1,000.00 will be B/. 100.00. by birth or naturalization, nor occupations those requiring suitability without complying with the requirements. In this sense, proceeds of the fee shall be distributed between the National Treasury and the National Customs AuthoRemember that there is an immigration category that rity and the amount collected will be transferred monthly was created by Executive Order No. 2 of January 17, to an approved by the MEF identified as Fund Customs 2013, corresponding to Special Permit Resident foreig- Security National Customs Authority bank account. L&E ners who the President recommends grant for reasons of national interest or benefit some service to the State. L&E
18. Legislación y Economía - Enero 2014
ECONOMIC MATCHING FOR PEOPLE WITH DISABILITIES
L
ast December, the National Assembly passed the Law 134 of 31 December 2013 published in the Official Gazette No. 27450 of January 10, 2014, which aims at economic equality of people with disabilities who are in the country, based on principles of equality, non-discrimination, participation, responsibility, equality of opportunity and respect for human dignity. Law 134 provides that all persons with disability who are duly certified by the Secretary of National Disability within the national territory, are Panamanian, Panamanian residents, temporary residents or nonresidents shall be granted including the following economic benefits and that overall fall of 19 points: 1. Discount 50% of the prices charged as general admission or economic rate of recreational activities and entertainment such as cinemas, theaters, sports, cultural and / or charity. 2. 25% discount on airfares domestic or foreign public and private companies. 3. Discount 15% in local restaurants or fast food outlets with national or international franchises. 4. Discount 25% of the value of individual consumption of food in the restaurants first and second class. 5. 20% discount on fees for GP surgery, medical and surgical specialties. 6. Minimum discount on regular prices for hotels, motels and inns: a. 50% from Monday to Friday. b. 30% on Friday, Saturday and Sunday. It shall be the Authority for Consumer Protection and Antitrust - ACODECO, penalize individuals or compa-
19. Legislaci贸n y Econom铆a - Enero 2014
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
nies that refuse to provide services under the conditions and with the established rates, the imposition of a fine. Within this context, ACODECO or Public Authority requires that any public establishment keeps visibly discounts are entitled beneficiaries of the Act at issue. Finally, it states that the benefit of equalization of opportunities for persons with disabilities for people with chronic diseases, involutive and/or degenerative. L&E
GANGS AND ORGANIZED CRIME
W
as recently approved Law 121 of 31 December 2013, which takes action against activities related to the offense of Organized Crime. Penal Code Among reforms to the Penal Code is a significant increase in penalty, pointing as penalty for the crime against human life from twenty to thirty years in prison. Previously the penalty was ten to twenty years.
Lucila Rivas- Abogada lucila.rivas@rbc.com.pa
which refers to one who uses physical force, threats or intimidation or offers money or other benefits to an expert, interpreter, or translator in a criminal investigation. In this chapter on the perjury section 388 was amended in its wording, no clutch worth didn’t change, being just five to ten years in prison. Amendments to the Criminal Procedure Code Act 63 of August 28, 2008.
Additional changes that article 132 of the numeral five budgets eliminating price, reward or promise of remu- It’s important to remember that the accusatory penal system neration. This indicates that it’s sufficient that the offense as a new criminal justice system is governed only in provinces remains set when running with malice or use of poison. of Cocle, Veraguas, Los Santos and Herrera, corresponding to the Second and Fourth Judicial Districts. However, prinWithin this law Article 132B added, pointing to a pe- ciples, rules and safeguards across the Republic of Panama. nalty of twenty to thirty years in prison, who causes death of another by order, remuneration or on This Act further to include all crimes listed in serious orders from a group of organized crime. This is organized crime including notes on the amendment of what is commonly known as deaths commissions. Article 252 concerning the Provisional Apprehension, said that orders remain the property of Ministry of EcoWithin Crimes against collective security, a chapter that nomy and Finance until the cause is decided by a judge. criminalizes Organized Crime was added, including within article 328 A and punished with imprisonment from fif- In the last paragraph of the writing of this article is included, teen to thirty years, for those who besides being part of when seizure of property is made on companies or businesses a criminal organization, committing offenses as serious. with two or more owners or shareholders, only rest on the party that is linked directly or indirectly to offenses established The same rule states an aggravating, penalty was increa- and respecting the rights of others affected by this measure. sed to half occur when any of the following circumstances: Article 253 also changes in procedure for provisional Ap1. The author has management functions, leadership or prehension of money and securities. Noting that these supervision within the organized criminal group. assets may be deposited in the National Bank of Panama 2. Be it any public servant. In addition, shall be disquaor the Fund has custody of the Attorney General’s Offilification from holding public office for twice as long in ce, except in crimes against human trafficking and relaprison. ted crimes, smuggling of migrants and organized crime 3. It use to minors or persons with disabilities. related offenses , in which case it will be deposited in the account of the Special Fund for Victims of trafficking or Law is added to Article 387, in regard to perjury, in- the Fund for Assistance to Migrants smuggled Traffic cluding within the norm all crimes considered serious Service National Migration or the special Fund for Vicand increasing imprisonment for whom it incurs four to tims of Organized Crime the Attorney General’s Office. six years. Basically this article supplements section 387, 20. Legislación y Economía - Enero 2014
The same article adds that compensation be made after the surplus will remain orders of Ministry of Economy and Finance, who will be responsible for depositing some funds described above as appropriate.
the Traffic in Persons and Related Activities. Article 77 was amended in relation to Special Prosecutor’s Office Organized Crime, noting that it will have specialized units and techniques determined by Attorney General’s Office.
Article 254 concerning the provisional Seizure of perishable goods and expensive maintenance is added, that when these goods constitute instruments of the crime of trafficking or related offenses or smuggling of migrants and related offenses or organized crime will be donated to the Commission national anti-Trafficking in Persons, the national Immigration Service or the National Secretariat for Assistance and Protection of victims, Whistleblower, Witnesses and Collaborators of the criminal process.
Our Considerations This Act makes substantial changes in both the Penal Code, prescribing penalties whose minimum penalty exceeds five years in prison for those crimes that the law itself, framed as serious. In the particular case of the Code, despite not apply throughout the Republic of Panama, introduces an active participation of the Ministry of Economy and Finance, when it comes to real Apprehensions.
It gives you the power to dispose of thoIn the case of the seizure of property that may be da- se assets seized proceeds of crime from arrest unmaged or deteriorate is added, the investigating officer til deposit, administration and sales as appropriate. shall inform Ministry of Economy and Finance shall, prior to its sale has valued by public auction, the pro- We believe this positive change, since only these receeds of the sale will be deposited in the Fund custody forms before the Public Ministry was in charge of guarof the Attorney General’s Office, National Bank of Pana- ding, sell or deposit the goods seized. However this ma, has the Special Fund for Victims of trafficking or the modification gives it some transparency to the destinaFund for Assistance to Migrants smuggled National Tra- tions of the goods that become public so therefore state. ffic Service Migration or the special Fund for Victims The Judicial Code to amend Article 2316, literally specifies of Organized Crime in the Attorney General’s Office. in which cases it is possible intervention jury of conscience and exempts a number of serious crimes, which helps to In the event that the case of movable or immovable pro- judge the cause when known as how to judge serious those perty the maintenance onerous for the State, the Mi- subject to a criminal case, according to crime in question. nistry of Economy and Finance is who can give them in provisional administration or custody, without mo- But we can’t ignore a reality that we live every day, first Panama difying the Public Ministry was empowered to do so. is one of the countries that make more laws and more changes and reforms made to their codes. However it is clear that Regarding acts with Rear Control Research the expected effect on these modifications rotates counter. Judge of Guarantees in the accusatory pe- In the particular case of Gangs of crime, has had a pernicious nal system was changed the following article: effect on society and pro composing these criminal groups In Article 317, paragraph for case of acts of investigation who have spread across the length and breadth of our Republic. or proceedings relating to offense of organized crime was included governed exceptional period of sixty days. Years ago travel anywhere within the country, represented a form of distraction, relaxation, to get away from Changing the Judicial Code the routine, bustling and pollution of the capital city. Article 2316 of the Judicial Code was amended in pa- Now be careful that we visit places, because wave of vioragraph 1, adding that they will be judged by jury of lence, insecurity and also evil gangs have moved to placonscience in the specific case of culpable homicide in ces that was previously unthinkable that could germinate. the case of own terrorist activities, kidnapping, extortion, murder for hire, conspiracy, racketeering, members All this shows is that the laws, operators, institutions created or gang members, drug trafficking or money launde- to fight crime, have fallen short in the prevention and suppresring or the fact has arisen with other criminal behaviors. sion of trafficking. That in my opinion is one of the most damaging in a society, precisely because of the way they operate. The subsequent four numerals are with the same wording. Amendment to Act 79 of 2011 concerning The recruitments from an early age, children and adolescents 21. Legislación y Economía - Enero 2014
who drop out of classrooms and are used to commit the most heinous crimes, is just a sample of society in which we live. There’s a widespread belief that “children don’t pay” and if we leave the statistics, we see that the anti-gang law, to be effective, when ridiculous numbers of convictions compared to the number of files that are processed by this crime. Adding to the ineffectiveness of the laws, another element that affects fight against crime is the unwillingness of successive governments, not to allocate sufficient auxiliary institutions of justice funds. We see a Institute of Legal Medicine, preparing for the entry into force of accusatory penal system, where you will play a key role, requesting budget appoint experts, training and lack of infrastructure. As we intend that the administration of justice meets excellence rightful role when you have to work with crumbs because governments consider that the administration of justice doesn’t add votes. We can conclude that it is easy to create laws, it is difficult to implement them and that they are effective to fulfill the purpose for which they were created. L&E
22. Legislación y Economía - Enero 2014
NEW MARITIME BOUNDARY BETWEEN PERU AND CHILE
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Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
he January 16, 2008, Peru presented before the International Court of Justice (ICJ) demand that focused on the representation of a maritime area which was operated by Chile, as well as another area to which Chile considered that belonged to Peru but the sea, because of the higher latitude and the parallel that marked maritime border. In addition to this, Peru believed that the border had not yet been defined at sea, and what I thought as neighboring Chile treaties themselves were only the defined fisheries agreements and therefore ask the Court 1. «The demarcation between the respective maritime zones of the Republic of Peru and the Republic of Chile is a line beginning at the ‘ Point Concordia ‘ (defined as the intersection with the low water mark of an arc of 10 kilometers, which has central axis the first bridge over the river Lluta of the AricaLa Paz railroad) and is equidistant from the straight baselines of the two parties, to a point located at a distance of 200 nautical miles from these baselines.» 2. «Beyond the point where the common maritime boundary ends, Peru has the right to exercise exclusive sovereign rights over the adjoining sea area up to a distance of 200 nautical miles from their lines straight bases. “In Peru, usually called the defined area on the second point as” outer triangle».
le defeated Bolivia-Peru coalition and obtained vast territories which had hitherto belonged to these two nations, as the Bolivian province including Antofagasta lost out to sea by La Paz and Peruvian Tarapacá. The maritime dispute between Peru and Chile, was settled by International Court of Justice in a judgment of 27 January 2014, which was read by presiding judge Peter Tomka who gave an account of the dispute and its central part said: 1. “By 15 votes to 1, the court decided that the starting point of the maritime boundary is the intersection of the parallel of latitude passing through the Milestone Nº 1 with the low tide line.” 2. “By 15 votes to 1 decides that the initial segment of the single maritime boundary continues west along the parallel of latitude passing through the landmark Nº 1.” 3. “By 10 votes to 6 decides that the initial segment extending to a point A located at a distance of 80 nautical miles from the starting point of the maritime boundary.”
4. “By 10 votes to 6 decides that from point A maritime boundary continues in a southwesterly direction along the equidistance line between the coasts of Peru and Chile republics calculated from that point to its intersection at Meanwhile Chile, based his defense on the Santia- point B , with the limit of 200 nautical miles...” go Declaration of 1952 and the agreement on maritime border Special Area of 1954, said the two state- 5. The court declared itself incompetent in the Peruvian ments they agreed on a maritime delimitation begins request regarding the application to review the internaon the coast and continues throughout the geogra- tional sea outer triangle. “It’s appropriate that the Court phical parallel that passes through milestone Nº 1. concerns”, argued. In this regard, it should be mentioned that there is a traditional rivalry between the two countries, which has In other words, boundary between the two counits genesis in the Pacific War of 1879-83, in which Chi- tries is established from Milestone 1, from the23. Legislación y Economía - Enero 2014
re, the parallel is still up to 80 miles and then the border is bounded by a line equidistant to 200 miles. The ICJ recognized Peru about 50,000 square miles of water in the Pacific Ocean, of which 21,000 km2 belong to the triangle as claimed by Chile’s exclusive economic zone. In this regard, it is important to ploitation of marine resources, The fishing area was at issue ce for both countries, and that
note that what was at stake with the and not sovereignty, since it is is one of the richest in the world there fishing for a wide species used
ruling were the rights of exrecognized until 12 miles. and of particular importanto make fish meal is done.
Ollanta Humala, president of Peru considered the judgment of Court of The Hague on the maritime dispute with Chile was recognized more than 70% of the Peruvian demand, which won about 50 thousand kilometers of maritime sovereignty. For his part, President of Chile, Sebastián Piñera, said his country will comply with the ruling of the International Court of Justice in The Hague “gradually”. He argued that the implementation of the judgment will require agreements between his country and Peru, and that “the Court has confirmed the arguments of the Chilean position” and appreciated that Chile retains almost all of their fishing rights, especially those who practice small boats and craft. “ For many, the fault isn’t entirely favored neither party, since the same arguments of the parties recognize, the fact that at least in theory is solved maritime problem raised many years ago, however, begins perhaps the most difficult stage and the implementation by Peru and Chile’s decision International Court of Justice as indicating “a judgment of this Court is binding on the States concerned”, is, are final and conclusive. L&E
24. Legislación y Economía - Enero 2014
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Electricity Market Forum 2014
n recent years, there have been limitations of this vitiated the Panamanian energy sector and in turn, have been proposed and adopted policies and strategies to improve production of electricity in the country.
Maybé Mendieta - Abogada maybe.mendieta@rbc.com.pa
Similarly, it is necessary to emphasize some aspects of the market, generation and transmission of electric energy that were highlighted by exhibitors during the development of the Forum, namely: In this sense, starting with the electricity market, In this regard, both the private sector and state ener- allowed clearly stated that for a state to be taken into gy have been proposed to diversify primary sour- consideration that company makes the investment ces of this resource. Some have also raised from hy- in this sector should have a free market competition, droelectric sources, natural gas and coal, as well with a clear energy policy that involves laws and ruas the development of renewable sources (wind). les stable. It is also necessary to have experienced developers and operators that can cope with the projects. However, with respect to wind renewable source, according to experts, it is clear that Panama doesn’t register a Moreover, it was noted that currently the thermal power regular wind pattern whereby the ability of continuous generation is doing this more and more, even in the rapower generation is limited, so the sector has targeted for iny season in the country, to meet energy demand under strengthening of transmission and distribution nation- declining flow of water resources are there in Panama. wide, allowing generators offer their product to market. In the same vein, ETESA reported the progress of the This time we want to highlight the Financial Initiati- Project III transmission line, Island Telfers-Panama, ve of the media, who in conjunction with the Natio- which was tendered on August 19, 2013 and whose nal Authority of Public Services (ASEP) organized contract is awaiting the endorsement of the Comptrothe Forum 2014 Electricity Market: Market Overview, ller General of the Republic since December 11, 2013. Changes and Actions to Fuel Demand, which took The same is scheduled to go into effect in late 2016. place on January 29, 2014 at a hotel in the town. Currently, the Company is in negotiations with affected easements for the purpose of expediting the start This event was attended by representatives of va- of the project which will have 500 MW capacity and rious companies engaged in the business of genera- will be operated by the company LGN Group Panama. tion and transmission of electricity in both the public and private sector. Exhibitors GMs Pedregal Power, Finally, the National Energy Secretariat said that in 2013 ETESA, AES, GDF Suez LNG Group Panama, as well the Law No. DE12 69 October 2012, “which establishes were engineer Vicente Prescott as Energy Secretary. the general guidelines of the national policy for the rational and efficient use of energy in the country” is reIn this regard, we allow ourselves to share with our readers gulated by Executive Decree No. 398 of June 19, 2013. on agenda of the Forum: Why do or not to invest in the electricity market, Project Status of the Second and Third As for the main question that generated the Forum, will Online Pass, Importance of diversification of the energy there be blackouts in 2014?, The Secretary of Energy, enmatrix? analysis of Electricity Industry in Panama, Strate- gineer Vicente Prescott, said that this year the entity begies and State Policies to ensure the supply of Electricity lieves that you should not repeat the situations blackouts in Panama, Project cryogenic storage, and regasification of generated in the 2013, since it has worked and strengnatural gas combined cycle generation in Colon, Panama. thened in the following policies: energy conservation 25. Legislación y Economía - Enero 2014
and proper use of water. In addition, the Secretariat has supported in part by installing thermal plant would generate up to 140 MW for the month of March this year. This means then, that shouldn’t be blackouts, provided they can maintain the measures outlined by the Secretariat. Note that state entities represented in this event pledged to continue the policy of strengthening the transmission and distribution nationwide in order to maintain the competitiveness of this sector in the market. L&E
26. Legislación y Economía - Enero 2014
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WHAT IS EXPECTED OF ELECTORAL TRIBUNAL?
ith only a few months for holding the general elections of May 4 this year, spontaneously emerge a wide range of speculation about what will be the behavior of the members of the Electoral Tribunal to such important democratic front party for Panamanians. Every democratic state, as is the Republic of Panama, should ensure the participation of citizens in free elections to select their representatives. The Electoral Tribunal’s main function is the regulation and organization of the elections, ie elections, referendums and other activities referendum, in which voters express a preference for a particular political party or candidate through their vote.
Rafaél Fernández Lara rbcweb@rbc.com.pa
donment of the campaign by opposition candidates, in the absence an environment that would guarantee suffrage, freedom of assembly, freedom of the press and guarantees of individual liberty. Is also the unprecedented case of a decision of the national board of elections to recognize the most votes for a presidential candidate, a year and two months later, the same electoral body did a recount of the votes in the same election and very quickly declared the winner losing candidate; magistrates obvious trends support a certain candidate; presidential hopefuls turning to the United States to oversee elections to rigged elections in tournaments with complicity of members of the electoral Tribunal results ensure the purity of the vote in the absence of electoral guarantees, false victories of presidential candidates supported by the decision of judges complicit in them.
Initially, the Electoral Tribunal was termed “Electoral Council of the Republic” in 1916 “JNE” is called and since 1956 has with current name, “Electoral Tribunal”. With this sad panorama background is fair to say that from 1990 to date our highest electoral authority, except Being close to general elections in Panama becomes rou- for some minor irregularities, has respected the will of the tine recall whether judges and officials of this entity were people to elect their true representatives, which is critipreviously enrolled in a political party, friendships, family cal to strengthening our democratic system government. ties, expressions in public, and even romances. In political gatherings imagination fly and speculates on electoral Just as democracy is consolidated with the political discusfraud, hiring foreign nationals and experienced in these sion of national issues to help voters with a more real than harmful activities and, of course, cancel the elections for good for the country before exercising vote, the country also legal reasons or otherwise, adding spontaneous eruption of knowledge required of electoral institution in charge of orvolcanoes, such as political passion and dirty campaigns. ganizing elections, diaphanous and respectful in the exercise of their sacred and patriotic duty positions, independently This unfortunate and harsh reality is due to the many sha- and without leaning in favor of any of the warring factions. meful cases we had during our elections history, pointing to the so-called “paquetazos” de Veraguas; replacements of The actions, omissions and declarations of the judmembers of the National Elections by other pro-govern- ges are under observation with a magnifying glass and ment candidate or to defend the opposition candidate; si- uninterrupted people who appreciated that the Electomultaneous recognition of two elected presidents by two ral Tribunal assume his undying and unwavering misjuries of national elections, one that supported the oppo- sion to enforce the voice of the majority on May 4. sition candidate and the other to the government; aban27. Legislación y Economía - Enero 2014
Any questionable attitude or weakness in fulfilling their patriotic duty to be a step backwards, shame and blot on the democratic system of government and for future generations of Panamanians, who without hesitation will be the judges of our history and the behavior of its protagonists. L&E
28. Legislaci贸n y Econom铆a - Enero 2014
COMMENT ON CONSUMER PRICE INDEX NACIONAL URBANO: DECEMBER 2013 AND ANNUAL AVERAGE
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he Consumer Price Index (CPI) in December compared with November a monthly variation of 0.3 percent for both the National Urban to the districts of Panama and San Miguelito and Urban Rest 3.8 percent in the districts of Panama and San Miguelito and 3.5 percent in the Urban Rest; Compared with December 2012, an increase of 3.7 percent in the National Urban was observed. At the end of 2013, the National Urban CPI recorded a cumulative increase of 3.7 percent, and percentage changes (2013/2012) was set at 4.0 percent. The divisions reflect increases in the Consumer Price Index Urban December, referring to November 2013, were as follows: Recreation, entertainment and cultural services 0.5 percent, due to an increase in the price of board games, food and beverage , Miscellaneous goods and services, both with 0.3 percent, increase in the price of alcoholic beverages and
29. Legislación y Economía - Enero 2014
Source: CGRP Contraloría General de la República jewelry and clock respectively, Clothing and footwear, housing, water, electricity and gas, health and transport, each 0.2 percent, increase in price of footwear for men, rental fees, medical services and non-hospital paramedics and gasoline, in the correct order, furniture, household equipment and routine maintenance of the house of 0.1 percent, increase in price of electric bulbs. Teaching, remained unchanged. Comparing the National Urban CPI in December 2013, the same period of 2012, showed an increase in the following divisions: Teaching 5.3 percent, Food and Beverages and Health, both 4.6 percent; Housing, water, electricity and gas 3.4 percent; Miscellaneous goods and services 3.2 percent, Clothing and footwear and furniture, household equipment and routine maintenance of the house, both 3.1 percent; Recreation, entertainment and cultural services 2.9 percent and 2.1 percent Transportation. L&E
PANAMANIAN ECONOMY IS STRENGTHENED
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JANUARY-SEPTEMBER 2013 INDICATORS QUARTERLY PRESENTS POSITIVE CHANGES
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anama’s economy continues positive growth uarterly Indicators of Employee Persoin different sectors move to the country, as nal, Paid Earnings and Total Income shown by the indicators of the National Instiin the Republic, from January to Septtute of Statistics and Census of the Comptroller ember 2013, compared to the previous General’s Office, which informed the media year, reflected positive changes in the through breakfast, Competitiveness Secretastudy variables of economic activities riat of the Presidency of the Republic and Economic Affairs. of Manufacturing Industries and Retail Minor. However, decreased personnel employed in Other Services. Project Coordinator of the Ministry of Economic Affairs and Competitiveness, announced that the GDP (Gross The manufacturing industry grew 1.1% in the averaDomestic Product) in Panama grew 8.9% in the third ge Personal Employee (in the districts of Panama and quarter of 2013, achieving 8.0% from January to Sep- San Miguelito Increase Most of this occurred). Wages tember 2013, likewise, Foreign Direct Investment in Paid by This industry registered a growth of B/. 32.8 2000 was 962 million balboas, until the third quarter of Which dealer to a rate of change of 7.9%. Total Revenues 2013, when in 2012, 2000 was 887.4 million of Dollars. Showed an Increase of 2.3% over the same period of 2012. The Monthly Index of Economic Activity (MIEA) improved In the Wholesale Trade and Retail 5.6 and 3.2%, respecti8.26% in October 2013 with a cumulative growth from January vely (districts of Panama and San Miguelito exhibit greater to October of 7.79%, higher than the same period in 2012. dynamism). The Paid wages registered a growth of B/. 21.1 million, representing a positive change of 7.2%, while in the The tourism area recorded 188,000 visitors in Novem- Retail Trade Wages Paid in additional payments were made ber 2013, which resulted in 0.9% growth in that sec- B/. 53.9 million, which represents a rate growth of 9.7%. Totor. Meanwhile, the country received in respect of fo- tal Income of retail trade in the Republic increased by 6.3%. reign exchange visitors, some 270.8 million of Dollars only in November 2013, while the period January to The business of hotels and restaurants showed a slight November last year was 3052.9 million dollars, an in- growth of 0.4% (the districts of Panama and San Miguelito crease of 8.4%, compared to the same period of 2012. grew 1.6% and rest of the country fell by 5.3%). Remuneration Paid by this sector registered a growth of B/. 8.1 miVisitors staying in Panama is estimated at 9.3 days each, llion, ie 4.9% and Total Revenues increased 3.2% showed. with average daily expenditure of 168 Balboas. L&E Staff Employee Performance in Other Services showed negative trend 3.1%. Salaries paid in lower payments, representing a negative variation of 0.2%, mainly due to a fall B/.1.5 Fuente: Alerta de Noticias Tributarias million in the districts of Panama and San Miguelito, which means a drop of 0.4% took place. The Rest of the country registered growth of 4.2%. Total revenues increased by 4.9%. Indicators are made with monthly information from Quarterly Survey of Employment, Sales and Production which currently has a coverage of 1,163 companies and is conducted by the Census Bureau of the National Institute of Statistics and Census (INEC). L&E Fuente: CGRP
30. Legislación y Economía - Enero 2014
WAITING IS KEPT THE WORKS DE PANAMA CANAL EXPANSION
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Karen Fábrega - Abogada karen.fabrega@rbc.com.pa
n the midst of a major dispute is the major source of income for our country, The Panama Canal, which is undergoing a process of expansion, with the construction of the third set of locks for the purpose of doubling the channel capacity including the expansion of existing locks, allowing traffic to allow a greater number of ships and even larger.
After last meeting between parties, has been negotiating posture, resulting in a proposal for provisional negotiation protocol and a new co-financing plan, in which Grupo Unidos por el Canal, must acquire a debt 600 million to 500 million ZURICH insurance and the Panama Canal Authority (from its reserve fund, guarantees for breach of contract, etc.) negotiations will continue until February 1.
The consortium Grupo Unidos por el Canal (GUPC), to perform this mega work led by the Spanish company Sacyr, whose beginnings in 1986 was incorporated as a Limited Company Roads and Irrigation, part of the consortium companies Impregilo (Italy), Jan De Nul (Belgium) and the Panamanian Constructora Urbana, SA (CUSA), contracted with the Panama Canal Authority (ACP) building work for an initial cost of 3,200 million dollars, and so far has paid 5.250 billion.
It’s worth noting that under the contract are clearly established mechanisms for resolving disputes that arise during the execution of the contract, which is why the ACP rejects claims by the contractor, under the consortium tries to process their claims outside the agreed conditions.
Throughout the execution of the work, the construction company has filed several claims in respect of cost overruns in 2012 by 588 million, caused by repeated rejections by the technicians of the ACP mix cement for use in casting Canal new locks, which complaint wasn’t accepted by the ACP and even conflict are aired in arbitration. Currently on a new claim dispute to the Panama Canal Authority, an estimated 1,600 million dollars in cost overruns, which are duly documented by GUPC and examined by independent auditors whose point of dispute is who gets to pay for those extra costs generated in the expansion project, the contractor (GUPC) or (ACP) customer, initially producing the suspension of work from January 20, 2014, if the parties did not reach a consensus. However, throughout this dispute, haven’t suspended the work, but has greatly reduced activity within the work and has set a new notice of suspension of work from January 31, 2014.
31. Legislación y Economía - Enero 2014
The contract signed between the ACP and GUPC in February 2009 , provides that any dispute with representatives of Grupo Unidos por el Canal, are required to meet the following procedure (i) submit to the ACP your claim properly supported and documented so that in this instance claimed a decision on what, if not accept, is passed to the second phase, (ii) request the Dispute Board to resolve the dispute pursuant to the agreement is issued in the contract. In this contract a Dispute Adjudication Board, Dispute Resolution Board, whose members have the power to issue decisions binding on the parties therefore must be delivered immediately and in breach of the decision was established by the Dispute Resolution Board, the party can initiate arbitration proceedings for breach of the order. Similarly, the affected part with the decision of the Dispute Adjudication Board, within the prescribed period, can express their disagreement with the decision and may approach the way of arbitration. (iii) Friendly Arrangement, provided a notice of disagreement with the decision of the Board of Conflict Resolution, will try to reach a settlement amicably before initiating arbitration, if not, start the fourth stage (iv) the subject to the rules of the International Chamber of Commerce (known by its acronym as ICC rules), in addition to the rules of the
IBA (International Bar Association) in regards to obtaining arbitration evidence in international arbitration, and shall be settled by three arbitrators who will decide on the right, within the meaning of the Panamanian law. The seat of the Arbitral Tribunal in Miami Florida will be governed by the Federal Arbitration Act of the United States. So far, the Panama Canal expansion is an increase of 70% and is expected to allow boats to pass by the new extended channel late 2015. Unfortunately, not reach an agreement as soon as possible, the work may not finish on time, causing serious damage not only to the parties but also to the Panamanians, because the Panama Canal is our main source of income, including all who have invested heavily counting on the Panama Canal expansion would be done. No the tant The
doubt in the ability of the Canal Administrator Jorge Quijano, in assuming the completion of work, with its own contractors and subcontractors, as well as the administration of this imporindustry is under Panamanian hands, just as the culmination of the work may be in our own hands. purpose is to defend our Canal with dignity and not allow outsiders belittle or make fun of our ability. L&E
32. Legislaci贸n y Econom铆a - Enero 2014
INCOME TAX INCREASE IN LATIN AMERICA, BUT ARE STILL LOW AND VARY FROM COUNTRY Argentina and Brazil have higher incomes as a share of GDP, while Guatemala and Dominican Republic have the lowest Source: Revenue Statistics in Latin America 1990-2012 (OECD-ECLAC-CIAT)
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ax revenues continue to rise in Latin America but remain low relative to national income compared to most OECD countries, the statement Revenue Statistics in Latin America 19902012, presented today Santiago de Chile.
The average income tax rate of the 18 countries covered by the report [1] increased steadily from 18.9% in 2009 to 20.7% in 2012, after falling from a peak of 19.5% in 2008, indicates the publication produced by the Organization for Economic Cooperation and Development (OECD), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter-American Center of Tax Administrations (CIAT). The report, released today under the XXVI Regional Seminar on Fiscal Policy to be held in ECLAC, shows that the tax rate as a share of GDP increased significantly in the region in the past two decades, from 13.9% of GDP in 1990 to 20.7% in 2012. However, this rate is still 14 percentage points below the average of OECD countries (34.6%). There are wide differences between national tax revenue rates in Latin American countries. The list is headed by Argentina (37.3%) and Brazil (36.3%), which are above the OECD average, while at the end Guatemala (12.3%) and Dominican Republic are located (13 , 5%). Among OECD countries, the same range varies between 48.0% and 19.6% in Denmark [2] in Mexico. Tax revenues of local governments in Latin America is low in most countries has not increased due to the small range of taxes that are competent in contrast to OECD countries. 33. Legislación y Economía - Enero 2014
The report includes a special chapter on the trends of revenue from non-renewable natural resources in Latin American countries are exposed. The global demand for commodities, especially in large emerging markets, has led to a sharp rise in prices and increased tax revenues associated with non-renewable natural resources. These revenues increased at a faster rate than other government income before the crisis and its behavior was at least three times more volatile than the growth in taxes as a share of GDP since 2000. In several Latin American countries tax revenues from non-renewable natural resources are still very important as a percentage of total revenues, representing more than 30% of the total in Bolivia, Ecuador, Mexico and Venezuela. This implies greater benefits from revenue they generate, as well as a higher level of risk due to global market dynamics. Key results: Tax revenue as a percentage of GDP • In 2012 , the rate of tax revenue to GDP rose compared to 2011 in 13 of the 18 countries in Latin America and the Caribbean analyzed fell into four (Chile, Guatemala, Mexico and Uruguay ) and one remained unchanged (Costa Rica ). • The difference between the average rate of tax revenue to GDP in the OECD and that for the 18 countries of Latin America and the Caribbean was reduced from 19 to 14 percentage points between 1990 and 2012. • In 2012, the largest increases in the rates of tax revenue to GDP accounted for Argentina (2.6 percent), Ecuador (2.3 percentage points) and Bolivia (1.8).
• The largest declines occurred in Uruguay (1.0 percentage points) and Chile (0.4 percentage points). • In the period 2007-2012, 11 countries recorded increases. The largest was in Argentina (8 percentage points), followed by Ecuador (7 points) and Paraguay (4 points). 7 other countries showed declines, led by Venezuela and the Dominican Republic (3 percentage points each) . Tax structures • After strong growth in the last twenty years, general consumption taxes (mainly VAT and sales tax) accounted for 33.8% of tax revenues in the countries of Latin America and the Caribbean in 2011, compared 20.3% of OECD countries, while the weight of the specific consumption taxes (such as excise taxes or taxes on international trade) has been reduced to 17.7% (in the OECD is 10.7%). • In Latin American countries, taxes on income and profits in 2011 represented on average 25.4% of revenue, while contributions to social security accounted for 16.9% (OECD said percentages are 33 , 5% and 26.2%, respectively). Total tax revenue as a percentage of GDP, 2011. L&E
34. Legislación y Economía - Enero 2014
STATISTICAL YEARBOOK OF ECLAC PANORAMA PROVIDES SOCIAL, ECONOMIC AND ENVIRONMENTAL EFFECTS OF LATIN AMERICA AND THE CARIBBEAN
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he Economic Commission for Latin America and the Caribbean (ECLAC) today released the Statistical Yearbook for Latin America and the Caribbean, 2013, available on the Internet, wherein the series of indicators relating to social, economic and environmental development are updated countries in the region. This annual publication, one of the Most Important of the regional body of the United Nations, is a reference for Those Who wish To Have comparable statistics over time and country clubs Between.
Fuente: Pág. CEPAL se, 1,340 the same year obtained, representing an increase of 17% compared to those issued in the previous year. Finally, the Yearbook devotes a chapter to record methodological aspects concerning data sources, definitions and coverage. The full document in PDF and Excel tables in the Statistical Yearbook for Latin America and the Caribbean, 2013 are available on the ECLAC website.
You can find more statistics on Latin America and the Caribbean in the CEPALSTAT website, which includes a set of thematic databases that are updated regularly and covering Most of the information comes directly from na- different topics (social, national accounts, environmental, tional statistical offices, central banks, internatio- gender, productive activities and foreign trade, etc.). L&E nal organizations and other official institutions, so ECLAC invites users to pay attention to the sources and technical notes are presented in this paper. Like previous editions, the Yearbook is organized into four chapters. In the first demographic and social aspects, which include indicators of population, employment, gender, education and health are discussed. For example, in this area indicates that poverty is mainly affecting the rural sector and the poverty is four times higher in rural areas than urban. The second chapter provides economic statistics, presenting information of price indices, international trade, balance of payments and national accounts. This section indicates for example that the annual regional GDP growth for 2013 is estimated at 2.6%, as announced in the Preliminary Overview of the Economies of Latin America and the Caribbean 2013, released in December. Then the paper presents information concerning the environment and natural resources, organized into topics such as biota, water, forests, energy and environmental management. This section stands out among other data at the end of 2012 a total of 9,271 companies had ISO 14001 certification, which is requested on a voluntary basis and forces companies to create an environmental management plan. Of the35. Legislación y Economía - Enero 2014
GLOBAL GROWTH ON THE RISE, BUT RISKS REMAIN, IMF PREDICTS THE REPORT IMF Source: International Monetary Fund Thomas Helbling IMF Research Department
• The IMF projected that global growth will be 3.7% in 2014 and rise to 3.9% in 2015. • The return to growth will be stronger in the advanced economies, the increase in external demand will benefit emerging markets. • The downside risks to global growth include a low level of inflation in advanced economies. Global growth will increase in 2014 after being stuck in a slow march in 2013, according to forecasts from the last update of the IMF WEO report. According to IMF projections, global growth will average 3.7% in 2014, compared to 3% in 2013 - and will increase to 3.9% in 2015. The activity and world trade rebounded in the second half of 2013, as envisaged in the October 2013 edition of the World Economic Outlook (WEO). In advanced economies, final demand has increased, broadly as expected. In emerging markets, activity accelerated mainly due to the recovery of exports, domestic demand, meanwhile, remained moderate overall, with the exception of China. In the WEO Update report is expected to continue strengthening of activity in 2014 and that global growth will move from 3% in 2013 3.7% in 2014 and 3.9% in 2015. L&E
36. Legislación y Economía - Enero 2014
Globally
tion which particularly affect investment . Consequently, growth in 2013 or 2014 has been revised downwards comThe overall picture is characterized by the strengthening of pared to WEO October 2013, for example, Brazil and Russia. the activity. But the WEO Update report also points to impor- The downward revisions of growth in Middle East tant differences between the major economies and regions. and North Africa in 2014 mostly reflects the expectaUnited States growth will be 2.8% in 2014, compared to tion that the recovery of Libya’s oil production will oc1.9% in 2013, according to forecasts. This rise is partly a re- cur at a slower pace after outages suffered in 2013. sult of a reduction in the tax burden due to the recent budget agreement. But the budget deal also means that most of Risks remain low the cuts as part of sequestration spending would continue in 2015, instead of being terminated as assumed in the Oc- In the WEO Update report states that the balance of risks is tober 2013 WEO report. For that reason it is now projected changing very slowly. The major downside risks surrounding that growth in 2015 will barely exceed the level of 2014. the outlook for global growth remain a source of concern. The euro zone is moving from recession to recovery. Growth is projected to increase to 1% in 2014 and 1.4% in 2015. In general, the recovery will be more moderate in European countries that have been under financial stress to a greater or lesser degree (Greece, Spain, Cyprus, Italy and Portugal), where the increase in exports would help to stimulate growth in while the high level of debt-both public and private, and financial fragmentation will slow domestic demand.
The report refers to the risks already discussed in the October 2013 report but highlights new risks for economic activity that poses a very low inflation in advanced economies, especially the euro area. Inflation is expected to remain below target for some time. If inflationary expectations population decreased accordingly, actual inflation could be even lower than expected. That would increase the real burden of debt and would raise real interest rates, hurting growth. At the same time, there would be a greater likelihood of deflation in the event of adverse shocks activity.
It now expects growth in Japan will slow in 2014-15, after rising strongly in 2013. The cooling will be more gradual than expected, and the new fiscal stimulus passing charac- In emerging market economies -the update report states ter partly neutralize the effect of ballast demand will suffer WEO-, exacerbation of volatility in financial markets and because of the tax increase on consumption of early 2014. capital flows remains a concern, since the Federal Reserve of the United States announced in December 2013 that will It is projected that growth in emerging economies and de- begin to gradually withdraw monetary stimulus in early veloping markets will increase to 5.1% in 2014 and 5.4% in 2014. The reaction to the announcement has been relatively 2015. China’s growth rebounded strongly in the second half calm in most economies. However, the combination of portof 2013, largely due to the acceleration of investment. It is folio restructuring and internal weaknesses could lead to projected that this increase will be temporary, partly due to policy measures to cool credit growth and capital expensive. capital outflows and rate adjustments more marked change. It is expected therefore that growth will moderate slightly and will be around 7 ½% in 2014-15. In India, growth was Policy Recommendations revived after a favorable monsoon season and a more marked increase of exports, is expected to continue rising due Therefore, strengthening of global growth doesn’t mean to structural policies that support investment strengthened. that the world economy is completely safe. In the WEO Update report emphasizes that the priority policies of all Many other emerging market and developing countries have countries is to achieve strong growth and control vulnebegun to benefit from the strengthening of external demand rabilities, and the following recommendations are made: from advanced economies and China. In many, however, domestic demand has remained weaker than expected. This reflects a greater or lesser extent, the tightening of financial conditions and policy direction from mid-2013, as well as uncertainty about policies and policy bottlenecks or situa37. Legislación y Economía - Enero 2014
Advanced economies -including United States- not economies must respond to increased growth prospects by undertaking a premature withdrawal of policy accommodation. That remains the proper orientation, as out-
put gaps are even wider while inflation is low, and fiscal consolidation will continue. In the Update warns against underestimating the need for stronger growth, as even a greater balance sheet repair is needed after the crisis. In the euro zone, the European Central Bank will consider additional measures in this regard. Will be essential to clean up bank balance sheets conducting program evaluation thereof and recapitalize weak banks and banking union conclude unifying supervision and crisis resolution in order to build confidence, revive credit and break the link between sovereigns and banks. Further structural reforms to promote investment and improve the prospects are needed. The emerging market economies and developing countries, for their part, must closely monitor the risk of sudden changes in the direction of capital flows occur. Among the economies that seem to be particularly at risk are those that record deficit of the external current account in part due to internal weaknesses. Is necessary to allow the exchange rate depreciation against the deterioration of external financing conditions. In China, the recent rebound underscores the fact that the investment remains the main driver of the growth dynamics and more necessary rebalancing of domestic demand, redirecting investment to consumption. L&E
38. Legislaci贸n y Econom铆a - Enero 2014
O
THE PARTISAN POLITICS IS INCONSISTENT WITH SPORT
n Friday 24 January saw with amazement as we walk today in values and moral strength to face the situations involved and we don’t see that as images are transmitted to society. In a separate tournament the summer as baseball serving wholesome entertainment to the Panamanian family and relief from the daily pressures and that somehow binds the provinces stoking the rivalry between each, an incident occurred in appearance own tournament but that reflects how a person in a given time can damage a whole group of society. We refer particularly to the incident in the city of Chitre during the celebration of a baseball game between teams of Herrera and Los Santos, famous classic of Azuero, which is part of the regular schedule of the first phase of the Youth League Baseball 2014. In game development measure by the Fire authorities and SINAPROC not allow the entry of more public view they had exhausted the available space to accommodate more people in Rico Cedeño stadium is implemented and the closure is ordered of access doors. It’s at this point that the current president of the provincial league of Los Santos and Deputy of the Republic Carlos Tito Afú, up to the fourth inning, who claims that he should be allowed entry to the stadium along with is presented to the stadium entourage accompanying persons. Controversy given the existence of an order not to allow entry to more people to the stadium then arises. In an angry way the character in question claims he has the right to enter and hoopla so attracts the attention of the television media, radio and print media coverage they were giving to the game, so that transmission occurs in vivo as it develops, while Mr. Afú still claim expedited access to the stadium. According to reliable sources it’s reported that Mr Afú entry is allowed him as president of the Provincial League of Los Santos but he refuses to accept this measure because it believes that should go along with the amount of people that accompany him.
39. Legislación y Economía - Enero 2014
Giovana Miranda - Abogada giovana.miranda@rbc.com.pa
This controversy makes the chairman according to the League of Los Santos made the decision to order the team manager of Los Santos not to go out to play and remove team from the stadium to protest the situation that is happening, what the sports leader complies fully and the game is stopped. The referees make calls to the field and not having the presence of the players enact one forfeit, giving the home of Herrera team the victory, which until now was in charge of the incident with a career advantage. The attitude of the Lord in reference trim when Dante´s takes on live television expresses his anger with words and really out of all sporting context requires having the right hand voices and challenges being imposed disciplinary measures deemed appropriate. This reflects the degree of disregard of certain political figures in paper sports leaders who have previously had the opportunity to meet the fans and remembers when personal interest in the participation of athletes in various national and international sports events are affected. As president of the league, Afú leader has every right to complain and demand that he address their rights and could do so in the plaza outside the stadium and mount a political show in order to enforce their status as political and mass sports leader but what is it never forgives order removing team from the game where his team was participating without good cause existed to justify the decision. This attitude of contempt for the collective and the fans of Los Santos he hoped his team soar upward the score and the win shows that this man puts the personal to the interests of the majority interest and unfortunately confirms what many think will take that used mass sport for politicians, public positions and prevend personal privileges. L&E
Activities and celebrations of the month of January: Donation Rivera, Bolívar and Castañedas:
Mariela de Sanjur mariela.sanjur@rbc.com.pa
On Saturday January 11, donating the Firm and its partners held each year to low-income families was performed. This year it was held in the province of Cocle in the Parish of St. Pancracio in the company of the Church of Our Lady of La Esperanza.
40. Legislación y Economía - Enero 2014
11 Panama Jazz Festival:
Held from 13 to 18 January at the Ateneo in the City of Knowledge, Clayton closing with a free concert held on January Saturday 18 in the Quadrangle of the City of Knowledge.
Let’s paint the 100 years of the Panama Canal: The Panama Saturday, January 18th won the
Guinness Record with 5,084 children painting the mural together “2014: A Century uniting the world”. Event and its founding Olga Sinclair
41. Legislación y Economía - Enero 2014
O
n Saturday 11 January, in an atmosphere of contagious joy among street musicians and tamboritos
Thousand Polleras Parade was held. All present were able to enjoy the beauty and luxury of our costume in a parade in which women of all ages dressed in their best typical Gallic wit.
42. Legislaci贸n y Econom铆a - Enero 2014
43. Legislaci贸n y Econom铆a - Enero 2014
Concert at Coronado Golf & Beach Resort: The National Youth Symphony Concert Association which was filed on January 25
France, Colombia and the Society of Friends of the West Indian Museum Presentations. Children’s musical play Fireworks Display
XXIII El Valle Musical Festival: Chinese pianist Jingjing Wang with the group Chamber Strings XLII Veraguas Fair in Soná from14 to 23 February and Violin was presented on January 25 at 8:00 Monday, February 24: Start School Period pm at St. Joseph Church Valle de Antón, Cocle. Cayucos Race on the Amador Causeway: 25 January Chinese New Year: The January 31, 2014 begins the year 4712 according to the Chinese calendar is the year of the Horse. And celebrate with dinner at the Convention Center Figali and event in El Dorado Mall.
Activities for the month of February: Events: Julio Iglesias Concert: 6 February 5th Festival San Francisco of Mountain from January 31 to February 3 Centennial Festival Panama Canal: organized by the ACP 7, 8 and 9 February 2014 Location: Paseo El Prado and stairs of the Administration Building of the Panama Canal Free Event Friday 7: Time: 7:00 p.m. Show “A Century of Folklore” with the presentation of the main accordionists and singers of Panama accompanied by the Panama Canal Folkloric Ensemble. Fireworks Display Saturday 8: Time: 2:00 p.m. Familiar fair with children’s rides, magicians, clowns Shows Artistic and cultural embassies United States, France, Colombia and the Society of Friends of the West Indian Museum Presentations. Musical performances of DJs, artists and Panamanian groups and an international artist. Fireworks Display Sunday 9: Time: 2:00 p.m. Familiar fair with children’s rides, magicians, clowns Shows Artistic and cultural embassies United States, 44. Legislación y Economía - Enero 2014
NUESTRO EQUIPO SOCIOS José Javier Rivera Irene Itzel Bolívar Cisneros Dayra A. Castañedas L. Javier Said Acuña R. César A. Rivera B.
jj.rivera@rbc.com.pa irene.bolivar@rbc.com.pa dayra.castanedas@rbc.com.pa said.acuna@rbc.com.pa cesar.rivera@rbc.com.pa
ABOGADOS Pedro O. Bolívar C. Giovana del C. Miranda G. Maybe Mendieta G. Augusto C. García Lucila Rivas G. Karen Fábrega
pedro.bolivar@rbc.com.pa giovana.miranda@rbc.com.pa maybe.mendieta@rbc.com.pa augusto.garcia@rbc.com.pa lucila.rivas@rbc.com.pa karen.fabrega@rbc.com.pa
Se prohíbe su reproducción total o parcial sin autorización escrita de Rivera, Bolívar y Castañedas
Alianzas alrededor del Mundo Mitrani, Caballero, Rosso Alba, Francia, Ojam & Ruiz Moreno-ARGENTINA Guevara & Gutiérrez S. C. Servicios Legales- BOLIVIA Machado Associados Advogados e Consultores- BRASIL DSN Consultants Inc- CANADÁ Lewin & Wills Abogados- COLOMBIA Rivera, Bolívar y Castañedas- PANAMÁ Espinosa & Asociados- CHILE Lawnetworker S.A. Asesores Legales- ECUADOR Peter Byrne & Associates- ESTADOS UNIDOS Machado Associados Advogados e Consultores- ESTADOS UNIDOS Ortiz, Sosa, Ysusi y Cía., S.C.- MËXICO Estudio Rubio Leguia Normand & Asociados- PERU Adsuar Muñiz Goyco Seda & Pérez-Ochoa, P.S.C.- PUERTO RICO Pellerano & Herrera- REPÚBLICA DOMINICANA Alvarado & Asociados- NICARAGUA Torres, Plaz & Araujo- VENEZUELA Facio & Cañas- COSTA RICA