Magazine L&E July 2014 by Revista Legislación & Economía

Difficult economic outlook Unconstitutional law Anip, the Stamp Duty and Banking Law Decalogues of new draft bills Porras, Arias, Torrijos leaders of our political history Latin America improved in world cup

ISSN 1726-0485 EDICIĂ&#x201C;N JULIO

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Colaboradores en esta edición José Javier Rivera Rafael Fernández Lara Giovana Miranda Karen Fábrega Yorlenys Gaona Alexander Canto Albin Rodríguez Nadia Chang Mariela de Sanjur

CONSEJO EDITORIAL José Javier Rivera

Giovana del C. Miranda Fotografía - Mariela De Sedas de Sanjur Diseño y Portada: Virginia Medina

Colaboradores en esta edición Augusto García

Legislación y Economía

Ailen Galván

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Rivera, Bolívar y Castañedas,

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CONTENT

Editorial 6. DIFFICULT ECONOMIC OUTLOOK Invited Writer

9. SUPREME COURT DECLARED UNCONSTITUTIONAL ANIP LAW Norms of interest 12. DIGITAL SHEET CHANGE BY SOCIAL SECURITY 13. TRANSPARENCY COMMITTEE ON CONSULAR SYSTEM 14. MINISTER CARLES DISCLAIMS COMPLAINT AGAINST UNIONS Consult, Doctrine and Jurisprudence 15. PUBLIC SERVANTS TO STAY IN POSITION TO THEREFORE BE REPLACED 16. “IMPORTANT ASPECTS OF AFFILIATION AND THE RIGHT OF HAPPEN IN PANAMA LAW”

18. SUPREME COURT OF JUSTICE DECLARES UNCONSTITUTIONAL COLLECTION

OF STAMPTAX IN REQUESTS PRESENTED BEFORE PUBLIC SERVANTS

21. “PLENUM OF SUPREME COURT RULES ON CLAIMS AGAINST

UNCONSTITUTIONAL LAW THAT CREATED THE SUPERINDTENDENCE OF BANKS “

Política 23. PORRAS, ARIAS, TORRIJOS LEADERS OF OUR POLITICAL HISTORY

CONTENIDO 27. Decalogues of new draft bills Panamanian Economy 32. COMMENT ON PRICE INDEX NATIONAL URBAN CONSUMER: JUNE 2014 33. NOMINAL GDP FOR 2014 IS ESTIMATED AT US$ 47.459 MILLION 34. ACP DELIVERY XXXI QUARTERLY PROGRESS REPORT OF EXPANSION 34. ACP SUSTAINSAT THE CABINET THE BUDGET FOR FISCAL YEAR 2014 World Economy 35. WORLD ECONOMIC OUTLOOK SLOW WORLD RECOVERY BUT STRONG NEEDS A STRONG SUPPORT POLICY

37. LATIN AMERICAN PUBLIC SCHOOLS STUDENTS LOSE ONE DAY PER WEEK TRAINING

Educational Capsule 39. NEW GOVERNMENT EDUCATION CHALLENGES IN PANAMÁ Cultural Capsule 41. ACTIVITIES OF MONTHS JULY AND AUGUST Sports Capsule 43. LATIN AMERICA IMPROVED IN WORLD CUP Tips for good dress 45. CURRENT TRENDS DRESS PANTS, CASUAL AND FAMOUS JEANS

DIFFICULT ECONOMIC OUTLOOK

José Javier Rivera - Abogado jjrivera@rbc.com.pa

resident JUAN CARLOS VARELA faces complex and urgent economic problems, some inherited and others emerging. Let’s see:

Another tool has to do with importation of agricultural goods produced in the country, at the time that producers are able to offer them to the market and finally points to the importance of completing so-called cold chains or other formulas that make feasible end consumers to submit to vi1. Food Prices Control. llage markets or provincial, district, in hygienic places, with good presentation and with participation of small business As stated by Dr. Guillermo Chapman in a recent opinion pieowners or producers who offer reasonable prices. The lace published in the newspaper La Prensa, entitled “Towards tter is already possible in the Seafood Market, but not, in final eradication of high prices”: Facing a historic inflation San Felipe Neri market, much less in the Abastos Market. of around 1% per year or less between 2005 and 2013, the consumer price index (CPI) rose to 4.6% annually, and On a recent visit to Brazil, I found in a market insfood and beverages, 6.4% rate at which prices would doutalled in a public square quality products and good ble every 12 years. The social and political pressure to “do presentation, whose samples offer to our readers. something about it,” leading to measures recently adopted The second economic problem that is presented to the to give consumers immediate relief. But long term this can President has to do with the Panama Canal Expansion have significant costs for them and economic development. “ Project, which as we know, has suffered significant delays and cost overruns that have led the parties to a siThat said, it’s clear that the mechanism of price control may tuation close to rupture, which fortunately didn’t ocnot be permanent, since in practice this leads to various cur but it has and will have long-term economic effects. distortions in economy, including the more severe reduction in supply of controlled items and spiral grabbing proThe consortium Grupo Unidos por el Canal, which now leads ducts by consumers in doubt of permanence of the system. the company IMPREGILO Italy, has been pushing the ACP in order to obtain additional funds in exchange for delivery Dr. Chapman judiciously argues that the government should of gates found in Italy in the Company plant CIMOLAI . consider measures to dilute market power of firms with dominant power and should therefore be carefully assessed vertiMuch is publicized on the progress of works, giving the imcally integrated organizations generate efficiency benefits or, pression that may be wrong, that we find an ace of compleby reason of its size, end more expensive products they offer. ting the project; but the wise know well that this is a design and construction project, which involves a novel system 6. Legislación y Economía - Julio 2014

gates, which must be checked ahead of time. In this context it’s likely a delay in the work and if we add events like strikes of workers or other circumstances that affect the completion of agreements between ACP and GUP, it could mean that the implementation this project is further delayed.

Today listen to the Minister of MIDA, Jorge Arango, waiting to manifest an endorsement of the Cabinet Council to receive sufficient funds to initiate support programs, but no rain there is little to do, since both rice and maize need to use water intensively.

Please note that the original project completion date was late this year and now it will be shown in mid-2016, representing time, money and consequently affect the plans of road users, so that responsible, have made significant investments in shipbuilding to use this expansion and make more efficient transit of goods. I don’t perceive a national focus on this important subject, and it seems to have been as a matter of secondary importance and it worries me.

In that vein, it would have to hire a timely procurement of imported products to compensate for the reduced planting of grain and other agricultural products.

The Ministry of Finance should have concluded the analysis, in order to determine impact on public finances of this delay, and particularly because it contrasts with the assumptions made by the ACP at the time it was approved by referendum, this ambitious project .

3. Increase in Electricity Generation.

Also be required to increase production capacity in those areas not affected by the phenomenon of the child to compensate for losses on items that can’t be developed in the aforementioned provinces.

Although we are in July, electricity consumption in the country, is setting records and power generation component is still impacted by use of plants that require fuel.

I think a stronger position of our country is needed, compa- During this five-year period that just ended, we took very red to this Consortium and not see that position right now. costly decisions, since the project of building the transmission line between Colombia and Panama was suspended hydroBut on this subject of income, and a millionaire power projects were suspended, no gas generation project ACP estimated drop in revenue and big ships traffic. materialized and several power plants have suffered mishaps.

2. El Niño.

Our constructive habits and our transformation into a modern city entail the use of electricity in buildings Unlike what the Colombian government is doing, alerting the and premises in the city of Panama, where more enerpublic about consequences of El Niño and the need for urgent gy is consumed in a shopping center than in a province. action, in our country, nothing has been said about effects it will bring to farming activity in Panama, this phenomenon. As if this picture is not enough, subsidy policies to elecProducers of the provinces of Cocle, Herrera, Los Santos, tricity consumption, which benefit all users of the electriDarien and part of Veraguas not have possibility to under- cal system, makes us irresponsible consumption, and it is take their traditional crops during the year 2014 This will very normal to see in public and private offices for peobring ruin to an important sector of Panamanian popula- ple with coats, jackets and other clothing from a temperation and would shred the proposed price control, because te climate; the same behavior is repeated in homes, many if there is no production, because nothing will be to offer. of which have air conditioning at 18 and 20 degrees, while clothing with bedspreads and quilts own Nordic countries. In the city of Panama, where the problem doesn’t arise, appear normal rainfall so far and therefore have But it turns out that subsidy far exceeds $ 400 million, the impression that nothing happens in the country. and is the state that will have to cope with this financial burden unless once and for all cutting that subsidy. However, when you go from CAPIRA on, there are large areas that haven’t seen rain in a month and the time 4. Disorder in Public Finance. to plant the first coa of rice and corn has disappeared and who dared to plant, thinking that weather ac- The previous government was characterized by a disorder commodated, see their plantings of these products and in public finance, particularly by implementing a series of other vegetables and legumes perish through drought. costly and unnecessary, such as the airports of Rio Hato 7. Legislación y Economía - Julio 2014

and Colon, La Cinta Costera Phase III and the acquisition of expensive radars and helicopters. As if that were not enough, also distributed items to deputies, candidates for electoral officials, representatives and third parties totaling hundreds of millions of dollars given to community boards and hundreds of millions administered by the PAN.

A careful observer of integration of banking sector in Panama quickly notice that many participants have lost the international market and we are lowering our profile as an international banking center.

This same situation is affecting use of the Colon Free Zone as a logistics platform, as countries like Venezuela, Colombia These expenditures are forming a heavy burden to load and Ecuador once, main destinations for re-exports have the government and many sources of public revenue to established strong restrictions on the entry of goods from entities such as the Maritime Authority Tocumen Air- Free Zone, minimizing the aggressiveness of the free Zone. port were delivered to individuals through contracts for long term as well as through grants such as Photo- As weather the Administration of President Varela this graphic Surveillance Cameras, in which the Contrac- complex situation? will need a lot of will, strength, popular tor of the “circle 0” the former President, was served support, full employment and above all transparency. L&E with large spoon, and crumbs were reserved to the State. Dawn and see. This makes the beginning of this administration that plagued drawbacks and pitfalls, while campaign promises are too onerous.

5. Discriminatory lists for investment. This inventory can’t miss the recent emergence of our country greylisting or tax haven recently published by the GAFIC and some governments, including Colombia, who believe in the Panamanian market has weakened control to avoid money laundering from corruption, drug trafficking and other crimes under international range. The banks and other international financial institutions are demanding that the Superintendent to review compliance by the Banks of Panama Square anti-money laundering measures.

8. Legislación y Economía - Julio 2014

SUPREME COURT DECLARED UNCONSTITUTIONAL ANIP LAW

José Javier Rivera - Abogado jjrivera@rbc.com.pa

y public statement, the Plenum of Supreme Court informed the public about the Declaration of Unconstitutional Law 24 of April 8, 2013, published in Official Gazette 27262-B of the April 9, 2013, by which the National Public Revenue Authority (ANIP) was created.

1. That by virtue of the Act or autarky autonomy enables officials of yore administered as an independent entity, without the participation of the respective minister, ie, Chancellor of the Exchequer is established. 2. The direction of the Minister of Economy on the National Tax Authority is obvious, cutting the power and This declaration of unconstitutionality was issued the constitutional duty of the Minister of Finance to parwithin the constitutional claim filed by lawyers Mi- ticipate with the President of the Republic of monitoring guel Antonio Bernal Villaláz and Luis Rogelio Garcia, the collection and administration of income nationals. who by letter filed on May 15, 2013, asked to declare unconstitutional Articles 1 and 14 of the Act refe- 3. As for the appointment for a period of seven years, the rred even though in the petitum, the aforementioned period of five years for which he was appointed Presilawyers requested the House to declare unconsti- dent of the Republic is exceeded, implying that this offitutional in toto of the aforementioned Act of yore. cer would remain in office for a period of eleven years, exceeding his appointment two presidential terms. A careful reading of the petition shows that these plaintiffs considered that this law violates Article 184 BACKGROUND of the Constitution, in their numbers 5 and 11 as enshrining powers exercised by the President of the Repu- Law 24 of 2013 born bad, since its original proponent was blic with the participation of the respective Minister of: curiously a deputy of the opposition PRD, Freddy Torres, a perfect neophyte to the tax issue, which lacked consti“5. Monitor the collection and administration of tutional power to propose the creation of a public body, National income. since this power is exclusive to the Executive Branch. 11. Appoint Heads, Managers and Directors of autonomous, semi-autonomous state enterprises and public entities, as have the respective Acts.”

When public opinion is expressed against such nonsense, the project was kept waiting for a better political moment and when presented, the same Minister of Finance at the time, Frank Explaining the plaintiffs have agreed on three De Lima, manifested ignorant of its contents. rape distorting elements of this Act; namely: In the preamble of this bill can be read that had sup9. Legislación y Economía - Julio 2014

port in a study by the Inter-American Center of Tax Administrators autarky tax administrations, such as Brazil, Chile and Argentina and the preamble it is seen directly that a tax administration shouldn’t have budgetary restraints, or other order, to act with autonomy in hiring and other fields that our Constitution ban.

arranged in the image and likeness of the person exercising this delicate function.

In discussing the project in first debate, quickly and benches PRD, Panamenismo warned unconstitutional draft and recommended its return as the Minister of Economy became a silent witness to the ANIP which we know has not been another thing that an arm of government policy of persecution already concluded, and was characterized by arbitrariness, lawlessness in their actions and the breakdown in relations between Treasury and taxpayer.

5. Pronouncements of tax administration aren’t known through consultations or other publications, because the duty of advertising required by law is violated.

In the second debate to public pressure on this autarkic model, the project was modified and a board of directors, chaired by the Minister of Finance and composed of the Ministry of Commerce, a delegate of the Ministry of the Presidency was created, Treasurer Ministry of Economy and other clothes washers to give it a collegial body. However, since this law was passed, the board never met because the manager kept only obedience to his master who was the President of the Republic. Now the Court, as indicated, has been considered that whole law is unconstitutional, which is a corrective measure because always the DGI was part of the Ministry of Finance and Treasury and then the Ministry of Economy and Finance and lacked the so-called autonomy or full autonomy. In another vein, please note that in practice many vices can be warn with a simple visit to this sad place; namely: 1. Almost is a police station where to enter you have to go all the records and aberrant to who has to pay a tribute humiliation. 2. At the same time for staff is a kind of cell or dungeon where they are treated worse than animals, and improper vulgar language of a tax administration. 3. Is processed quickly and efficiently the large number of issues pertaining to the taxpayer, because officials lack the power of discretion, as everything is 10. Legislación y Economía - Julio 2014

4. Refunds, exemptions, action on an application that involves credits or refunds of income for the taxpayer simply not processed and sleep the sleep of the just.

6. There is a presumption of guilt and taxpayer information spreads in social networks or in a national newspaper that gets taxpayer data officially. 7. The case is being processed too slowly and any request can take years to be resolved. 8. There is no tax policy, tax collection activity prevails only as if it were an account of monetary charge. 9. There is no incentive for compliant taxpayers. 10. Tax revenue have been delivered to a company called Isthmus Collections with fat profits, distorting the function of this Authority. 11. Even were issued arbitrary detention measures by an official who has no such power to affect most precious after life is freedom. 12. Have been issued sequestration measures and closure of commercial establishments, violating due process and the presumption of innocence. 13. Targeted audits focusing on those who were considered enemies of the ruling party or dissenting voices or donors to political campaigns of opposition candidates are made. We hope the Supreme Court ruling and publish this can recover a tax administration that is alien to political persecution, who is professional, respectful to the taxpayer, be dignified officials and to eradicate once and for all the presence militarism that characterized it, which we believe was the worst five years of tax administration in more than 100 years, led by a true ignorant of the topic.

12. Han and squandered public money;

Concerning the DGI, we believe that decisions should be reviewed by an independent and specialized court 13. During the last months of nefarious Martinelli’s that is part of the judiciary, but similar to existing spe- government took inhibitory and decisions contrary cialized courts such as the Maritime Court features. to pretend to support right at all costs arising from irregularities ANIP. This law firm that promoted the creation of the Administrative Tax Tribunal feels downright disappointed That is why the current government should also take absolute failure of this so-called Tax Tribunal. His short the initiative to close the Court to repeal the provisions life was marked by obedience and submission to the that created and complying with the Constitution and mandates and orders of Luis Cucalón and Executive. the law, create a Tax Court within the judiciary, without bureaucracy, without cronyism, respecting the guaranStatistics recently published by “Momento Fiscal” tees taxpayer, appointing professional and independent shows the following: persons of experience in tax law to restore taxpayer confidence in administration of justice in tax matters 1. Have been dedicated to him right to the tax autho- and thus relieve the Third Chamber of Supreme Court. rities; Within these reforms in the Administration of Tax 2. To prevent the prevalence of arbitrariness about Justice is important that professional tax adminiswhat legal; tration defended by their own lawyers and don’t do it through the Solicitor General, who often man3. Issued resolutions supporting orphan as has wardated by law, has to defend illegal, arbitrary and ned the Third Chamber of the Supreme Court. which often lacks knowledge elements acts. 4. The taxpayer loses 85% of cases appealed. 5. Hard administrative remedies, on average, 29 months. 6. Only 5% of the cases are appealed audits by the DGI. 7. Each record missed the ATT cost us on average US $ 17,500. 8. They refuse to order public hearings; 9. No question the experts within the expert evidence; 10. No evidence ordered by the court to know the material truth of a file; 11. Have an embarrassing delay in the resolution of cases, many of which have two and three years of being shelved in their refrigerated offices are an insult to the poverty of their results. 11. Legislación y Economía - Julio 2014

In the end, declaration of unconstitutionality of ANIP must remove this inefficient building located not only on Avenida Balboa, but also in the Tax Tribunal, two monuments whose foundation is arbitrary and servility. L&E

DIGITAL SHEET CHANGE BY SOCIAL SECURITY

he project is in the implementation phase and starts from the month of August, is to replace printed sheet which has been used by all of us for many years by a Digital sheet. To join this program, the employer must go to any of the agencies of CSS or email, giving your employer number to request a password, which will be subsequently received by email. Among the advantages of this project I can mention: • The information sheet can be accessed online from the place where we meet, anytime, entering CSS portal. • You can print as many times as required or vice versa. Will stubs for various beneficiaries. • Collaborating to enter Website of CSS, you can View / Print / Save Your Digital Items to criterion. • The Financial and Credit grantors may validate Digital Sheet accessing the Web site of CSS and Consecutive Number. • This system provides security because Digital Sheet will keep maximum reliability and confidentiality of each employee through a Consecutive Number provided by CSS and that will change each month. With its Personal Identity Number and Consecutive, the employee may validate their right to receive their Economic and Health Benefits in the facilities of the CSS or in a bank or financial institution as required for this contributor. • Cost, delays and rows of human resources departments who to date should send for printed cards to deliver CSS and its partners will be downloaded. • And most importantly it is an ecological project designed to save paper.

12. Legislación y Economía - Julio 2014

Ilka Pérez de Chen ilka.chen@rbc.com.pa

How the program works: • The employer must provide monthly through SIPE the data of each employee, these data will generate the Digital sheet. • Employers must access the Web page and download the CSS “Consecutive Number”, to be delivered to each of the employees, every month. • This sequence number allows employees access information about the Digital sheet. • The download, Handling, Delivery of “Consecutive Number” Collaborating, will by Employers

Its important to know that Consecutive Number: • • • •

It is different for each employee. Changes month to month. Non-sequential and is provided by the CSS. Is not generated by the Employer.

It is expected that by year 2015 and the project is completed nationwide and over 60,000 employers will benefit from this system. L&E

TRANSPARENCY COMMITTEE ON CONSULAR SYSTEM

he Foreign Ministry issued Executive Decree No. 262 of July 22, 2014 by which the Transparency Commission on Consular system for reviewing the legal framework of the Merchant Marine Consulates Privative is created, the established with the order to contribute to the review of the current legal framework and formulating the new consular body. It has the standard, in the recitals that the Commission is created with the aim of adapting the rules of Privative Consular Service global standards of quality and efficiency in terms of trade facilitation, investment promotion and in turn, ensuring the protection and defense of the fiscal interests of Panamanian state in the international arena. The Commission shall be composed of the Minister of Foreign Affairs, Deputy Foreign Minister, Deputy Minister of Finance, Deputy Administrator and Administrator of the Maritime Authority of Panama, who are entitled to vote. It has been assigned to the Commission shall organize a team of government experts and professional servers of government related entities and members appointed by the unions of the civil society, to develop studies to review, update and unification committee legal regulation pertains to the proprietary Merchant Marine Consulates. The Committee shall be to propose a new rule governing the Consulates, promote efficiency, order and transparency in the provision of consular collections. L&E

13. Legislaci贸n y Econom铆a - Julio 2014

Giovana del C. Miranda G. - Abogada giovana.miranda@rbc.com.pa

MINISTER CARLES DISCLAIMS COMPLAINT AGAINST UNIONS

y Cabinet Resolution No.140 of 22 July 2014, the Cabinet authorized Minister of Labor and Workforce Development to withdraw on behalf of Ministry of criminal prosecution prosecutor be found in the Tenth Criminal Circuit complaint that is filed by former Minister of Labor and Workforce Development against nine union leader of different plants for allegedly used improperly subsidizing the Educational Security, whose percentage is 5%, and must be delivered to workers’ organizations However, perception was that it was a political persecution by the last government, a situation that would be considered by the International Labor Organization as a violation of freedom of association. Still fulfilling the mandate, Minister of Labor and Workforce Development, Luis Ernesto Carles through its legal representative presented on July 25 at the Tenth Criminal Circuit, the withdrawal of criminal complaint filed by the previous government. Among the union leaders who were sued are: Mariano Mena, Alfredo Berrocal Arosemena, Victor Manuel Torres, Guillermo Puga, Egberto Cobos, Cristóbal Muñoz, Armando Rangel and Aniano Pinzón The move was welcomed by the unions, who considered that puts an end to the political persecution they had been during the previous administration, to the point that the judiciary after the trial investigations ordered a temporary stay in favor of union leaders and ordered the case closed, but Government subsequently requested a reopening of the case. We estimate that the action of current government, hasn’t 14. Legislación y Economía - Julio 2014

Giovana del C. Miranda G. - Abogada giovana.miranda@rbc.com.pa

only been welcomed by union leaders but all Panamanians, we see that these actions what is sought is a harmony and job stability by bringing workers sector to the three sectors employer, workers and government can continue to sit in a dialogue to find solutions to benefit the country. L&E

PUBLIC SERVANTS TO STAY IN POSITION TO THEREFORE BE REPLACED

n recent days, the Office of Administration, had the occasion to deliver C-2414 of 8 July 2014 on request made by the President of the Municipal Council of La Chorrera, which relates to “the authority to which he corresponds appoint or designate, albeit on an interim basis the officer with sufficient authority to be in charge of managing the municipality of La Chorrera, while complying with the procedural stages of challenge by the Electoral Tribunal.” Attorney notes that Article 793 of the Administrative Code establishes a general rule, which is to protect regularity and continuity in the administrative works of public institutions, establishing duty of public servants, to continue to exercise this office until replacement, although the period has expired. Authority estimates that the questions raised focus on whether the Mayor is an administrative employee or public servant whether Article 793 to which reference has been made applicable administrative public servants who have accessed the popularly elected. In this regard, indicates the Attorney that the mayor and chief administrative officer of municipality is responsible for directing, managing and supervising the operation of municipal government, therefore it is an administrative public servants and municipal activity directed is to satisfy the basic needs of the local community. But to acquit the question, consider the Attorney that section 793 is applicable for public servants who came to office by popular election, as this rule doesn’t distinguish between employees or appointed administrative public servants or elected, but it does in general, without distinguishing so you should see a general principle of law which provides that “where the law doesn’t 15. Legislación y Economía - Julio 2014

Giovana del C. Miranda G. - Abogada giovana.miranda@rbc.com.pa

distinguish, we judge it is not feasible to distinguish.” It concludes that outgoing Mayor of La Chorrera district is obliged to remain in office, but his term is over, until it is replaced in due form, so that an interim appointment is not justified. L&E

“IMPORTANT ASPECTS OF AFFILIATION AND THE RIGHT OF HAPPEN IN PANAMA LAW”

The nasciturus, is a legal term from the Latin future participle, to be born. Used to refer to the human being from the moment of conception to birth. Therefore alludes to conceived and unborn.

Karen Fábrega - Abogada karen.fabrega@rbc.com.pa

the deceased. This claim must be made by the mother in a period of 30 days after her husband’s death. In light of this, this claim can do only the wife of the deceased. This procedure is governed by Law No. 100 of December 30, 1974, where the necessary requirements for applying for In our legal system, the concieved and unborn, is protec- recognition of the son if the father died before his birth. ted, so much so that our Civil Code, refers to protection of its existence if someone disturbs, such as, what is abortion, Moreover, there is Judicial Recognition, applies when the governed by Penal Code, as it’s a crime, and therefore have parent doesn’t recognize child and this requires recogrights, however, don’t become effective until the moment nition of paternity, either in their own right, if of legal they are born, which the standard “is considered born, age; and if it is a minor through his legal representative, the fetus liveth even a moment detached from the womb.” in all cases the mother. Similarly, it may be brought this action, in case the father wasn’t recognized and dies, the Day by day they are generating some doubts about recognition process is supplied with the heirs alleged or the conceived unborn, the children acquire these declared, giving power to the judge to fix alimony provirights from the moment of birth, the effects of his bir- sionally by the defendant, while duration of the process. th, what to do if some of their parents dies, the property rights of deceased father a legal dispute other Usually the Judicial Recognition is an outlet for children assets if siblings had different fathers, among others. born out of wedlock, to have the same opportunities as children born within marriage, that for the purposes theFirst, we must establish that children have fundamental re is no difference, are equal before the law, as stipulated rights enshrined in the Convention on the Rights of the in Article 237 of the Family Code: “all children are equal Child, as well as reinforced in the Family Code, as the before the law and have the same rights and duties with law to be recognized and carry the names of their pa- respect to their parents, whether by blood or adopted.” rents, whose recognition may deal in different scenarios. If we had a hypothetical case of a man and a woman, married The Family Code, enshrined in Article 287 thereof, the and had a son, then divorced. Subsequently the man. bechild born after the death of his father, and called posthu- gins an affair with another woman (unmarried), and dies, mous child. Post-Mortem recognition, initiates woman resulting pregnant new girlfriend. Do you have rights to who suspects she is pregnant should report to those con- succeed the former wife and the new girlfriend of the deceacerned will happen, ie, who are entitled to inherit if there sed? What rights does a child born in marriage? Will pictuwere no posthumous child, ie the children if any, or rules re the child was not born on the property of the deceased? of Civil Code, other relatives could inherit property of 16. Legislación y Economía - Julio 2014

Recalling the discussion in previous lines, we must begin with the principle that all children are equal before law, therefore, both have rights to the assets of deceased. Meanwhile, the nasciturus, may be entitled to those rights from the moment of birth, so the mother should seek judicial recognition of child, so that the relevant evidence (DNA) are performed to prove the paternity of the child, and then by their recognition judgment ordered. Once done this procedure, the mother may claim inheritance rights on behalf of her son. We must make clear that the ex-wife of the cujus, has no right to inherit, because from the time she divorced, lost that right, as established by the Civil Code, on the surviving spouse, who were divorced by judgment firm shall be entitled to inherit with their children, which is not the present case. Similarly, the second concubine of the deceased, has no right to inherit, because there is no link between them. From instituted probate by mother of the first child, on your behalf, and mother of the second child, has not achieved the recognition of child, without the process has completed, you may request a mistrial Succession in Given that the second son was unable to appear at trial, by virtue of that at the time wasn’t recognized in accordance with Article 751 of the Judicial Code, to roll back the process until such time as representative of the second child can do assert his right. Even if the succession process has completed, ascribing the property only to the first child, you can also request the annulment of the process, through a motion for review. In both cases, it should be noted that there is a term to institute such actions. Regardless of different scenarios that may arise, we can conclude that the sons will always have the right to inherit, because law makes no distinction in the way these are designed, as we discussed above. Similarly, by Act No.39 of April 30, 2003 called “Responsible Fatherhood Act” which seeks to hold men who deny paternity of child, establishing the procedures for access to recognition of the child, taking always consider the Principle of the Best Interests of Minor. L&E

17. Legislación y Economía - Julio 2014

SUPREME COURT OF JUSTICE DECLARES UNCONSTITUTIONAL COLLECTION OF STAMPTAX IN REQUESTS PRESENTED BEFORE PUBLIC SERVANTS

Augusto García - Abogado augusto.garcia@rbc.com.pa

y judgment dated May 28, 2014, the Plenum of the Supreme Court declared unconstitutional in paragraph 1 of Article 960 of the Tax Code, by which it was established as a fact taxed with stamp duty, filing briefs written and petitions addressed to any officer, authority or public corporation.

The plaintiff sustained in his claim that Article paragraph 1 of Article 960 of the Tax Code, violates Article 41 of the Constitution of the Republic of Panama, which enshrines the right to request that all citizens against the state authorities, and literally set the following:

That ruling arises from constitutional claim presented by Atty. Mario Antonio de Diego against the clause in question 1 of Article 960 of the Tax Code of the Republic of Panama, in accordance with statement by Article 962-A of the Code, which established to express the following text:

ARTICLE 41 Everyone has the right to submit respectful petitions and complaints to public officials on grounds of social or private interest, and to obtain a prompt resolution. The public servant to whom a request, inquiry or complaint is filed shall be resolved within a period of thirty days.

Article 960 shall be extended to enable plain paper, in law shall specify appropriaterms established by Article 962-A of the Tax Code: The te sanctions for violation of this rule. 1 Memorials, written or petitions addressed or presented to any officer, authority or public corpora- In its complaint the plaintiff noted that paragraph 1 of tion. Exceptions are presented to the tax authorities. article 960 of the Tax Code is a violation of constitutio(The underlining is ours) nal article cited, since it requires application and collection of a tax stamp every time a person lead a written reArticle 962-A. Printing paper and notary seal is removed. quest, complaint , consultation, or memorial, to a public servant, conditions that are outside the constitutional In cases where, according to Tax Code, the Stamp Tax norm and become an obstacle to free exercise of this right. satisfaction through paper and notary seal is required, it of the Office of Administration: will be used plain paper, legal size, 8 1/2 “x 13” gauge not Opinion less than twenty (20) pounds, enabling each two-sided sheet with stamps by adding eight Balboas (B /. 8.00), Using Attorney Vista No. 765 of October 20, 2011, the embossing franking machine or by affidavit of the tax, in Office of Administration said that the challenged proviaccordance with provisions of Article 946 of this Code. sion is not unconstitutional, since Article 41 of the Constitution doesn’t state explicitly gratuity for all writings to The paper thus enabled, usable vertical space shall be appear before administrative authorities, why the legislathirty lines, and the width of lines shall be double spa- tive body was fully empowered to create national treasury ce in widespread use. The horizontal writing spa- for the assessment contained in paragraph 1 of Article 960 ce is 6.69”, leaving two equal margins on both sides. of Tax Code, under the constitutional principle of tax law.

18. Legislación y Economía - Julio 2014

Similarly said that the challenged provision unconstitutional Thus, the Court identified that there is a close link betcan’t be analyzed in isolation since in Article 961 of Tax Code a ween the right to petition and the right to effective junumber of situations in which stamp tax is required enshrined. dicial protection, since applications, requests, complaints or requirements that are formulated to public Finally said that the arguments outlined by the plain- servants could result in an administrative or judicial tiff in his application had already been ruling by the process especially as the answer that the State furnishes Supreme Court ruling through December 6, 1983. the particular and which may promote actions or remedies in accordance with what is established in the law. Analysis of the Plenum of the Supreme Court: The plenum of the Supreme Court begins its analysis by Similarly noted that in the field of administrative law, stating that while such corporation ruled by judgment of 6 has assimilated the right to effective administrative suDecember 1983 concerning the constitutionality of Article pervision to content of the right to effective judicial pro960 of Tax Code, in present case it is not feasible to declare tection, in the sense of ensuring free access to the courts constitutional jeopardy, under Article 41 of the Constitution in order to defend the rights and interests against the enshrines estimated violated a fundamental right which is government, through legal means and an established recognized in international treaties signed by the Panama- procedure, and that the claim is resolved by duly reasonian State, as is the American Declaration of Human Rights. ned and founded, within a reasonable time resolution. In this sense, the Plenum of Supreme Court said that in terms of fundamental rights, the State must remain vigilant of its legal system, in order to take necessary measures to bring domestic legislation abolishing any provision infringes, diminish or impair the exercise of fundamental rights. On those grounds, the House notes that the right to petition contained in Article 41 of the Constitution is a right that assists the person to file petitions and complaints to public authorities, ie, that constitutes a mechanism to go to the authorities or bodies representing government in a submission, which carries the objective of obtaining a response in a reasonable time. Based on what discussed above, the Supreme Court realizes that Article 41 of the Constitution only as a requirement for submission of requests that be formulated within the framework of respect which is why it is shown that the full enjoyment of right to petition, the said stamp duty becomes an obstacle, since for a person to have access to public authorities on applications and other forms of request, you must first pay the tax as a condition that it can be staffed by public servants. In this vein, the Supreme Court noted that even if the State has sovereign authority to impose taxes and that the principle of tax law, tax the activities and events and available wherever through a formal Act issued by the National Assembly can’t be overlooked that the exercise of this power requires the duty to respect other constitutional requirements, ie that it is not an absolute right especially when its imposition or injured affects fundamental rights. 19. Legislación y Economía - Julio 2014

As discussed above implies that the State has the obligation to establish a procedure free from any limitation or condition that hinders or impedes access to managed to the different levels of government, whether administrative or judicial. Based on the arguments above, the Plenum of Supreme Court ruled in favor of removal of stamp duty on all performances through which access servers or public authorities and thus may exercised effectively, the right to petition and the right to effective judicial protection, thus resolving DECLARED UNCONSTITUTIONAL, paragraph 1 of Article 960 of the Tax Code. This judgment sets a precedent of cardinal importance because of the implications for both the state and taxpayers, under the charge of stamp duty within the various petitions and applications submitted to the administrative authorities has become a real headache for taxpayers, since many times the cost of this tax, which as stated in Article 962- a tax code is eight Balboas (B/. 8.00) for each page containing the respective application, petition, etc., can be quite onerous becoming a true condition for taxpayer, as stated by the Supreme Court in present Judgment. The situation described above is compounded when consider that some administrative authorities also require payment of stamp duty in the briefs containing pleadings, petitions or complaints, also require satisfaction of such tax in other documents as true copies, evidence , etc., which raises transaction costs and makes itself can be prohibitively expensive, if you add other expenses that may involve procedures such as professional fees for lawyers, accountants, and other professionals who may be involved in certain administrative process.

Moreover, this judgment has a significant impact within the collection of that tax, since it has effect for future after the execution thereof, which is set once notify all parties involved in the process vented to the plenary of the Supreme Court, which is why we should expect these procedures to determine the impact this decision will have on public finances will take, which as has been advanced by the authorities Ministry of Finance during this new administration, reflected a significant decrease in tax revenue which can seriously compromise the investment budget of the new government. L&E

20. Legislaci贸n y Econom铆a - Julio 2014

“PLENUM OF SUPREME COURT RULES ON CLAIMS AGAINST UNCONSTITUTIONAL LAW THAT CREATED THE SUPERINDTENDENCE OF BANKS “

he Plenum of Supreme Court issued its judgment of 11 June 2014 concerning the unconstitutionality of Decree Law No. 9 of February 26, 1998, which created the Superintendence of Banks and dictates rules on banking regime. The first of these lawsuits was filed in 1998.

Karen Fábrega - Abogada karen.fabrega@rbc.com.pa

The controversial point of judgment of July 11, 2014, which we had the opportunity to discuss concerning the extraordinary powers of the Executive Branch (The President and Ministers of State), to issue laws, which are called Decree Laws. This power is delegated to National Assembly during its recess and should be set in From 1998 until the Judgment of 11 June 2014, it’s been 16 a timely manner the matters to be regulated in accoryears for the Supreme Court resolved the claims of uncons- dance with Article 159, section 16 of our Constitution. titutionality, passing this important institution of justice by various events, such as the Magistrates headlines those days The Decree Law No. 9 of 1998 in Article 19, the Executive are gone, some were beat 10-year period for which they Body decided: were appointed and some others died, so that corresponded to appoint new justices, so, a ruling on the Demands 1. Imposing a rate 1 banking regulation, the amount type of unconstitutionality was knowledge about by 25 judges. caters to licensed banks according to their activities. For general license banks, which are those that operate in An important historical event, is the reform of the Constitu- Panama and abroad, they set a rate 100,000.00. The Intion of the Republic of Panama in 2004 during the adminis- ternational License, those banks based in Panama, but tration of former President Martin Torrijos Espino; and the only made foreign operations, whose rate is 15,000.00. amendment of Decree Law No. 9 of 1998, by Decree Law No. 2 The License Representation, serving foreign banks with of 22 February 2008, which contained an article authorizing offices in Panama, but don’t conduct operations, ie, the executive branch to order are not reformed provisions that only promote their services visit their active cusof Decree Law No. September 1998; legal life birthed Exe- tomers in Panama or abroad, who pay a fee of 5,000.00. cutive Decree No.52 of 30 April 2008 adopting the Consolidated Text of the Law No. 9 of 1998, known. “Banking Law.” Our Constitution, in Article 52, concerning the principle of strict legality Tax provides exhaustively, no one is required to While these events may cause a delay in the deci- pay contributions or taxes, which are not prescribed by law sion made by the Plenum of Supreme Court, conti- and your payment is not made of the way the law prescribed. nues to be a worrying situation seeing a judicial backlog, perhaps the longest in history, that transcends This article was declared unconstitutional by the Supreme responsibility of one or more judges, or the entire Supre- Court to the detriment of the principle of legality Tax under me Court, and even consider a serious institutional pro- it was not for the Executive Branch, establish or eliminate blem involving the administration of justice in general. taxes, it is the exclusive subject of our members through formal laws, referred to in our constitution as organic laws, 21. Legislación y Economía - Julio 2014

and as such, must be approved in second and third reading, in any case, they must comply with the power the law giby an absolute majority of the members of the Assembly. ves to verify this evidence that was vital to deliver failure, and that instead of declaring the unconstitutionality, it was However, the analysis argued by Supreme Court, we must right to order the removal of material, ie not enter into the indicate that it has neglected the Law No.97 of 21 December, substance or allegations of unconstitutionality of Article by which the Ministry of Finance is created and other pro- 19 of Decree Law No. 9 of 1998, under that constitutional visions, which creation is done through organic law, passed mistake was rectified by Article 20 of Law No.97 of 1998. in three readings the December 2, 1998, meeting the constitutional requirements for issue, in addition to publication To conclude, it is vital that this error is corrected, as to overin the Official Gazette No.23, 698 of December 23, 1998. look this point, there is some possibility of bringing any of Appeal, as the decisions issued by the Supreme Court Article 20 of Law No.97 of 1998 concerning the rate of on unconstitutionality are final, definitive mandatory. L&E Banking Supervision and Regulation adopts the tax described in Article 19 of Decree Law 9 of 1998 on the rate of bank regulation is unconstitutional as applied, adopting thus the creation of a tax, and at discretion of the entity or its catkin reduction. That said, the mistake of unconstitutionality is remedied, a fact that wasn’t taken by our Leading Corporation of Justice when issuing its decision, and as a result is being left to the Superintendence of Banks no budget to meet precisely your goal as an entity and regulatory oversight of banks in the Republic of Panama. For now, only be that interested in the constitutional claim, applying the ruling of the Supreme Court of Justice on this omitted paragraph of the operative virtue, that our Judicial Code states that it is presumed that magistrates and judges are aware acts or documents published in official gazette, why it is not necessary for the proceedings, so that

22. Legislación y Economía - Julio 2014

PORRAS, ARIAS, TORRIJOS LEADERS OF OUR POLITICAL HISTORY

o doubt, in the passage of our history there were many leaders in our country who are noted for their political participation. Some occupied the First Magistrate of the Nation, and many others didn’t, but left a trail of meritorious career that is collected by the annals of history.

Rafael Fernández Lara rbcweb@rbc.com.pa

Overview Dr. Belisario Porras Barahona: Born November 28, 1856 in Las Tablas, capital of the province of Los Santos. He attended high school in the city of Bogotá and later earned his Doctorate in Law and Political Science at the National University of Bogotá, and then contiOf these, in our opinion, three further nue his studies at the University of Leuven in Belgium, highlighted regardless of negative or positive opi- thanks to a grant from the Colombian government. nion could give each Panamanian management. Upon returning to the Isthmus of Panama entered CoThey are Dr. Belisario Porras Barahona, Dr. Arnul- lombian Liberal Party. Remember that it was not until fo Arias Madrid, and General Omar Torrijos Herrera. 1903 that the Isthmus of Panama or Department, achie23. Legislación y Economía - Julio 2014

ved independence from the central government in Bogo- electoral contest of 1928, Dr. Porras tried to run for his tá. Dr. Porras also worked as a journalist and was a poet. party, Porrist National Coalition, but was forced to withdraw in favor of Dr. Jorge E. Boyd. In subsequent elections Upon taking power a conservative government in in 1936, at age 79, he ran for the Presidency of the RepuBogotá and undertake a persecution against mem- blic nominated by United Liberal Party and came third. bers of the Liberal Party in the Isthmus, Dr. Porras is forced into exile in El Salvador and Nicara- During his presidency he made important works of congua. During this exile taught in Law and Geography. solidation and national organization, including creation of National Codes, construction of transport and comBelisario Porras was one of the most important leaders munication as the Railway Changuinola, founded the of Colombian Liberal Party during Thousand Days War Hospital Santo Tomás in the capital, improves hygiene between conservatives and liberals. This devastating and in the country general. Create entities such as the Rebloody war, which killed about 5,000 Panamanians and gistry Office in the Plaza Porras, Public Registry in the between 50,000 and 100,000 Colombians, lasted from neighborhood of tLa Exposición, the National Archi1899 to 1902 Liberal by conviction, directing the liberal ves. Organize public education, attends the opening of revolution on the Isthmus, and organized an invasion lan- the canal (1914), nationalizes the national lottery and ding on March 31, 1900 in Punta Burica, Chiriqui, with a the ecological problem is concerned since that time. battalion of volunteers with help of President of Nicaragua, the liberal José Santos Zelaya, and President of Ecua- Dr. Belisario Porras died on August 28, 1942 in a pridor, liberal too, José Eloy Alfaro Delgado. Belisario Porras vate clinic in Panama, as the great work of his last adCivil and Military Chief proclaims the Department of ministration, the Hospital Santo Tomás, a bed was Panama and its military campaign resulting in significant not available to admit it. The irony is that to build victories, such as the taking of the city of David, the villa- this hospital was heavily criticized for his large size. ges of Chame and Bejuco, to suffer its historic and bloody defeat at the Battle of the Bridge Calidonia 24 July 1900 Dr. Arnulfo Arias Madrid Overview: Dr. ArnulThis failure caused his second exile in Central America. fo Arias Madrid was born on August 15, 1901 in the town of San Juan Bautista de Penonomé, ProvinThree years after military setback Dr. Porras, the De- ce of Cocle. He began his studies under guidance of partment of Panama achieved independence from Co- the Christian Brothers in his hometown. He was the lombia. Porras initially disagreed with this separation youngest son of the family Arias -Madrid and his olprocess in 1903, because they opposed the treaty between der brother, who had 15 years of age, Dr. Harmodios the United States and Colombia to build a canal because Arias Madrid was three times President of the Republic. he considered it an affront to the sovereignty of Colombia. Months before the independence of Panama from Colom- He attended New York College Harwick and later did unbia, Porras said that accessed the independence, the coun- dergraduate studies at Chicago and Harvard, earning the try would fall into the clutches of the American empire. title of Doctor in Medicine and Surgery. He especializaó in Psychiatry, Obstetrics and Gynecology and Endocrinology. Dr. Porras returned to Panama in 1904 and continues to militate liberalism, but now in the Panamanian Li- He returned to Panama in 1925, and a year later opeberal Party. In 1905 the Supreme Court withdrew the ned his private clinic. He was Professor of HygiePanamanian nationality for their initial opposition ne and served as a surgeon in Hospital Santo Tomás. to independence and political opponents qualified him as a traitor. Despite this, and his political rights In 1930 enrolled at Community Action Movement, restored, popularity rose in the independent Pana- inspired by nationalist civic association rules civic ma, and in 1912 was elected Constitutional President and patriotic feelings. The January 1, 1931, Comof the Republic of Panama by a comfortable margin. munity Action, lead by Dr. Arnulfo Arias, carried out the first coup registered with our republican hisDr. Porras was elected President three times: from 1912- tory, this one against the Constitutional President 1916; from 1918 to 1920; and from 1920 to 1924 in the of the Republic, Florencio Harmodio Arosemena. 24. Legislación y Economía - Julio 2014

In 1935, during presidential administration of his brother, Dr. Harmodios Arias Madrid was selected for the post of Secretary (Minister) of Agriculture, Development and Public Works. That same year, Dr. Arnulfo Arias Madrid organized the National Revolutionary Party, proclaiming the presidential nomination of Dr. Juan Demostenes Arosemena, who gets the Presidency of the Republic. The Chair appoints Arosemena Envoy Extraordinary and Minister Plenipotentiary to the governments of Germany, England, France, Sweden and Denmark. At this time Dr. Arias also served as Delegate to the Legion of Nations until 1939.

Overview of General Omar Torrijos Herrera: Born February 13, 1929 in Santiago de Veraguas. Son of educators and member of a large family of twelve children. He began secondary education at the Normal School Juan Demosthenes Arosemena, but after getting a scholarship, entered the Military Academy in San Salvador, where he earned the degrees of Bachelor of Arts and Sciences and Lieutenant of Infantry. He completed military training at the School of the Americas, led by the United States of America.

He joined the National Guard to return to Panama from San Salvador in 1952 In 1956 he was proDr. Arnulfo Arias Madrid was first elected as President moted to Captain; Mayor in 1960; and in 1966 in 1940, but was deposed in 1941, occupied the presi- was promoted to Lieutenant Colonel and assudency for the second time in 1949 and was dismissed med the position of Secretary of the Command. again in 1951 for the third time in 1968 and ousted the eleven days of his administration. The military remo- The October 11, 1968 Major Boris Martínez Salazar ved on the three occasions mentioned, so could never emerged as the lead chief of the coup that overthrew finish any of his presidential term. He ran for president the government of Dr. Arnulfo Arias Madrid, with the twice more, in 1964 and 1984 (the latter at 83 years of participation of other officials such as José H. Ramos, age) and was the victim of electoral fraud. Despite the- Omar Torrijos Herrera, Federico Boyd and others. The se multiple accesses or approaches to power, only ser- February 24, 1969, the now Colonel Boris Martínez, Feved as President of the Republic for about three years. derico Boyd, Jose Ramos and Mayor Humberto Jimenez were expelled by Omar Torrijos to the United States His political career was characterized by being very agi- and the latter taking the reins of “revolutionary process”. tated. He was imprisoned, wounded, deported, tried, and dismissed the subject of attempted murder on se- Omar Torrijos was a political, military and revolutionary veral occasions. He was exiled for more than two de- fighter for social rights. Its main goals were to defend the cades. In 1943 he was denied entry to the country to rights of the people and rescue sovereignty over Panabe present at the funeral of his mother, Carmen Arias ma Canal under control of the United States. Exerting Madrid. In 1955 he was not allowed to accompany his power, promulgated the Constitution of 1972, where he wife, seriously ill, a specialist clinic; in the United Sta- assumed full powers over the country, proclaiming Head tes as a result of a state trial for being accused of tax of Government and be granted the rank of General. He evasion shortly after his wife dies, the August 28, 1955. created a new Labor Code, nationalized the generation and distribution of electricity, created Ministry of Culture During the limited time of their presidential terms, and boosted food production to ensure basic food needs. among his major works is the controversial enactment of the Constitution of 1941; the creation of the Agri- In our opinion, his greatest achievement was the adcultural and Industrial Bank; the nationalization of vancement of negotiations for a new Panama Canal the retail trade; the regulation of the legal profession, treaty with United States, after several generational banks, commerce; the legalization of votes for wo- struggles, signed in Washington on September 7, 1977 men; the issuance of paper money; and the creation under the title “Torrijos-Carter Panama Canal Treaty.” of the legal figure of Family Heritage among others. Following that, sovereignty and total assignment of the Panamanian state territory called Canal Zone was giDr. Arnulfo Arias Madrid was considered by many as an ven, and the Interoceanic Canal, from 1 January 2000. icon of Panamanian democracy. The charismatic leader died at age 87, in exile in Miami, United States of America. It was the inspiration and founder of the Democratic Re25. Legislación y Economía - Julio 2014

volutionary Party (PRD), considered today to be one of For his part, General Omar Torrijos was anti-imperiathe most important political organizations in the country. list and anti-oligarchic, autocratic, paternalistic. It was subject to political persecution. He defended the instiAfter presenting this overview of the life of the- tutions related to national culture. Warlord with some se three large Panamanian political leaders, let’s see cutting of socialist populism. He had great rapport with what were some of their similarities and differences. students, peasants and workers. He communicated with the masses through informal dialogue and also through Dr. Belisario Porras had several similarities with Dr. Ar- formal speeches. It was characterized by its geographical nulfo Arias. Both leaders were popular and were elected patrols nationwide, which he called “Domestic Patrol”. by popular vote for President of the Republic on three different occasions. Presidential candidates were also twice The enigma that many Panamanians arise is how would they failed its mission; Porras lost an election and was have developed and have resulted in some presidential forced to abandon his aspiration in the other; Dr. Arias polls between Dr. Arnulfo Arias Madrid, and Genewas the victim, according to many, electoral fraud twice. ral Omar Torrijos Herrera. This capability disappeared with the death of General Torrijos rugged in 1981 Dr. For his part, General Omar Torrijos exercised political Arias died a natural death seven years later, in 1988, power through a military coup and the country contro- in our view, the outcome of these elections had favolled by the autocratic figure of “head of government” red the ruling panameñista Dr. Arnulfo Arias Madrid. in the Constitution of 1972 he created. He never underwent general elections and thus to the popular will. Of these three great leaders, arguably the most persecuted was Dr. Arnulfo Arias; his busy political career proThese three leaders were characterized as autocratic in ves it. However, I would go for Dr. Belisario Porras if he their actions. should be appointed to some as the closest to the ideal Dr. Porras communicated with the masses through in- leader, since it was practically the architect of our demoformal gatherings, and also with their dissertations. The cratic institutions, coupled with its own qualities, and as cultural component of his personality were based on folk the creator of large works and visionary statesman. L&E and religious institutions. His political creed was always guided by the principles of liberalism, which advanced in practicing lawyer and journalist. It was anti-oligarchic, fearless, honest, politically harassed, exiled, lost their political rights. It was a doer of legal, social and national monuments for the country entities. I always kept in touch with the needy, peasants, Indians and blacks. Dr. Arnulfo Arias was a doctor, diplomat and agribusiness entrepreneur. His political creed was nationalism. The cultural elements of their identity relied on folk and religious institutions. He had great support from the population of the country humblest extraction. It is exteriorized with the people through formal speeches. It was characterized as autocratic in their concessions. He railed against imperialism and the oligarchy and was vehement opponent of militarism. He was imprisoned, exiled, persecuted politician ousted from power three times, lost and regained their political rights, was wounded and victim of electoral fraud. He gave special support to the enhancement of national pride. 26. Legislación y Economía - Julio 2014

DECÁLOGOS DE ANTEPROYECTOS DE LEY PRESENTADOS ANTE LA ASAMBLEA NACIONAL DE DIPUTADOS. Yorlenys Gaona yorlenys.gaona@rbc.com.pa

o consider it of great interest and in order to keep updated on all our subscribers Law & Economics magazine, through our space “Current RBC”; We have implemented regularly send the bills submitted by the various committees of the Assembly of Deputies, with a central overview of the purpose thereof. Waitingforthemisvery useful information thisnew segment,thenwe detailsome ofthedrafts presentedto date.

DRAFT LAW N ° 006, TO AMEND ARTICLES OF TAX CODE OTHER TAX PROVISIONS Por: Augusto C. García

He was recently presented to the National Assembly the draft Law No. 6 of 2014, by the Deputy Zulay Rodriguez, which seeks to introduce a number of amendments to the Tax Code, in order to modify related provisions determining the tax Property, and make changes to the rules governing the conduct of assessed valuation by the Ministry of Economy and Finance. The main changes that seeks to introduce this draft are the following: 1, the exemption amount for estate of B / B 30,000.00 / 40,000.00 is increased. 2. rates are decreased to calculate the property tax. 3 ranges of taxable property values are increased. 4 new special table for the taxation of property subject to the PH regime houses are vertically introduced. 5. alternative combined progressive rate was also lower percentage rates for the calculation of property tax 6 changes to the rules governing the assessed valuation made by the MEF are introduced, stating that such assessments may not exceed 50% of the valuation of market or commercial force.

27. Legislación y Economía - Julio 2014

SUMMARY ANALYSIS OF DRAFT BILL AMENDING ACT NO.5 OF 11 JANUARY 2007 THAT SPEEDS THE PROCESS TO ESTABLISH BUSINESS AND MAKE OTHER PROVISIONS Por: Ailen Galván

This proposed by the Honorable Deputy Ivan Picota, blueprint aims to regulate and ning of business whose function is the sale of alcoholic beverages, as previously ploit this type of activities with a simple requirement: “a favorable report issued by District “and the same regulated only to establishments that were framed at level ft proposes today that both levels are set as a prerequisite a favorable resolution

monitor the opepermitted to exthe Mayor of the two; so this draof the respective

The Municipal Planner Board shall within thirty days and can only reject this request and reasoned decision in response to provisions of Article 8 of the above Act. And any new or existing business dedicated to sale of alcohol, once this rule into effect between, must comply with established standards and assessment should apply to the respective Municipal Planning Board. As such if aren’t complied with the recommendations established by the Board, the competent authorities shall have the authority to order the closure of the business.

DRAFT LAW TO DECLARE A MORATORIUM ON ACTIVITIES OF EXPLORATION AND METAL MINING IN PANAMA Por: Maybé Mendieta

On July 7, 2014, the Honorable Congresswoman Ana Matilde Gómez, presented to the General Secretariat of the National Assembly, the Draft Law No. 10 of 2014, “by which the moratorium is declared in the activities of metal exploration and mining throughout the national territory. “ The said Bill includes the following aspects: • Declare a moratorium on the granting of licenses and/or permits to carry out exploration or exploitation of metallic mining. • During the moratorium the competent authority, represented by the Ministry of Commerce and Industry, may not renew or extend mining concessions for exploration or metal mining open pit; therefore all procedures related to such activities are suspended. • Permits and mining concessions for exploration or exploitation of metallic minerals that have been previously granted may continue to operate as long as “comply with all obligations under national legislation, concession contracts, the applicable international conventions and agreements state to apply.” • The Ministry of Trade and Industry will proceed with cancellation of permits and mining concessions are operating “illegally or with proven environmental and social affectations.” • The term of the moratorium is subject to a referendum, through which the society being based on costbenefit studies; environmental assessment and strategic environmental risk; and a review of institutional capacity and current mining code; decide whether this activity is in harmony with the best interests of the country. (Article 1 of the Draft). 28. Legislación y Economía - Julio 2014

• Suspension of laws relating to the processing, procurement renewal and extension of the activity of opencast mining, contained in the Code of Mineral Resources of the Republic of Panama.

DRAFT BILL N° 012 TO “REGULATING STATE RESPONSIBILITY FOR POOR PERFORMANCE OF ITS PUBLIC SERVICES AND VIOLATION OF HUMAN RIGHTS, AND REPEAT ACTION AGAINST RESPONSIBLE PUBLIC OFFICIALS” Por: Lidia Domínguez

Anteproyecto 012 de 7 de julio de 2014, proponente el H.D. Elías A. Castillo G.: Consta de 7 Capítulos y 39 Artículos, cuyo objeto es “establecer los mecanismos legales para la reparación de perjuicios ocasionados por la mala prestación de los servicios públicos, y por la violación de los derechos humanos, así como la facultad del estado de repetir contra los servidores públicos que sean declarados responsables de esos perjuicios”. El estado podrá ser declarado responsable y ser obligado judicialmente a reparar a los afectados, por la defectuosa prestación de estos servicios que brinde directamente, cuando dicha prestación defectuosa haya producido efectivamente daños a los usuarios. La responsabilidad mencionada puede darse por hechos, actos y omisiones que le sean imputables y causen perjuicio a cualquier ciudadano según lo determinado por las autoridades judiciales competentes o en el marco de los mecanismos establecidos por la Ley o en los Convenios Internacionales ratificados por la República de Panamá. La propuesta, es interesante ya que producto de estos errores que los funcionarios que ejercen la administración de justicia, el Estado termina pagando sumas millonarias que bien podrían repercutir en beneficio de implementación y adecuación de mejor condiciones de los servicios de las instituciones estatales; al igual, que en beneficios de proyectos que aseguren una mejor calidad de vida para todos los ciudadanos cumpliendo con su propósito de defensa y protección de los derechos humanos.

DRAFT BILL No.013 OF 7 JULY 2014 ON CLEANING SERVICE AND REGULATORY FRAMEWORK AND FOR INSTITUTIONAL INTEGRAL WASTE MANAGEMENT Por: Karen Fábrega The problem of trash, toxic and solid waste, afflicts most of the Panamanian population, therefore we didn’t encounter this phenomenon only in the popular sectors, but the problem has been dispersed without distinction of social class. The general lack of awareness about our waste handling increasingly affects our health and the environment.. There are several rules governing solid waste in our country, dating from 1984, so that our National Assembly is in the process of discussing a draft bill to regulate handling of waste, in order unify existing legislation and to avoid confusion in the public about this sensitive issue.

For comments and / or queries you can write to rbcweb@rbc.com.pa - yorlenys.gaona@rbc.com.pa 29. Legislación y Economía - Julio 2014

DRAFT LAW ESTABLISHING THE ADVICE AND CONSENT PRIOR, FREE AND INFORMED OF INDIGENOUS PEOPLES Por: Lucila Rivas Guerrero

Recently presented to the National Assembly the draft law to regulate the obligation to the state to consult indigenous peoples about the impact, disruption, project duration fence to develop within the counties. This blueprint consists of 15 items and is based on the principles of opportunity and freedom. Becoming law of the Republic will be implemented through the Ministry of Trade and Industry.

MUNICIPAL PLANNING BOARD AND ITS ROLE IN THE AUDIT OF LAND Por: Anna Marissa Admadé

On July 9, 2014 was presented to National Assembly, the bill to amend the Law 6 of February 1, 2006 which regulates land use planning for urban development. This initiative intends to return to Municipal Planning Board, the authority to issue technical review required for approval of changes to the development plans by the Ministry of Housing, Land and municipalities. It also seeks to provide binding to these opinions, which must be issued by reasoned decision.

DRAFT LAW No.035 FOR WHICH PLAN IS IMPLEMENTED FOR VARIOUS EQUITY STAKE INFRASTRUCTURE INVESTMENT IN RURAL COMMUNITIES OR OF DIFFICULT ACCESS OF THE PROVINCE OF COLON Por: Maryory Ramos

The government of President Juan Carlos Varela, must fulfill a campaign promise made to the province of Colón, it consists of an urban renewal project of the city, however, deputy of circuit 3-2 Nelson Jackson Palma proposed a draft law by which an investment plan for various social infrastructures interest in rural or difficult to access in the province of Colon is implemented. This means that Central government to invest $ 500 million shouldn’t only be based in the city, but also in areas of difficult access, as the province of Colon pose optimal resources for comprehensive development in all areas due to its location, the activity of its ports, its national and international trade and the Colon Free Zone, also is one of the provinces, whose economic activities contribute more to the national treasury.

30. Legislación y Economía - Julio 2014

DRAFT No. 036 AMENDING CERTAIN ARTICLES OF THE LAW 55 AUGUST 2008 REGARDING THE MARITIME TRADE. Por: Maryshel Moreno Castro

On July 21, 2014 was presented to the National Assembly by the HD Raul Hernandez bill No. 036, to amend some articles of Law 55 August 2008, which regulates maritime commerce in Panama. The purpose is to update the rules that refer to the Public Registry for the registration of documents relating to the merchant marine, as is the Directorate General of the Public Registry of Deeds and Liens of ships of the Maritime Authority, the entity enrolling these documents. L&E

For comments and / or queries you can write to rbcweb@rbc.com.pa - yorlenys.gaona@rbc.com.pa

31. Legislaci贸n y Econom铆a - Julio 2014

COMMENT ON PRICE INDEX NATIONAL URBAN CONSUMER: JUNE 2014

Fuente: CGRP Contraloría General de la República de Panamá

onsumer Price Index (CPI) in June, compa- se in price of gasoline and tour packages, respectively. red with May 2014, showed an increase of 0.5 percent for both the National Urban and for the dis- In contrast, Miscellaneous goods and services reflects low 0.1 tricts of Panama and San Miguelito and Other Urban. percent, driven by declines in prices of jewelry and watches. Compared with June 2013, an increase of 3.4 percent in National Urban was observed; 3.3 percent in the districts of Panama and San Miguelito and 3.5 percent in the Urban Rest. So far this year, the National Urban CPI showed a cumulative increase of 2.3 percent.

Comparing the National Urban CPI for June 2014, with its similar 2013, the following increases are shown: Food and beverages 4.9 percent; Teaching 4.7 percent; Health 4.0 percent; Furniture, household equipment and routine maintenance of the house 3.2 percent; Miscellaneous goods and services 2.5 percent; TransporThe divisions that showed the greatest increase in Natio- tation 2.4 percent; Recreation, entertainment and culnal Urban CPI for June were: Food and Drink 0.9 per- tural services 1.6 percent; Clothing and footwear 1.3 cent, increase in price of soft drinks; Health 0.5 percent percent and housing, water, electricity and gas 1.0 percent. due to increase in price of medical services and nonL&E hospital paramedics; Clothing and footwear 0.4 percent, due to increases in prices of child sweater; Transport and Leisure and cultural services 0.3 percent, increa-

32. Legislación y Economía - Julio 2014

NOMINAL GDP FOR 2014 IS ESTIMATED AT US$ 47.459 MILLION

y 2014, Panama’s economy could generate a cumulative US$ 47.459 million, driven by high domestic demand, which would generate at least an additional US$ 4,810 million between Nominal GDP in 2014 and 2013, before which the administration of President Juan Carlos Varela, highlights the importance of achieving the economic growth with equity permeate the entire population.

Fuente: CGRP Contraloría General de la República de Panamá

The IMF estimates for Panama economic growth of 7.2% to 2014, that 2015 would be 6.9%, following a downward trend, as in 2013, the international body, estimated at 8.0%, which would benefit the decline in inflation in the country.

On the management of public sector, according to the rate of growth of the economy, Director of Social and Eco“Putting the country’s wealth in the service of Panamanians nomic Analysis of the MEF, Fisher said the role of the with fairness and transparency, supporting the private sec- government is creating opportunities for both workers tor and foreign investment, to improve the quality of life for and investors to create wealth, as well as offering invesall Panamanians and the Panama grows, grow for all,” is the tment projects that improve the quality of life of the pomission giving the government plan 2014-2019, to be fo- pulation, contribute to the revitalization of the economy. llowed by the administration of President Juan Carlos Varela. On the international stage, the rhythm take interest rates Data from the Ministry of Economy and Finance (MEF) indi- and balance managed to do about China’s economy itself cate that in recent years, the Nominal GDP has grown expo- may affect the performance of the economy of Panama, nentially, passing in 2000 of US$11,620.60 to US$15,464.71 factors that are not controllable by the isthmus nation. million in 2005 and closed in 2013 with US$42,648.10 million. L&E Given this economic growth in terms of GDP Real, represent an expansion 6.5% to 7.0% projected by the MEF in 2014, specialists of this ministry as Eloy Fisher, director of Social and Economic Analysis, suggest that “We priorize to bridge the social gap, based on investment and try to both capital and labor in Panama, generate wealth to maintain the growth rate at the national level.” By 2014, Panama’s economic growth of 6.5% to 7%, would exceed the rate for Latin America and the Caribbean, which is 2.5%, according to the International Monetary Fund. In this regard, Panama, the expansion of economic activity responds to the multiplier effect generated by the Interoceanic Way, the interest shown by foreign investors that turned the country into a hub for business and investment and the level of social investment, said Fisher Director of Economic and Social Analysis of the MEF. 33. Legislación y Economía - Julio 2014

ACP DELIVERY XXXI QUARTERLY PROGRESS REPORT OF EXPANSION Fuente: ACP Autoridad del Canal de Panamá

ACP SUSTAINSAT THE CABINET THE BUDGET FOR FISCAL YEAR 2014

Fuente: ACP Autoridad del Canal de Panamá

he Panama Canal Authority (ACP) puhe Cabinet Council approved yesterblished and presented at the XXXI suday the budget revenue of Panama Capervision authorities Quarterly Progress nal Authority (ACP) for fiscal year 2015 Contracts Expansion Program, in comin the amount of B/. 2,415.9 million. pliance with Law 28 of July 17, 2006. The budget projects revenues of B/. 2,415.9 The report, which contains the promillion for fiscal year running from Ocgress of works to June 30, 2014, tober 1, 2014 to September 30, 2015. was referred to the Executive, the National Assembly, the Comptroller General of the Republic and the After approval in the Cabinet Council, President of the members of the Ad-hoc Committee, created by Law Board of Directors of the ACP and Minister for Canal 28 to monitor the progress of the expansion project. Affairs, Roberto Roy, will present budget to the National Assembly where the project will meet its three debates. The overall construction progress is 76.6% at June 30, 2014. The budget of the ACP is based on projections of the At that date, contracts were completed dredging waterway income mainly from tolls transit of vesof Atlantic and Pacific entrance of the Canal; Ac- sels and others as production of water and electricity. cess Channel -CAP1 Pacific, CAP2, and CAP3 - For fiscal 2015, the budget of the ACP projects direct conwhile CAP4 recorded an advance of 73 percent. tributions to the National Treasury for B/ 966.6 million. L&E The contract for design and construction of third set of locks, the most important of the Expansion Program, registers an advance of 72 percent. ACP has complied punctually with delivery, publication and dissemination of 31 quarterly progress reports on the Expansion Program, which can also be viewed on the website. L&E

34. Legislación y Economía - Julio 2014

WORLD ECONOMIC OUTLOOK SLOW WORLD RECOVERY BUT STRONG NEEDS A STRONG SUPPORT POLICY

Global growth slowed more than expected in the first quarter of 2014, mainly due to temporary setbacks, such as the sharp correction of a prior accumulation of inventories and the effects of a harsh winter in domestic demand in the United States. But growth also disappointed in China, given that restrictive policies are applied to temper credit growth and activity in the housing market. The activity moderated in other emerging markets due to weaker external demand and a growth slower than expected investment. In the WEO Update report projected that global growth will rebound gradually disappear as time constraints and starting to gain ground recent policy measures taken to support growth. For example, in China have launched limited stimulus measures to boost demand.

Fuente: Fondo Monetario Internacional

bound to 1.3% in 2013 to 1.8% in 2014 and 2.4% in 2015. • In United States the rebound in activity is already underway, but recovery will offset only partially the result of the first quarter. In 2014 an average growth of 1.7%, rising to 3% in 2015 is projected. • The outlook for the euro area remain generally unchanged from the April WEO report, but the results will remain uneven across the region. The continuing financial difficulties and balance sheets, and a high level of unemployment, will result in a weaker growth in some economies.

• In Japan, growth is projected to slow slightly in 2015, primarily due to the planned fiscal stimulus that was previously activated in the year retreat. Emerging and developing market economies It’s projected that global growth will increase from 3.2% It is expected that growth in emerging marin 2013 to 3.4% in 2014 and 4.0% in 2015 The fore- ket and developing countries will decline from cast for 2014 is 0.3% weaker than indicated in the April 4.7% in 2013 to 4.6% in 2014, and then acceleraWEO 2014 (see table), which reflects the performan- ted to 5.2% in 2015 through increased export growth. ce observed in the first quarter and the slowest changing demand in emerging markets. The forecast for 2015 • For China an average growth of 7.4% is forecast in 2014, is unchanged relative to the WEO April and is expec- with the momentum that recent measures to domestic ted to deliver stronger growth in some advanced eco- demand printing. The growth will moderate to 7.1% in nomies offset weaker growth in emerging markets. 2015, as the economy enters a more balanced growth path. • In India, investment is expected to gradually recover Advanced Economies It is projected that growth in advanced economies will re- over the rest of the year, and that will offset the weak per35. Legislación y Economía - Julio 2014

formance of the agricultural sector in the first quarter. • It is expected that growth in Brazil will slow in 2014 before recovering in 2015, as investment and consumption continue to be affected by a lack of confidence and tighter financial conditions.

Policy implications In many countries, policy support is needed for attaining a more robust recovery with effective and stronger growth potential. In the case of the major advanced economies, the IMF recommends that a monetary policy supportive, and • In Mexico, growth will rebound in 2014-15, but the that progress in normalization of the policy will be graoutlook for 2014 is more lackluster than the April dual and different rates in different economies will WEO, owing to the delay in the recovery of the Uni- shrink as economic slack. Fiscal adjustment must mainted States and weaker activity in the construction sector. tain a balance between supporting growth in the short and medium term. Must be completed reforms of fi• Continued geopolitical tensions made strong impres- nancial regulation, and must develop and use macrosion on domestic demand in the first quarter of 2014 prudential tools to limit the risk of financial instability. in Russia. The growth has been revised downward and is expected to remain moderate during 2014-15. While priorities vary across emerging markets and developing countries, many have little room for maneuver • In South Africa, growth is likely to remain weak, in economic policy to increase growth if the downside with persistent problems in the production side. risks materialize. These economies must contain the external vulnerability, for example, allowing the exchanDownside risks ge rate to adjust to external financial shocks. Some have Continue to worsen the downside risks. The risks arising from to contain fiscal imbalances and inflationary pressures. geopolitical tensions have increased, as related to Ukraine are Finally, many advanced and emerging market and still present and new risks have emerged in the Middle East. developing economies need to implement structuVolatility in financial markets could increase if capital flows ral reforms to boost investment and growth. L&E change direction and if they increase risk spreads following a reduced willingness of investors to take risks or unexpected increase in interest rates in the long term in the United States. Risks also include an extended period of suboptimal growth due to insufficient demand in the advanced economies, or the negative effects of the conditions of financial markets in emerging economies. Some economies could also be affected by an investment remains weak.

36. Legislación y Economía - Julio 2014

LATIN AMERICAN PUBLIC SCHOOLS STUDENTS LOSE ONE DAY PER WEEK TRAINING

Each week, students in public schools in Latin America and the Caribbean deprive the equivalent of a full day of classes, according to a new World Bank report. The cause: the low effectiveness of teachers.

Fuente: Banco Mundial

Meanwhile, Jorge Familiar, World Bank Vice President for Latin America and the Caribbean said “it’s hard to think of a more important to expand opportunities for all Latin Americans element quality education” and stressed that “is difficult to think of a more important player when it comes to imBased on research that included unprecedented observa- proving the quality of education that teachers in the region.” tion of more than 15,000 classrooms in 3,000 primary and secondary schools in seven Latin American countries, the For a region that needs to improve student learning, this report, Great teachers: how to improve student learning suggests that more must be done to attract, develop and in Latin America and the Caribbean, describes how ab- motivate the best teachers. According to internatiosenteeism teachers, poor preparation, low-skill, low pay nal research, students with the best teachers advance with little school leadership and conspire against the best 1.5 degrees or more per year, while those with the worst school performance and schools. The report is a substanti- teachers can barely move curricular 0.5 years or less. ve contribution to the growing body of research on how to improve the quality of instruction and learning outcomes. These studies also clearly demonstrate that the economic and social benefits of national spending on education depends The report comes at a time when experts discuss what on what students learn and not the amount of years they to do Latin America to maintain levels of growth that spend in school. If Mexico ariseth the average performance enabled it to reduce their levels of poverty and inequali- of students in PISA tests to the German level, the long-term ty. Innovation, competitiveness, education usually ap- annual growth of GDP could increase to 2 percentage points. pear as unavoidable issue when turning on the essential economic engines for greater prosperity. However, in The report sheds light on who are the current Latin Amereviews of the Program for International Student As- rican teachers: sessment (PISA), 2012 OECD, the eight participating • Remunerative incentives are low. The monthly salary in 2010 countries of LAC are placed at the bottom of the list of was between 10 and 50 percent lower than the wages of other middle income countries-although some few, such as Chi- “equivalent” professionals, and was throughout the 2000s. le, Brazil and Peru, made marked progress in recent years. • They have a higher level of formal education as The report was presented Thursday in this capital in the Regio- other professional and technical workers but acadenal Education Solutions Forum held at the Catholic Universi- mics begin with a lower level than the general body ty, who participated in the First Lady’s Office Nadine Heredia. of students in higher education. 75% are women. In her address, the First Lady said: “In the case of Peru need to do that achieved sustainable growth and it is therefore essen- • Students who graduate as teachers come from tial to invest in human capital and capacity for innovation, a lower socioeconomic status and are more technology, research and productivity through education “ likely to be first-generation college students. 37. Legislación y Economía - Julio 2014

• The faculty of the region is aging. The average teacher in some countries has more than 40 years of age. • While many countries in the region are producing too many new teachers, it is still difficult to find qualified teachers to teach high school level math, science, and high-quality bilingual teachers (Spanish / indigenous language) in rural areas. “Virtually all countries in the region seem to be stuck in a low-level equilibrium, with a low level of demand for entry to teaching, and undifferentiated relatively low wages, poor classroom instruction and poor educational outcomes,” said Barbara Bruns, author of the report “Achieving a high-level equilibrium is difficult but it is a goal that the region can’t afford to postpone.” At a time of reduced public resources, the report represents a contribution weight in identifying where to assign priorities. One of his most notable findings was that teachers in countries with greater investment in initiatives like “One Laptop per Child” actually spent the least time class to using information technology and communication. The future challenges for the region are mixed. In the next ten years, the steady decline in the size of the school age population in about half the countries in the region, especially in the Southern Cone, could greatly facilitate the task of raising the quality of teaching; in the other half of the region, especially in Central America, the need for more teachers will make this more difficult to achieve. The good news that gives us the report, however, is that most countries are focusing on the quality of teachers. It also analyzes the evidence from international research and the most recent regional experience with innovative programs and major reforms in three priority areas: • Policies to recruit better teachers. • Programs to prepare or develop the skills of those practicing teachers. • Greater incentives to encourage the best possible performance, something that over time will become more attractive and targeted to their profession. By analyzing the design and implementation of major education policy reforms in Chile, Peru, Ecuador and Mexico, the report mentions the key role of teachers’ unions, the value of reaching consensus solutions and how to achieve broad support from civil society , which has served to underpin successful and sustainable reforms. L&E 38. Legislación y Economía - Julio 2014

NEW GOVERNMENT EDUCATION CHALLENGES IN PANAMA

Education has always been a determining factor in our society, influencing the advancement and progress of our students; so the new government has major challenges to public education in the country is concerned.

Alexander Canto archivo2@rbc.com.pa

transformation challenge initiated by the previous administration, which involves updating and renovating technical pedagogical approaches, schemes, methods, content and teaching methods, consisting of a new curricular paradigm and profound changes in the processes of teaOne proposal is to convert the bilingual education there- ching and learning. This process requires continuous fore implies methodological, curricular and organizational monitoring short and long term, as the main purpose is changes in the educational structure. The Minister of Edu- to provide better quality education, and support a cucation assigned, Marcela Paredes, will face the challenge rriculum developed with the participation of all staketo improve the supply and quality education, offering our holders, as well as incorporating the teaching process. students an education based approach in the development of competencies and thus acquire the best preparation for MEDUCA should continue this process, which has a sethe challenges of the global world which will have to cope. cond phase, where the senior students learning assessed. Likewise, you should also consider other aspects Importantly MEDUCA initiate a training program for such as models of schools projects that are under consteachers of English, confirmed by the President of the Re- truction and the process of accreditation of schools. public in his first day in office, stating that there will be a complete transformation in the Panamanian educational It is important to mention that during the last five years, the system. Besides this, it has raised some teachers choo- relationship between teachersâ&#x20AC;&#x2122; unions and MEDUCA has not se to send abroad for training in the English language. been good, so it will be up to the minister Paredes, reset again this relationship for the benefit of all students in our country. With this new implementation, the government seeks the 800,000 students who are about the education system, with at The issue of education is broad, with many factors that least an intermediate level of English to finish the 12th grade. in one way or another, influence students engage because our education system has many limitations that We must not forget that there are difficult areas throug- directly affect learning, impacting our apprentices. hout our country who do not have the means for classes; Emphasizing this, education in Panama still presents then we wonder what will be the solution of the govern- problems as it does not have the means necessary to enment to implement bilingual education in these remote sure that all students receive a quality education, to be areas and train the teachers who work in them, so that competitive, to develop specific skills; like to stay ahead these students have the same opportunities on equal foo- of the technology that is demanding the XXI century. ting with students from the city and downtown areas; and therefore they can be part of this transformation, which We conclude by saying that it is a real challenge facing the will be implemented from August, as noted MEDUCA. new government administration, as it speaks of a complete educational transformation, however, nationally On the other hand, not least is the issue of curricular there are schools in disrepair, schools and colleges whe39. LegislaciĂłn y EconomĂa - Julio 2014

re they do not have electricity, updated books , teaching resources, without labs and English; multigrade schools where teachers do lack, among other problems; and for all proposed changes must seek a definitive solution to the problems afflicting the entire student community. As a recommendation for solving some of the problems mentioned above, seeking higher education and better quality would be high qualification and training of all teachers who are part of the educational system and their continuous training, technology, knowledge and pedagogy, because at this time the changes are given in a rapid manner; taking competitive educators in all areas and so our students acquire and develop the necessary skills. Drawing on bilingual education, apart from the training of teachers in the English language, the Ministry of Education should implement bilingual curricula, a complete transformation in the curricula, programs and books, based on the approach of a new system education in the English language. Focusing on this view, should go together with the conditions, specifically infrastructure, educational institutions to develop a comfortable learning environment, therefore MEDUCA should build throughout the country schools with all the means; and provide each of them with the necessary equipment and materials to carry out quality education, in conclusion invest more in education nationally, running educational innovation projects, to promote science, technology, knowledge, since education is the foundation for both personal development and employment in our society tool. L&E

40. Legislaci贸n y Econom铆a - Julio 2014

Mariela de Sanjur mariela.sanjur@rbc.com.pa

ACTIVITIES OF JULY “Arts in the Plaza, Party Music” July 9, part of the artistic season Strings Group A6 is an arts and cultural event that takes place at Cathedral Square in the Old Town of Panama City.

The Office of the First Lady held at the Cultural and Recreation Park Omar on 19 and 20 July, the day of the boy and girl in Panama

Pollera Festival was held on July 22 in the City of Tablas, Los Santos province.

19 y 20

National Handicraft Fair from 30 July to 4 August at the Convention Center Atlapa.

ACTIVITIES OF AUGUST

Museums

MAC Contemporary Art Museum: Exhibition Traces of a Historic Canal Expansion Entrepreneurship

Interoceanic Canal Museum of Panama: Panama Historical Exhibition Vision through Photography 18602013

weekends

Theatre The Our Daily Sex, Teatro La Cuadra 1 to August 31

1 to 31

100% Panamanian musical melancholy, from 4 to August 31 at the Amador Theater

4 to 31

41. Legislación y Economía - Julio 2014

Pre-opening Biomuseo, Friday from 9:00 am to 4:00 pm, weekends from 9:00 am to 5:00 pm come to know him before the rest of the world.

Romeo and Juliet, The Musical, National Theatre

And they lived happily !! Teatro la Cuadra

7 to 9 12 to 31

FAIRS AND FESTIVALS X International Book Fair to be held in Panama from 19 to 24 August. Don’t forget to visit the Museum of Frida Kahlo in the Children’s Pavilion Ocueño Manito Festival from 11 to 14 August in Ocú

VARIUS Salsipuedes Rally –Contra Punto Atribal August 2 from 5:00 to 10:00 pm and enjoy 50 challenges in 3 hours.

RELIGIOUS

The Archdiocesan Campaign from Sunday July 21, being delivered every house, the piggy bank Panama Gastronomica 2014 from 29 to 31 August that offers each person a wonderful opportunity to be caring and responsible with the work of the in the Convention Center Atlapa. Catholic Church. III Central Percussion Festival August 30, Ateneo August 28 Day of St. Augustine City of Knowledge Wine Beer Festival Panama Megapolis Convention Center August 7-8 Multicenter

CONCERTS Franco De Vita in Panama, Wednesday August 13, Arena Roberto Duran. Enrique Iglesias on his tour in Panama 2014 “Sex and Love Tour” August 28, Figali Square.

HISTORICAL

August 15 is celebrated the 100th anniversary of the opening of the Panama Canal. August 15 celebrates the founding of Panama La Vieja

WALKS AND RUNS

XV Susie Thayer Walk will be held on August 25 simultaneously in 8 cities: XXIX Youth Orchestra Music Camp 2014, presen- • Panama City: starting from the Coastal ted on August 8 at 8:00 pm at the Ateneo in the Strip City of Knowledge in Clayton. • Colon Youth Park • Plaza Italia La Chorrera • December 8 Penonomé Park • Union Park Chitre • Parque Juan Demosthenes Arosemena Santiago • Bocas del Toro Square Changuinola • Aguadulce Park October 19 • David Park Cervantes

42. Legislación y Economía - Julio 2014

LATIN AMERICA IMPROVED IN WORLD CUP

A few weeks of having completed the World Cup Brazil 2014, we noticed that there was a significant advance in the Latin American teams, eight of which have qualified for the second round such as Brazil, Mexico, Chile, Colombia, Uruguay, Costa Rica, Argentina and the United States.

Albin Rodríguez albin.rodriguez@rbc.com.pa

Keylor Navas imposed on the Tica and Sergio Romero of Argentina team. His great performance was crucial for Germany was boosted with his fourth World Cup.

Golden Boot Award to James Rodriguez: The Colombian striker became the top scorer in the World Cup Brazil 2014 and received the Golden Of these eight teams which caused more sensation Boot for the six goals he scored throughout the was the Colombian team with his good football tournament. He ended the match between Gerand dynamics; the Chilean team also showed guts many and Argentina, James Rodriguez reaffirmed and strength to make a good world, leaving the its status scorer in World Cup, as it was the expecselection of deleted Spain team to beat in their tation that German striker Thomas Muller, who group. Likewise, the Argentina team, despite hacame within a goal of spending Brand Colombian ving reached the final of the tournament, showed striker. a cautious football; the rest of the Latin American teams also showed us a high standard and football Award for best player in the world Lionel Messi: performance during the World Cup. Despite losing the final against Germany, FIFA Lionel Messi honored with the Golden Ball, in By CONCACAF area the selection was further a decision that divides public opinion and the escalated team Costa Rica, leaving power as sports media. The Argentine forward beat other England, Italy and Greece, reaching the quartercandidates such as Thomas Müller, Mats Humfinals, being eliminated by the fateful penalty mels, Neymar, Arjen Robben or James Rodriguez. shootout against the Netherlands national team. Fair play award for selecting Colombia: Who On the other hand, between individual awards gi- showed a clean game, committing few fouls and ven at the end of the tournament, we can mention accumulating a minimum of cards, the Colomthe following categories: bian national team won this award, even when a player Colombia striker injured the Brazil, NeyAward for Best Goalkeeper Manuel Never: Goamar. lkeepers German FIFA awarded the Gold Glove With this it is shown that Latin American teams 43. Legislación y Economía - Julio 2014

were superior in individual awards, taking three of the four awards.

Except for Brazil in three positions and the United States a position, if the other teams had a good climb.

It is worth noting the positions they occupied before and after the World Cup teams in Latin America in the FIFA rankings:

The last World Cup has left good results as far as the transfer market is as renowned international clubs have recruited several players, excelling Latin Americans who were previously not as well known globally as the Colombian James Rodriguez, who has been signed to the Spanish team Real Madrid for a fee of € 80 million and goalkeepers David Ospina for English club Arsenal 4,000.00 million; also the Chilean goalkeeper Claudio Bravo, also for the Spanish team Barcelona 12 million euro, Brazilian David Luiz for French club PSG for 40 million and Luis Suarez to Barcelona team by 65 million euro.

POSICIONES

COUNTRY BEFORE Brasil Colombia Uruguay Argentina EEUU Chile México Costa Rica

4 5 6 7 14 13 19 34

44. Legislación y Economía - Julio 2014

AFTER 7 4 6 2 15 12 18 16

Other major signings are confirming that they have not yet materialized, as in the case of players Keylor Navas Costa Rica goalkeeper and Guillermo Cuadrado of Colombia selection, among others. L&E

CURRENT TRENDS

Nadia Chang rbcweb@rbc.com.pa

Dress Pants, Casual and famous Jeans

The trend for this year 2014 dress pants with a straight cut rather tight; however, some designers have opted to change this trend a bit and have included in their collections somewhat less baggy and hip and higher waist pants. Pants without pleats remain strong this season, although there is some indication that the folds can again take hold, however I think it will take some still say they will be back in fashion.

45. Legislaci贸n y Econom铆a - Julio 2014

Also still very fashionable casual pants colors, red, orange, turquoise, moss green, lime green, yellow, prints, etc, these colors give a fresh, modern look to your wardrobe and not old, is a matter of daring and adapt our styles with appropriate combinations of shirts. As for the Jeans for youth follow the Slim Fit, but for a more adult audience find classic straight cut jeans, without being baggy or narrower, in the midst of these, and there are a range of options, pre washed, vintage, solid dark, medium and light blue classic, well many varieties, styles and cuts, which adapt according to our body and also very important to the occasion, and depending on location, and occupation. For advertisers is very comfortable to wear wore jeans, etc to go to work, however if you are not in that environment, you should not go to the office with that kind of jeans, you can use perfectly solid jeans of any color, perhaps with wash a little, but not much, they are perfect for use with sports jackets, for travel or for a casual Friday at the office. Pants was called “chino pants”, “is the casual cotton pant, like dress, all fabrics of soft cotton, these are very fashion in classic colors and vibrant color, navy blue, cobalt blue too blue, camel, gray sand, brown. these pants are perfect for our climate to be cotton and despite being casual look more formal than jeans, you can also combine perfectly for use with sports jackets to go to the office on Thursdays or Fridays, as well as for travel. The theme of the pants is according to our profession, style and body, most of the time are repetitive in our selections, but I invite you to explore new textures, colors and styles, this will give a different touch to our wardrobe and hence our image. We all seek at some point a change and we often say to ourselves I want to do something to change, so dare to change a little your look with a different trousers which usually would buy, without missing that you should use what you feel good and comfortable with yourself, but changes are always positive and I am sure that with the proper help can include some styles of pants you have mentioned and shall renew your image !!! Next month our article talk about trends for this season Ties.

L&E

46. Legislación y Economía - Julio 2014

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