Magazine L&E October 2013 by Revista Legislación & Economía

Áreas de Prácticas Impuestos Contratación Pública Propiedad Intelectual Registro Sanitario Litigios, Arbitraje y Mediación Derecho Marítimo

Colaboradores en esta Edición

Abanderamiento de Naves Derecho Laboral Asuntos Migratorios

José Javier Rivera

Sociedades

Jorge Luis Pitalua

Apertura de Negocios Fundaciones de Interés Privado

Rafael Fernández Lara

Contratos, Fideicomisos

Ana Graciela Méndez

Asesoría Bancaria

Giovana del C. Miranda

Asesoría Bursátil

Lucila Rivas

Servicios Notariales y Registro

Maryory Ramos

Ambiental Leyes Antimonopolios

Maybé Mendieta

Telecomunicaciones

María Martínez Mariela De Sedas de Sanjur CONSEJO EDITORIAL

José Javier Rivera

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

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Edición - Octubre 2013 Legislación y Economía es una publicación de Rivera, Bolívar y Castañedas, que tiene el propósito principal de mantener informados a nuestros clientes, empresarios, industriales, ejecutivos, banqueros, inversionistas, y a todo aquél que tenga interés en los temas que publicamos. Nuestras oficinas se encuentran ubicadas en Calle Aquilino de la Guardia, Urbanización Marbella Torre Banco General, Piso 9 Apartado 0819-08632 Tel: (507) 397-3000 Fax: (507) 397-3009 Panamá, República de Panamá

Contenido

Editorial The role of Police in the rule of the law.

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Invited Writer Appraise property values or increased tax management

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Norms of interest Commerce law in Panamá is regulated. 500 years: Discovery or sighting of the South Sea.

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Reforms to penal code to typify thefemicide and sanctions the facts of violence against woman. Pág.14 Refugees and asylees can apply to a definitive permanency in the country. Pág. 16 Place of fulfillment of preventive detention is modified. - Grant extension for filing transfer pricing report. Resolutions approved for tax information exchange. - Increased penalties in case of theft of public goods Central American strategy of rural development.

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Consult, Doctrine and Jurisprudence Polygraphical examination as tool inside managerial and Judicial World

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The Second Room of penal, applies procedure that regulates request extradition in the Penal Accusatory System.

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Polític November 3rd - Date of renenbrance for Panamá.

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Lssons of Siria for Panamanians. Panamanian Economy Preliminar report of ANIP´S income. Comment on consumer price Index Nacional Urban: September 2013.

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Index of Economic Activity January - July 2013.

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Management Training Program of Intellectual Property.

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Latin American Economic Outlook

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Environmental Capsule There diminish the limits of the Protected Area: Chame´s Bay.

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Protection Bay wetlands.

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World Economy

Cultural Capsule Beauty and The Beast Activities for the months of November and December. Sports Capsule Justine Bieber took the seat of red tide.

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THE ROLE OF POLICE IN THE RULE OF LAW José Javier Rivera - Abogado

jjrivera@rbc.com.pa

In recent days, public has been shocked by an incident in the area of San Carlos, Province of Panama, where the National Police implemented a checkpoint in an investigation in which agents from the Police Investigation Division (DIP) according to sources of the institution seeking a highly dangerous fugitive who had escaped from prison. The vehicle driven by a person from India, received multiple gunshot wounds that caused the death of a 2 year old boy and a 15 years girl. Both the National Police Director July Molto, and the head of homicide unit in western Panama, attached to the Assistant Attorney Office Rafael Baloyes have exposed publicly and conclusively that police officers involved in the measure of monitoring and surveillance, clear faults incurred procedures and, therefore, were charged two of them as they were able to determine the trajectory of bullets that are contrary to police procedure manual, particularly Article 31 of Law Police Organization, which states that officials can only use deadly force in defense of the lives and safety of others and their own. Furthermore, Article 135 of Executive Decree 204 of September 3, 1997 designated as a serious offense against a citizen or shoot fleeing vehicle without following established procedures. However, in the case under examination is that under Article I of the Act 74 of 2010, Panama was created in a jurisdiction or aberrant privilege for members of security forces which notice of termination, grievance, complaint or proceeding for the alleged commission of a crime while on duty performed or duty, as is the moves this editorial, although mediates the use of force, that is, to have made this vehicle shot, you can’t order preventive detention, even

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the temporary suspension of public office that these units play until the process is completed by writ of execution, ie using their resources under the law and the Constitution. Furthermore, while the process is in progress these members of the security forces have administrative assignments within this entity, outside the area where incident happened. This provision is contrary to the present acting of the Public Ministry, which has sought to bring these agents of National Police to the ordinary courts, which if sustained, provoked a absolute nullity of the process. The Attorney General’s Office, who was the person who introduced this legislative initiative can’t pretend to act against their own actions, arguing that in this case there will be no privileges when the privileges are prior to the event and its non-compliance nullifies these measures are intended to test erratically. But it must be remembered that according to Article 310 of the Constitution of our country, there is a prohibition of having army and contrary to what has been done from Martin Torrijos government, special police services to protect the border and territory of the Republic can only temporarily organized by the threat of external aggression. We make this statement because both the State Border Service and the Aeronaval Service have been called becoming permanent estates, under the Ministry of Security, created during this administration, contrary to what is expressly stated in Article 310 of the Constitution and have physical presence in riots in the provinces of Bocas del Toro and Colon, repeatedly violating the aforementioned article. Recently, was created the National Institutional Security in Ministry of Education and it is noteworthy that in the fourth arti-

cle of this Directorate was established to coordinate functions consistently with the various levels of state public safety, such as SPI, SENAFROT, SENAN and National Police, which was another violation of Article 310 of National Constitution. As if weren’t enough constitutional violations in recent years, National Police and the estates as SPI, SENAN and SENAFROT have made a real military deployment during the days when we commemorate national holidays, exhibiting combat harness, with painted faces, in open defiance of civilian population, with extreme complacency of the Executive, unless Minister of Education has expressed its condemnation of this reckless military deployment. For many years, the community has expressed total repudiation against this militarist desire started in Martin Torrijos government under the aegis of the Minister of Government and Justice Daniel Delgado Diamante and now reiterated and expanded in this government with the active participation of José Raul Mulino. Indeed, these days the Constitutional Court of Colombia, declared unconstitutional 02 Legislative Act of 2012, which amended the rules governing the so-called Constitutional “Military Criminal Jurisdiction” means the Judgment C-740/13 (October 23). The content of this failure we have in our magazine in Section Consult, Doctrine and Jurisprudence. In the end, this tragic event that affects a humble family of foreigners, should cause a profound change in our legal system, and remanded to the National Police as a whole, with the express provisions contained in Articles 310 and 311 of the Constitution and repeal Article 1 of Law 74 of 2010 which creates an aberrant immunity to this institution. In the same vein, and from the point of view these services budget should get permanent as SENAN and SENAFRONT which according to the Constitution may be organized

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only temporarily and with threat of external aggression. As mentioned just two months ago, it’s not conceivable that in the rule of law, as a whole, the budget of the judiciary, the prosecution and the Institute of Legal Medicine and Forensic Sciences are ridiculous opposite leafy Ministries budget Security and government, as weak democracy like ours need solid institutions and Administration of Justice and the Attorney General. Contrary to most elementary principles of institutional balance, the true fact and recent needlessly increase the recognition of allowances and other emoluments to commissioners and deputy commissioners of the National Police, who receive salaries equivalent to ministers and deputy ministers and retire with a service delivery just 25 years when ordinary pensions in the country are women at 57 years and men are at 62 years. Dawn and see...L&E

APPRAISE PROPERTY VALUES OR INCREASED TAX MANAGEMENT Jorge Luis Pitalúa García rbcweb@rbc.com.pa

The Valuation of real and personal property is as old as the existence of the human specie, arises from the moment man made his first tool, mainly by creating value to it, for its usefulness. Since Aristotle, whose thought marked much influence in the Middle Age, which stated that economic activities were subject to ethical estimates. That is, was viewed as lacking moral right to sell a higher price than its real value. It is in this period that established the concept of value as a ratio that measures the significance of things or services that are demanded in exchange for other items or services. In the field of urban economics, due to economic and physical growth of the same, for various reasons, it is imperative to identify and determine both the impact as the changes in value of land and buildings. In this growth underlies the need for valuation methods to analyze and provide objective application of the various techniques available in this area. Thus, learning and applying these techniques in the valuation of real estate is critical conceptual and social practices within both the prosecution and the private. There is no doubt that actually, importance of the valuation of all types of real state property is unquestionable. Modern societies support a large number of financial and tax processes based on the value of goods involved. These values are used in a large number of processes including highlights, civil, partition inheritance, buy and sale of properties, mortgages among others... and in government the Property Valuations with tax purposes. 8. Legislación y Economía - Octubre 2013

It’s therefore crucial asset valuation in any country, higher the growth, economic activity becomes more intense, for which it requires a valuation of those assets based in proceedings which meet international standards adapted to reality of each country, away from distortions and subjectivity of appraisers or valuation companies. The faculty to perform mass appraisals by the Ministry of Economy and Finance is something that no one disputes, because it is within its competence as established by the Tax Code. Still, in recent mass appraisals being conducted by the current government through the Ministry Economy and Finance say, because according to the laws that have been created for the implementation of such appraisals and, experts say lawyers, there are many gaps in the function of each unit established regarding this program, (ANATI; DIRECTION OF PATRIMONIAL GOODS; LAND REGISTRY DIRECTION), that the jurisdiction of each of these entities is unclear and confusing for the reconsideration processes and appeals that by law corresponds to each taxpayer. The purpose of present written is to point out some discrepancies or inconsistencies found on technical and legal appraisals for properties valued massively companies contracted for this purpose. Not go into detail of each appraisal, however inconsistencies we refer to as the standard and method applied. First let’s look at the scope of work requested by the “Tender Brief by Best Value” in the specification that states... “Perform appraisals for estates in the line allot-

ted to the Contractor and sustain reporting to the Directorate of Land Registration of Ministry of Economy and Finance, which must break down the value of land and property improvements to upgrade its Cadastral Value... (I highlighted in bold and undrlined added).

CONCLUSIONS:

• As we have seen in the brief tour we’ve done on procedures used by the MEF, for the allocation of new cadastral values. We can infer that the processes suffer from sustainable technical criteria to serve as references In this case note that only asks sustain that value for updating values as a basis for calculating to the applicant entity, ignoring the Assessment taxable taxes Real Estate in the treated areas. taxpayer, ie taxpayer or owner, giving the right by law assists taxpayer receiving a detail of the pro• Further regulation requires reliable techcess carried out to estimate the value of property. nical criteria subjectivity away from existing inIn the specification states that to esternational standards and, finally, its application timate the land value should use the to properties located in areas decreed for mass Comparative Method Market Data. appraisals. Thus a better appreciation, motivation and justification becomes imperative, deriBy analyzing some of the reports and notified ved from the principles of tax law and objective some of the contributors, this method hasn’t been performance of the responsible Administration. applied, only appears the unit value obtained, not detailed how it was obtained and what is more • The other important component of the worrying, is applied indiscriminately to almost all update of land value, plus tax management, is property located in the sector or squares without true and accurate identification of real estate in considering the individual characteristics of each coordination with relevant institutions. But even batch as size, shape, area code as existing Zoattached to the purely fiscal, it’s necessary and ning among others... This is supported by the fact imperative to establish an objective basis, unithat this method sets the Setting for each case. form and away from subjectivity and mercantile speculation. It should be based on measurable Regarding improvements, is the same. The scotechnical criteria, in order to define value of real pe states that you should use the “Cost Method”... estate, ensuring fairness to taxpayers generally however, for the cost method values should be applied to all and not to specific sectors, giving set based on the principle of replacement or privileges to some and increasing the tax bursubstitution, ie what it would cost to replace an den others, that lights unconstitutional vices. asset with similar characteristics in order to vaThe author is an architect and accredited Apluation. This should be compared prior analypraiser by the Pan American Federation of Apsis, buildings with similar characteristics whose praisers (UPAV). And Ex-President of the Insdirect and indirect costs plus a reasonable profit titute of Valuation and Surveyors of Panama is known as constructive practices of contracand Professor of Appraisers Diplomate, at the tors, and the value resulting estimate has been to Santa Maria La Antigua Catholic University. apply the depreciation. In conclusion there seems L&E to be confusion in the method of comparative cost and market data would be being applied, contradicting requested in the request sheet.

SECTOR X

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COMMERCE LAW IN PANAMA IS REGULATED Maybé Mendieta - Abogada maybe.mendieta@rbc.com.pa

BACKGROUNDS:

aw No. 51 of July 22, 2008 is to establish the regulatory framework for the creation, use and storage, in the territory of the Republic of Panama, to:

-Documents and electronic signatures. -Registration process and oversight of service providers technological storage of documents and certification of electronic signatures. On the other hand, establishes a regulatory framework for commercial transactions conducted via Internet, specifically in terms of the conditions of validity and effectiveness of contracts, exchange of information and sales documents, electronically. Note that due to the latest changes in law governing this matter, we have two (2) regulations, competition separating the registration and use of electronic signature of the activity Documents Storage Technology and use Internet for electronic commerce. The above laws are: a. Law 51 of July 22, 2008, “That defines and regulates electronic documents and electronic signatures and storage services technology certification documents and electronic signatures and adopts other provisions for the development of electronic commerce.” b. Executive Decree No. 40 of May 19, 2009, “Through which regulates Law No. 51 of July 22, 2009, which defines and regulates electronic documents and

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electronic signatures and storage services technology of documents and certification of electronic signatures and adopts other provisions for the development of electronic commerce.” c. Law 82 of November 9, 2012, “That gives the Public Registry of Panama attributions of certifying authority and root register of electronic signature for the Republic of Panama, amending Act 51 of 2008 and adopts other provisions.” It should be noted that Law No. 82 of 2012 provides for the terms electronic signature and qualified electronic signature. The electronic signature is confirmation by a person who is intended to suggest that the information contained in a data message or electronic document is actually reliable , real and valid, in turn, allows qualified electronic signature to give messages data or documents to be sent by electronic means, legal validity, due to the purpose that boasts of being able to identify the sender of these, by a single certification, placing the recipient in a state of security of the origin of such messages or data electronic documents, so that the certificates for issuance of a qualified electronic signature shall be issued pursuant to the procedures and authori-

zed persons, as well established by Law No. 82 of 2012, provided that the entity responsible for certifying, pay and provide electronic signatures is the Public Registry of Panama, through National electronic Signature, and who it delegates to carry out this provision of service. With enactment of Executive Decree No. 684 of October 18, 2013, published in Official Gazette No. 27,401 of October 23, 2013, regulates the issues related to the procedure for registration and renewal, providers of certification of qualified electronic signatures, the assumptions entail cancellation of registration as well as obligations and respect to evaluations, audits and compliance with the sanctions that may be subject these service providers certification. In this sense, we turn to the most important elements of this regulation.

The National Electronic Signature of Public Registry of Panama will be the responsible authority for regulating the activities of certification service providers, qualified electronic signatures and qualified electronic certificates and determine violations and impose penalties and fines for as stipulated in the Act. With regard to registration of certification service providers, the National Electronic Signature of Public Registry of Panama, DNFE, keep a register in which shall contain the following information: Number of decision granting registration. Name and address of certification service provider. Address, number Taxpayer Registry (RUC). Name of Legal Representative. Telephone, website domain and email address. Insurance Company has contracted with the insurance policy required by the Act and policy number. Similarly, this regulation contains the requirements of the DNFE to perform activities of the certification service providers, namely: 1. Power and application by counsel. 2. Memorial expressly accepting such application electronically as a form of communication. 3. Public Record Certification. 4. Satisfactory outcome of an audit of systems and procedures by an auditor approved by management. 5. Documentation that certification service provider meets minimum requirements of public key infrastructure, teams of people, physical infrastructure, technology, security systems and procedures established by the obligations of certification service providers and any technical regulations issued by the Directorate. 11. Legislaci贸n y Econom铆a - Octubre 2013

6. Certifications acquired for their activities and certification of devices used to demonstrate compliance with recognized international standards. 7. Certification Practice Statement in accordance with the provisions of Article 24 of Law No. 51 of 2008, by the Department or this Decree. 8. The data, including Internet domain name and information to the public, that establish communication with service provider. 9. Documentation to hiring a liability policy contract and out of contract with an insurance company authorized by the Superintendence of Insurance and Reinsurance of Panama. 10. Proof of payment of registration fee to the Direction. As for procedure to be followed by the DNFE for recording certification service providers provides as follows: In the event that service provider is the private sector, the Department will send, within sixty (60) days, application relating to the Independent Technical Committee, who shall have one (1) month to rule on it , whether or not recommending the applicant. Later, return all documentation with assessment to the Department to proceed to issue a decision shall within thirty (30) business days. In the event that service provider is the public sector, the Department shall within ninety (90) days, to evaluate application and issue the corresponding resolution. The procedure described above allows a correction of the standards or requirements set for execution of the activity of certification service providers for which outlines terms within which may be carried out and submitted corrections. These regulations came into force from the day following its promulgation, ie from the day October 24, 2013. With Executive Decree No. 684 of October 18, 2013 has been adjusted one of the most important aspects of this legislation, certification service providers, this service that validates, provides security and certainty to electronic documentation used for effectiveness of contracts, among other documents used in the development of electronic commerce.

500 YEARS: DISCOVERY OR SIGHTING OF THE SOUTH SEA

Lidia Tribaldos lidia.tribaldos@rbc.com.pa

“

Discovery or sighting” depends on who tells the story, so begins the famous Colombian philosopher and historian Diana Uribe, founder of the House of History, Forum organized by media, institutions and companies in Panama, in honor of the celebration last September 25, 2013 , the 500th anniversary of the discovery of the South Sea, by the navigator, explorer and Spanish ruling Vasco Nunez de Balboa, who comes for the second time to our lands, as a stowaway on the issue of student Martín Fernández Enciso, headed to San Sebastián de Urabá, ranging from Panama to Colombia. For Spanish explorers is a discovery, while for those who already inhabited this continent only about a sighting.

net, while development is initiated by the people of the continent, ending with the independence and capacity of the countries of America. Knowing the road that links the Atlantic to the Pacific, it opens up to a route which for years was rushing in the Camino Real, then by water and land on the Camino de Cruces, rail and water finally the majestic Panama Canal. Panama stands out through the history of trade in the Americas and therefore in the world, since the routes used by Europeans, for marketing in America, in products ranging from silk, to the known spices, have in this new route (Pacific) a new option that reduces distances and thus lowers costs.

This old sea, dubbed the South Sea and serves to interconnect maritime nations and peoples, places our country in an important place on world map, to the dawn of last 500 years, the Pacific Basin, is one of the most dynamic economic regions in the world. In past 50 years, region has undergone major changes, highlighting the emergence of industrialized countries like Korea, Taiwan, Hong Kong and Singapore. This is the case of Japan, which plays a key role not only in terms of techFrom this moment, Panama becomes a must for tra- nological innovation, but because has significant invesde. In the eyes of the world the existence of Pacific tments to promote structural adjustment and technoloOcean, allowing geographically defined as our pla- gy and have significant participation in our economies. 12. Legislación y Economía - Octubre 2013 The old Pacific Sea, dating back millions of years, was a little before noon on September 25, 1513, from mountains of Chucunaque river discovered and christened with all rigors and South Sea. Clearly, an event that changed the fate of the Isthmus of Panama, and that leads to the Spanish crown to appoint Balboa with the title of “South Sea Advancer and Governor of the Province of Coiba.”

Also articulated the region are Australia, Canada and New Zealand, with regional agreements since 1983, benefiting from the trade and being recipients of capital investment and migration flows from southern Asia. The arrival of the FTA, highlights the importance of our location as an important point in the Pacific. Panama, is as observer block the Pacific Alliance, composed of nations like Chile, Peru, Colombia and Mexico, since its founding in 2012, aiming at trade liberalization, focusing on a population of 209 million people. The sums of economies of the four states of the bloc, second user becomes the Panama Canal, after the United States, which leads us to provide a platform for multimodal transport for the development of Alliance. To become full members of the economic block we have signed trade agreements with each and every one of member countries. In that sense, Panamanian negotiating team, recommends “flexible” standards, seeking admission to culminate block once negotiations with Colombia and Mexico. We can’t overemphasize the importance of this date, especially in these times when Panama makes its way to an era of economic growth that puts this country as one of the fastest growing economy in Latin America at a marked development and in technology and infrastructure. Not to mention that we are a country that offers the conditions of stability and security they need to thrive investors one your future projects. The conference leaves us with a reflection on historical importance of the role of our country as peaceful path and all that goes with this discovery including cultural, while recognizing our privileged position, that the remains of Latin American countries recognize Panama has had the joy of possession as an important point in the Pacific. Very despite plans to make another channel to cross from one end to the other, to the Panamanians did not seem to take away the dream, and we are backed by a 100 years of experience and a history as a transit route as crowded as 500 years ago when the Spanish embarked on this great adventure joined with Aboriginal people in our isthmus. L&E

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REFORMS TO PENAL CODE TO TYPIFY THEFEMICIDE AND SANCTIONS THE FACTS OF VIOLENCE AGAINST WOMAN Lucila Rivas - Abogada lucila.rivas@rbc.com.pa

Against Violence on Women (CONVIMU) states the purpose for which it was created and member institutions such as: a. The National Women’s Institute. ecently passed Law 82 of October 24, 2013, b. The National Council of Women. which adopts preventive measures against c. The Judicial Branch Unit Access to Justice and violence on women and reform the Penal Gender. Code to punish femicide and violence d. The Public Ministry. against women. e. The Institute of Legal Medicine and Forensic The Law 82 consists of XIII integrated Chapters of the Sciences. following way: f. The Ministry of Government. g. The Ministry of Social Development. 1. Chapter I, refers to general provisions, said the h. The Ministry of Health. primary objectives of the Act, as well as a breakdown i. The Ministry of Education. of terms for the purposes of application of the same. j. The Ministry of Labor and Workforce Development. 2. Chapter II, mentions the guiding principles of k. The Ministry of Public Health. this Act, such as responsibility, integrity, autonomy, l. The Ombudsman’s Office. coordination, differentiated services, income equality, m. The University of Panama. equality of respect and non-discrimination. n. The Association of Municipalities of Panama. o. Organizations of civil society women who are 3. Chapter III, refers to the rights of women in active with verifiable track record in defense against general, also those who are victims of violence. violence and promoting women’s human rights, expressing their interest in writing to the National Insti4. Chapter IV discusses the obligations of the tute of Women, upon notice and fill the requirements State on the issue of domestic violence. as determined by the Act and its regulations. Additional to the previous thing in this chapter the 5. Chapter V, creates a National Committee responsibilities of the CONVIMU are established.

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6. In Chapter VI there are established public policies of awareness, prevention and attention and it indicates the coordination that must exist between different institutions. 7. Chapter VII gives the Criminal provisions as: a. prison b. Weekend arrest c. Day-fines d. Multidisciplinary Therapeutic Treatment Adding Article 62-A establish what the multidisciplinary therapeutic treatment is about, as one “who is an intervention program for diagnostic evaluation, psycho-educational intervention and evaluation of program effectiveness and monitoring, structured according to the criminal offense, made by qualified professionals, skilled and accredited in behavioral science and clinical psychiatry and psychology, with collaboration of social work and mental health nursing, aimed at changing attitudes, beliefs and behaviors of the aggressor. “ Article 132-A, is typified a woman’s death as follows: “Whoever causes the death of a woman in any of the following circumstances, shall be punished with twenty-five to thirty years in prison. 8. Chapter VIII reform the Second Book of Penal Code in two parts, the first is concerning the breaches of sanctions measures and establishes who incurred them and in the second part sets out the procedural rules that must be followed. 9. In Chapter IX are created Prosecution and Specialized Courts. 10. In Chapter X establishes the forms of care that women receive, victims of domestic violence during the process. 11. It is important to note that in Chapter XI refers to repairing the damage caused to the victim. 12. Chapter XII the budget assigned to each of the institutions involved to implement this Act 13. Chapter XIII dictates the Final dispositions some are transitory while creating prosecutors and special courts. Approved Law may be considered to have an instru15. Legislación y Economía - Octubre 2013

ment in favor of rights of women, hopefully some measure serves to prevent Domestic violence offense. L&E

REFUGEES Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

as recently enacted Law 74 of October 15, 2013, which establishes requirements for all refugees and asylees can apply for permanent resident immigration status.

It has the same law applies to persons having refugee status, approved by the National Commission for Refugees protection under the Act 5 of 1977, and duly recorded in the Office for the Care of Refugees; also applies to refugees recognized by the Ministry of Foreign Affairs. In this regard, it is stated that on humanitarian grounds may apply for permanent resident immigration status, refugees and asylees who have three years or more, to have such status, and manifest an intention to reside in the territory of the Republic of Panama. On the other hand, the rule provides that individuals who obtain permanent resident status under the condition of refugee, may opt for a permanent work permit. The government has stated that the law is based on other things in international standards which Panama is a signatory, making it necessary to have a legal body that regulates the legal status of asylum seekers and refugees who express an intention to reside in the territory of the Republic of Panama, under the permanent resident immigration status. We are facing a humanitarian standard, which seems to be no major problems, but what causes resentment is concerned to benefit people who shouldn’t have the status of refugees especially when it comes to refugees recognized by the Ministry of Foreign Affairs.L&E

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AND ASYLEES CAN APPLY TO A DEFINITIVE PERMANENCY IN THE COUNTRY

PLACE OF FULFILLMENT OF PREVENTIVE DETENTION IS MODIFIED Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

aw 77 of October 22, 2013 published in the Official Gazette 27403-A modified provisions of the Judicial Code and Criminal Procedure, on the transfer of suspects to prisons in preventive detention.

Article 2146 of Judicial Code is modified in the sense of establishing an exception that in the case of collective security crimes, crimes against humanity, money laundering, trafficking in persons, smuggling of migrants and related crimes be allowed that preventive detention is accomplished rather than to the county where the crime was committed and failing rather than the corresponding district. For its part, Article 239 of the Penal Procedure Code which provides as regards the movement ban was amended to introduce an exception to the case of collective security crimes, crimes against humanity, money laundering, trafficking in persons, migrant smuggling and related offenses will be allowed provisional detention is met somewhere other than where the crime was committed. Add reform that no defendant may be transferred to prisons outside the venue of competent court, unless he may accept or charged with the crimes mentioned in preceding paragraph.L&E

GRANT EXTENSION FOR FILING TRANSFER PRICING REPORT Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

he National Public Revenue Authority, through Resolution No. 20114244 of October 8, 2013 published in the Official Gazette 27.399 granted an extension until December 31, 2013 to present the Transfer Pricing Report for fiscal period 2012 in accordance with the provisions of Article 762-I of the Tax Code.

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The extension means that taxpayers who are required to submit the transfer pricing report will not pay a fine. L&E

RESOLUTIONS APPROVED FOR TAX INFORMATION EXCHANGE In this vein, also enacted Law 73 to approve the Agreement between the Republic of Panama and the Government of the Kingdom of Sweden he National Assembly on October 15, for the exchange of information in tax matters. 2013 passed Law 71 of October 15, 2013 approving the Agreement between the Those agreements are intended to provide assisRepublic of Panama and the Govern- tance to the contracting parties through the exment of the United Kingdom of Den- change of information that is foreseeably relevant mark for exchange of information in tax matters. to the administration and enforcement of domestic law concerning taxes covered by the agreement. Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

Similarly, issued Law 72 of October 15, 2013 to approve the Agreement between the Republic of Pana- It should be noted that this information will include one that ma and the Government of the Kingdom of Norway is foreseeably relevant to the determination, assessment for the exchange of information in tax matters. and collection of such taxes, the enforcement of tax claims, or the investigation or prosecution of tax matters. L&E

INCREASED PENALTIES IN CASE OF THEFT OF PUBLIC GOODS to five years for anyone without being part of the crime, acquires or receives money, securities or objects that knew or came from a crime or involved in accepting, receiving ith the approval of Law 70 of or concealing. Before the reform was worth was increaOctober 14, 2013 published in sed by one third to one half, which would be two years. L&E the Official Gazette No. 27,396 amending Articles 214 and 292 of the Penal Code dealing respectively with public goods, so you add a paragraph to Article 214 in the sense of indicating that when the thing is stolen or the good of those who are for the provision of a public or private electric power, water, telecommunications and broadcast television or closed the penalty is five to ten years in prison.

Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

It provides for an increase in imprisonment if the act is committed by an employee of the owner of the thing or stolen or when an employee of the contractor. Another modified aspect is penalty increased from four 18. Legislaci贸n y Econom铆a - Octubre 2013

CENTRAL AMERICAN STRATEGY OF RURAL DEVELOPMENT Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

y Law 27 of October 8, 2013 published in the Official Gazette 27,392 enacting provisions for the implementation of the Central American Strategy for Rural Development in the national territory, as well as to provide all administrative, political and financial, according to Conventions or Agreements established. Be up to the Ministry of Agriculture as the lead agency of agricultural development lead the process of implementation of the Strategy and organize the National Commission as a public private partnership responsible of the implementation process of the strategy in Panama. The Commission will aim among others to promote through participatory processes, social management of public policies in selected territories consensus formulation and investment programs for territorial development; guide sustainable rural development through transformations required in the institutional dimension, social, economic, cultural and environmental development of Panamanian rural territories. In this sense, we have in each of the selected territories to implement the Strategy will be a Regional Ac-

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tion Group, whose name will Territorial Development Council, which come to be an advisory body, a space for participation, coordination and local management on an inclusive, plural and democratic. Development Councils will aim to define a shared vision of what needs to be done in short, medium and long term in the country to achieve development, as well as to improve the indicators of economic, social, cultural, environmental and political of all inhabitants of the territory. The law in question, is result of the integration of Panama to Central American Integration System (SICA), which was approved at the meeting of Heads of State and Government of the member countries held in June 2010.L&E

POLYGRAPHICAL EXAMINATION AS TOOL INSIDE MANAGERIAL AND JUDICIAL WORLD María Martínez maria.martinez@rbc.com.pa

he polygraph, also known as a lie detector or truth machine is essentially a measurement tool because it records a set of physiological responses, generally, records changes in blood pressure, heart rate, respiratory rate and response or behavior of the skin, which are generated at certain questions that are the subject under test. Over the years we have seen use in private or business for hiring employees, according to the play area and other issues of relevance to the company. Then we wonder, how legal is to apply the test without involving violation of rights? That is, don’t go against that worker rights and the right of company to know more about those people who trust sensitive occupations and responsibilities within the company. Overall, reports issued by independent security consultants say the following: 1.That the person who is subject to the review, it is required to do so. 2.That initiated the test, person voluntarily consent to have performed polygraph examination. 3.The person being tested knows and understands the content and purpose of this test, ie is aware that you are undergoing this test, and that the purpose of the review is to indicate when the person is lying. 4.That there is a possibility to stop the interview and examination. Once the report has been signed and by respondent, there is a presumption that the test run was not illegal and was done against his will. Even when not legally regulated, its use in the workplace follows the acceptance that perform both parties

20. Legislación y Economía - Octubre 2013

(future employee and employer) within the contract. People, according to American Institute of Polygraph, are free to accept or not detector test, although the question remains as “voluntary” or not this choice, for someone who needs employment, surely no more alternative to undergo the test. On the other hand, questions about how valid and feasible is a polygraph test report, it is perfectly understandable, precisely because the test and resulting report are done privately. That is, given that this is an issue not regulated, there is a strong legal and practical vacuum on its scope, legality and validity. In professionals experience, who participated as a party in a criminal proceeding, even when the test request or provide at the time of filing the complaint or dispute in question; exists the possibility that the same be declared inadmissible by judge, basing for it in the principle of Sana Criticism. In line with the above, note that results of polygraph examination, is not conclusive evidence of guilt of the commission of an offense established in the Panamanian criminal law. That is why it’s common to see high profile people (political, business and the like) that large a loud voice I submit to a polygraph test! knowing that he will be subject to a criminal penalty for result of the polygraph report, which often is done by a private agency is paid by the same person who is being tested, which is in question the test transparency, converting the result into a great fallacy. On these novels that are experienced daily in the country, in relation to people who want to advertise undergo polygraph test, remember that polygraph test is not foolproof. Since the polygraph is as stated above, a measuring instrument, there are a number of techniques (that teach intelli-

gence and other security agencies to its members around the world) to pass this test successfully, especially if the work they risk their lives depended on it. It is also the case, for example, low-psychopaths, who can successfully pass these tests because, literally, “believe their own lies.” Because as the saying goes, “The truth belongs to those who believe.” Even we can be sure that, with certain exercises as a good night’s sleep, stay calm, think positive time, go to the test rested, relaxed and being nice to the polygraph examiner, favorable results can be obtained, or at least, not blunt. Despite its small margin of error, lie detection is not an exact science. To put it more graphically, many scientists call lie detection voodoo science. In our view, the polygraph will not solve the problem that is woven into the prosecution, especially when we talk about a subjective method that is not supported in a legal proceeding. We are aware that it is an issue of great relevance and interference in our environment. Since you have started shortly after application in Panama, our interest is to track and see your progress, identifying ways to go to help clarify all doubts and gaps around legal and proper use. L&E

21. Legislación y Economía - Octubre 2013

THE SECOND ROOM OF PENAL, APPLIES PROCEDURE THAT REGULATES REQUEST EXTRADITION IN THE PENAL ACCUSATORY SYSTEM Lucila Rivas - Abogada lucila.rivas@rbc.com.pa

a. It is the person whose extradition is requested (Article 2507 num.1 CJ). b. As contrary the extradition request to provisions of any treaty or law that was part of ANTECEDENTES DEL CASO the Republic of Panama (2507 CJ Art No.4). Shaped defects tainted filings (art num.2 CJ 2507). lawyer DIÓGENES ALVARADO interposed objec- c. tions incident against Ministerial Resolution N° 895 of July 24, 2012 by the Minister of Foreign Affairs that CONSIDERATIONS OF THE SECOND CHAMBER OF PENAL estimated that request for extradition by Government of the United States of America against the Mexican nationality citizen JUAN JUAREZ OROZCO, ac- To resolve this incident the Board used the stancused for the alleged commission of drug offenses. dards of the new penal criminal procedure code that While the aforementioned unresolved incident, attor- apply to criminal proceedings were instituted in the ney SIDNEY SITTON URETA filed a bail appli- Second Judicial District (Cocle and Veraguas), in cation for release for JUAN JUAREZ OROZCO the Fourth Judicial District (Herrera and Los Sanwithin the extradition process occupying this Room. tos) and those that are within the competence of the On March 15, 2012 the Grand Jury of Eastern District Supreme Court, in plenary or in the Penal Room, Court, New York, United States of America, issued in as single-instance courts, as in the present case. the case identified one CR12-197 Indictment against Being that the extradition request was filed afMexican national citizen JUAN JUAREZ OROZCO, ter the September 2, 2011, it is important to staalso known by the names ADAM ROBLES, JORGE te that the process for this kind of incident beCASTRO MORENO, "the Grandfather" or "El Quema- fore us is governed by the legal provisions do" for the alleged commission of the crime of conspira- governing the matter in the Code of Penal Procedure. cy to import cocaine into the United States, in violation of Sections 952 (a), 959 (a) (1) and 960 (a) (3) of Title ANALYSIS OF THE GROUNDS FOR OBJECTION 21 of the U.S. Code, sections 3228, 3551 and following of Title 18 ditto, and sections 959 (c), 960 (b) (1) (B) (ii) 1. That the person brought before a judicial authoand 963 of Title 21 ditto, events that occurred between rity wasn’t the person whose extradition is reJanuary 1, 1992 until approximately March 14, 2012. quested (num., art. 533 Penal Procedure Code). The Board, in reviewing the documentation provided by the requesting State and compare it with objections made THE INCIDENTIST by the lawyer, considers it important to note that the Among applications that the defense is requesting re- one identified extraditable by the name JUAN JUAREZ vocation of the Ministerial Resolution, in order that ex- OROZCO, a Mexican citizen, born on October 20, 1951 tradition of Mr. JUAN JUAREZ OROZCO is not appli- in Mexico, and described it as a subject whose height is cable, because in his view under the following grounds approximately five (5) feet and eight (8) inches, weighing for objection described in Article 2507 of Judicial Code: approximately 180 pounds, gray hair and brown eyes,

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who has two scars on his arms that seem to burn. In addition, it was noted that Mexican passport holder N° G07494908 and attached 3 photos (Chancery Record). It should be noted that among the evidence provided by attorney ALVARADO has the certified copy of the passport of JUAN JUAREZ OROZCO, document certifies that was born in the Federal District of Mexico on October 20, 1951 and is Passport number N° G07494908 (F.16 Penal Folder), matching data sent by the requesting State.

incident, it is a certification that the requesting State noted that it is set to any of the grounds described in Article 44 of Law 23, for which refuse extradition, namely: 1. When had been previously denied by the same offense giving rise to request on the same grounds and for the same person.

2. When the person sought has served the appropriate sentence has been pardoThe Room is of the opinion that the above data ned or amnestied by the offense upon which reand passport photograph of JUAN JUAREZ quest for extradition on the requesting State. OROZCO name match the documents submitted by the requesting State, being duly established 3. When are prescribed the prosecution that the person whose extradition is requested. or penalty that has been imposed on the perFor the two death certificates provided by techni- son sought, under the law of the requesting State. cal defense that the Board appreciates that were issued by Civil Registry of the United Mexican States, 4. When the offense carries the death peare annotated and credited the death of ADAM RO- nalty in the requesting State, to life imBLES and JORGE CASTRO MORENO. While both prisonment or degrading punishment. names match the alias with which the requesting State identifies Mr. JUAN JUAREZ OROZCO, these tests The requesting State expressed through Verbal Note N° are not relevant or useful to dissociate the extradition 1114 of June 21, 2012 the commitment not to apply to Mr. process, because what is the physical disappearan- JUÁREZ OROZCO the maximum penalty for the charge ce credited two people outside the penal business in for which extradition is sought is life imprisonment and which the application was under review, which is not that "the U.S. government assures the Government of Parelevant regarding the alias with which the requesting nama that the life sentence imposed shall not be requesState also says that knows JUAN JUAREZ OROZCO. ted or if the fugitive is extradited to the United States." The Board considers appropriate to state that the crime 2. The Faults of form from which the presented do- of conspiracy to import cocaine into United States, in cuments suffer (Num. 2, art. 533 Procedural Penal Code). compliance with article 960 (b) (1) (B) (ii) involves "a The document in question was reviewed earlier this period of minimum 10 years imprisonment and maxiresolution and this is a verbal note by Government of mum of life imprisonment", which implies that life imthe United States of America requested the provisio- prisonment is the only sanction that can be imposed. nal arrest of JUAN JUAREZ OROZCO for extradition. In other words, the judge in the penal interval, in It is noteworthy that verbal note is "the normal diplo- response to circumstances surrounding the facts matic means of communication between the Ministry and principles of culpability and proportionaliand a diplomatic mission or vice versa, and a mission ty, may impose a minimum of ten years in prito another Mission" and "it is a written communica- son and at the far end the detention indefinitely. tion, not necessarily signed, written in third person and As we can see from reading above described standards emanating from a diplomatic mission or a Ministry of that are based the Second Penal Room for resolution Foreign Affairs. Generally seeks to express something of this case, were the contained in the Penal Procedure that could have been said verbally, hence its name, but Code, which establishes the procedure of extradition and it is preferred to include written to endure and concepts set competition the same, even if this new procedural sysmay well be more clearly expressed and understood. tem has not entered into force throughout the country. 3. That the request for extradition is contrary to the The second room decided not to admit criminal inciprovisions of the Act or of any treaty to be part the Republic dent presented. L&E of Panama (Num.4 Article 533 Penal Procedure Code). As for the documentation referred to in the promoter of 23. Legislación y Economía - Octubre 2013

NOVEMBER 3 - DATE OF REMEMBRANCE FOR PANAMÁ Rafael Fernández Lara rbcweb@rbc.com.pa

n November 3 Panamanians enthusiastically celebrate the day of our independence from Colombia. Like many, I believe the correct term to remember this memorable date is "Independence", this because it is from then we stopped being dependent and politically subordinate to another nation, obtaining thus full autonomy over our affairs internal and external, finally making us a sovereign state. Thus, the real and precise date of our independence is the November 3, 1903, not November 28, 1821, when we remove the links that we subjected to colonial Spanish empire. Panamanians then resolved, by choice, that "the territory of the provinces of the isthmus belongs to the republican state of Colombia, to which Congress will be represented by his deputy", a union that was motivated, among other reasons, to the great admiration that we by the virtues and leadership of Simon Bolivar. As a result of that union with Colombia, Panama was still a department of this and not a sovereign state policy as essentially sovereign legal entity, as happened on November 3, 1903. The republican state Colombia at that time was composed of New Granada, which is territorially what constitutes today's Colombia, and also by Venezuela and Ecuador, set some historians called the "Great Colombia" to differentiate it from what would later become simply the Republic of Colombia, Venezuela since the November 25, 1829 and Ecuador on May 13, 1830, became independent countries, leaving Panama as a department of Colombia divided into the provinces of Panama and Veraguas. For 82 years when the Panamanians are part of Co-

24. Legislación y Economía - Octubre 2013

lombia, the atmosphere prevailing in the isthmus was deplorable. Panama was a distant and forgotten territory, become the scene of war and conflict, abandoned in economic development, education and health and in crisis and ongoing difficulties between the Panamanians and the Colombian government, which led to great dissatisfaction and huge desire to separate from Colombia. Evidence of what is stated above is that during this period the Panamanians staged several separatist movements such as that of September 25, 1830, on the March 21, 1831 which lasted one month and ten days of November 18, 1840 that made Panama's "State of the Isthmus" when the June 7, 1841, then Colonel Tomás Herrera was unanimously elected President of the Free Isthmus. From 1855-1885 it develops the "Federal State of Panama", Justo Arosemena creation, and in 1861 the Colon Convention with Santiago de la Guardia claim our federalists rights. The longing of separation obsessed much of the Panamanians and that feeling did not go unnoticed for Colombians. Already in 1834 the Colombian senator Francisco Soto said in the Colombian Congress that "by nature the Isthmus of Panama is calling you to be independent , for this to be achieved independence and before, and after, later or sooner, in about a century or in ten years, but it is certain that if the New Granada, to which belong the Panamanians with their taste, adopts the measures of trust and brotherhood, it is clear, again, that the government of New Granada anticipate what is to happen in the course of ten years. "Years later in 1855 Senator Pedro Fernández Madrid, who was President of the Senate, was manifested in the same direction by sta-

ting that "I will give my vote to the bill creating the State of Panama because I know the need of the Isthmus of constituted on the basis of 'self Govermment ', but does not hide that this is but the first step you take toward independence that section of the republic, sooner or later, the Isthmus of Panama will be lost to the New Granada." The August 12, 1903, the Colombian Senate rejected the Herran-Hay Treaty with the United States of America on the construction of a canal on the Isthmus of Panama, with 24 senators voting against, two (2) did not attend and Senator Panama, José Domingo de Obaldía, withdrew from the chamber shortly before the vote because he disagreed with that decision. This increased to intolerable levels of Panamanians disgust with the already deteriorating relations with the Colombian central government rushed to the Isthmus of Panama declared its independence from Colombia, with the support of the United States of America, who moved in the interest of build the Panama Canal and defend their economic and military interests, promptly recognized the independence of the isthmus. No Panamanian should feel diminished its national pride for help received from the United States. Just remember that the U.S. aid received from France in its war of independence from England and, as such, history records many examples of countries supported by other nations in their independence struggles. On November 3, 2013 the Republic of Panama 110 years of existence as a free and sovereign state, with an area of 75,517 km2 and a population of 3,500,000 inhabitants, making it one of the least populous countries in the Americas. On this date commemorate Panamanians with joy and deep love for our land, customs, landscapes, heroes, historical movements and proud unwavering struggle for many generations to the full recovery of our territorial sovereignty and control of the Panama Canal, strife that we completed on December 31, 1999 for the benefit of Panamanians and humanity. Recalling celebrate our great men and women and their contributions in various disciplines, with our strengths and weaknesses and our geographic position, which makes us the world's center and heart of the universe. In honoring this date I recall a verse from the great national poet Ricardo Miro in his poetry Home-

25. Legislación y Economía - Octubre 2013

land: "Oh Fatherland so small that you fit whole entire under the shadow of our flag, maybe you were so young, so I could take in the whole entire heart."L&E VIVA EL 3 DE NOVIEMBRE, VIVA PANAMÁ.

Viva Panamá

LESSONS OF SIRIA FOR PANAMANIANS

Ana Graciela Méndez rbcweb@rbc.com.pa

eeks before the start of the Arab Spring in 2011 the famous Vogue magazine published an article praising Syrian first lady Asma alAssad, and the efforts of the government of her husband, Bashar al-Assad. The article, titled "A Rose in the Desert", said, among other things, the status of "safe" country (website quoted U.S. State Department), the "intoxicating" cultural activity in the country, and the work the first lady, who hoped to inspire a "six million Syrians under eighteen years" they had an active role in shaping the future prosperity of Syria.

active youth citizenship and involved, ignoring brutal repression of the forces of her husband and was shopping for hundreds of thousands of dollars for internet and emails sent to relatives in England mocking activists. Luxury hotel chain Four Seasons also still operating, organizing weddings, and giving the best tour packages to those who had the ability to pay. Amid the chaos and violence, life continued without interruption for some, while many died and suffered not knowing that 2012 and 2013 would bring only more violence. It is true that current situation resembles Panama bit of Syria today, without much scrutiny can argue that they're heading to a civil war. But it would be irresponsible to think that we should not give importance to certain events that are precedent for a dangerous future- a future without democracy, a future in which few benefit while many suffer. And it is remarkable the lesson as quickly as violence broke out in Syria, after a short period of peace and progress in the country (in February 2010 the United States had sent its first ambassador in five years, denoting the general feeling that Syria was on the right path).

We move forward to 2013 and the Syrian reality is completely different to that published in Vogue. However, although neither Asma, nor the Department of State, Vogue could not imagine the magnitude of violence, tragedy would live the country shortly after publication of the article, many Syrians knew that what was published was just a very skewed version of reality. For many Syrians, Syrian prosperity and fascination with the Assad government was almost strictly a phenomenon abroad, or the minority who benefited from his policies. The simple fact that the protests In Panama, there is no reason to think that we are in imwere so massive March 2011 is proof that the desire, minent danger of genocide as given in Syria, but the dithe common anxieties and disgust were prevalent. sintegration of the democratic and autocratic direction prevailing in the country is reported daily in the mediaHowever, Assad and his henchmen were rooted to the and that, in its own right, it is disturbing and delicate. receiving favorable publicity abroad and refused calls Precedents for an uncertain future, volatile, unjust and to take advantage of people's dialogue and democrati- undemocratic occur daily and it's time to pay attention zation. Eventually, in May 2011, government sent tanks to them. It's time to realize that small actions accumulaagainst peaceful protests in the town of Homs. Mean- te and create the fertile environment for social and powhile, the famous shoe designer Christian Loubou- litical explosion that could be disastrous for our society. tin announced that he was happy that the "trouble- Indeed, although we don’t think it is reasonable to equate makers " (not sure if he was referring to the rebels or the events that led to violence in Syria in Panama today, soldiers of Assad) had not staked his holiday home in there are certain similarities chilling; similarities should the town of Aleppo to despite clashes that took pla- alert us to what they might mean for our future as a state. ce there. And the first lady, who allegedly wanted an 26. Legislación y Economía - Octubre 2013

While land titling scandal unfolded in Veraguas, designer and philanthropist Jean Pigozzi, enjoyed visits of President Ricardo Martinelli and Martha Stewart at home millionaire Simca Island (Isla Canales de Tierra), on the coast of the same province. As for the president and his oldest son are accused of involvement in a corruption case in the Italian courts, the first lady categorized as "unfair" criticism being leveled at the president. While in Changuinola Panama and Colon were repressed in the capital continued to operate in a thriving luxury hotels such as Trump, offering tour packages tours the country. More recently, as President Ricardo Martinelli enjoyed an audience with the Pope in the Vatican, a child of two years and a fifteen years teenager died after an act of indiscriminate police repression. The matching list is long. Over time more instances noticed in Panama that could be the catalyst for one of two things: a social movement doomed to rescue Panamanian democracy or undemocratic future in the hands of a few to make the country a business. Don’t forget, a protest innocuous can escalate to a tragic level in a short time if the conditions are, in Syria, time between peaceful protests were thought to be transient and brutal government repression was two months. Must be realizing that the previous add and scale to a point of no return. The Martinelli government scandals and outbursts we live daily are not isolated and just anecdotal. Where there's smoke there's fire, the saying goes, and it appears to be correct course leading Panama. When Assad and Syrians reacted had absolute control of their lives. Are we on time in Panama?L&E

Bashar al Assad Siria

Ricardo Martinelli Panamá 27. Legislación y Economía - Octubre 2013

PRELIMAR REPORT OF ANIP’S INCOME Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

Comments: • Current revenue grew slightly more than last year. This is a result of the economic downturn that the country is experiencing. Trend for rest of the year will be the same. Current revenues include a special dividend, non-recurring, of Petroterminal of Panama for B/.39.4 million. If exclude this dividend, current revenues would be below 2012. • It is necessary to investigate where the income has registered for the sale of the plot in Corozal to the ACP for B/.86 million. If they were registered as current income, the result would be very worrying. • The change of AMIR for the estimated has had a negative impact on the revenues of 2013. Whenever such advance tax change in 2012 that would be paid in 2013. However, there is no doubt that the economic downturn is having an impact on revenues. • The property tax generated B/.7.9 million more than in 2012. We are seeing the effect of the revaluation of properties held by the MEF. • It is possible that the reduced import tax is the result of the tariff reduction product of signed treaties.

28. Legislación y Economía - Octubre 2013

• The ITBMS grew by 5% over the previous year (report table has an error). This increase is less than in previous years and is directly related to lower economic growth. • The annual companies rate until September was B/.71.5 million an increase of 10.1% against 2012. Impact is not yet on changes to legislation in Panama. • The volume of transit of vessels through the canal has declined versus last year, which explains the decrease in contributions to the treasury. • The fiscal deficit this year close to the maximum deficit allowed by LRSF of 2.8% of a deficit of 2.1% in 2012. This implies a significant deterioration of public finances is pro-increased spending. • The total tax revenue generated a net deficit of B/.43.2 million (8.4%) indicating the government was due to the performance of indirect tax collections, mainly those related to imports. Registered current revenues in September totaled B/.572 million, representing a decrease of B/.29 million (4.8%) compared to September of 2012 and a deficit of B/.36 million (6%) compared to month budget.

During first nine months of 2013 the total accumulated current income was B/.4,423.5 million, resulting in an increase of B/.86.6 million (2%) compared to the same period last year. Compared to the budget of period, the fund shows a deficit accumulated B/.66.2 million (1.5%), which is mainly in certain areas of indirect taxes.

29. Legislaci贸n y Econom铆a - Octubre 2013

Tax revenues during September totaled B/.469.5 million, of which 55% relates to the payment of income tax companies and individuals, since in the month won the second game of the estimate. Only direct tax collection reached B/.293.7 million, resulting in a budget surplus of B/.10.8 million (3.8%). However, the total tax revenue result generated a net deficit B/.43.2 million (8.4%) due to the performance of indirect tax collections, mainly those related to imports. This trend is associated with the application of tariff incentives covered by free trade agreements in force. In relation to September last year, results show a decrease B/.57 million (10.8%) mainly concentrated in the area of ISR of Legal. This behavior was budgeted and is related to the entry into force in September 2012 to pay estimated AMIR replacement. Approximately B/.14.2 million (3%) of the taxes collected during September were canceled with product subsidies tax documents:

30. Legislaci贸n y Econom铆a - Octubre 2013

Accumulated revenues for the first three quarters of the year show a net growth of B/.19.9 million (0.6%) compared to the same period in 2012, which is insufficient in relation to the budget for the year and a deficit of B/.85.5 million (2.3%). Several factors influence these results: - Direct Taxes. With the strong performance in the collection of the various objects of direct taxes has managed to neutralize much of the decrease (vs. the previous year) which was planned in the case of corporate income tax (see box). At the end of the third quarter, revenue totaled B/.1,855.3 million, representing a budget surplus of B/.115.2 million (6.6%).

llion (10.5%) in indirect tax collection. As has been pointed out in previous months, customs revenue reflected in the budget doesn’t reflect the impact of tariff structures established in trade agreements between Panama and other countries and regions.

The comparative difference in income tax collection of legal person in September 2013 vs. 2012 (B/.278 million, 28.3%) was expected, since payments in 2012 converged product of two systems for the calculation of income tax in the case of companies, and the estimated monthly advance. During the 2013 have been used B/.123.6 million in tax documents product of: - Indirect Taxes. The trend downward in the collec- - Tax incentives to promote exports. tion of import taxes (tariffs, ITBMS, ISC), resul- - Subsidy cost of liquefied 25 lbs gas tank. ting in an accumulated budget deficit B/.200.8 mi- - Preferential interest home mortgage loans. 31. Legislación y Economía - Octubre 2013

NO INCOME TAX AND OTHER CURRENT INCOME

32. Legislaci贸n y Econom铆a - Octubre 2013

Non-tax revenue and other revenue during the month of September totaled B/.102.5 million, surpassing B/.6.9 million budget for the month and the result B/.28 million in September 2012. The first nine months totaled B/.864.9 million, generating a net budget surplus and growth B/.19.3 million of B/.66.6 million compared with the same period last year. The revenue and profit sharing contributions for September registered are as follows (figures in B / .millons):

As can be seen the preliminary report submitted by the ANIP, obvious that there has been a slowdown in the Panamanian economy, which is due to external factors, but certainly the ones that have heavy internal factors product decisions taken by the Executive rather than benefiting have produced a negative effect and were aimed at raising revenue to some extent cover present revenue deficit. Remember that last year, the AMIR was eliminated and restore again estimated for legal persons, which had a momentary benefit and not held as it should have been in any case, that is, the effect was negative. Another point to consider, which makes clear the government’s desperation for income to cover their commitments as is the tax amnesty has not yielded the expected results and excessive public spending exceeds revenue. The worrying thing about this is the fact that Government may change in 2014 but commitments are kept and we will have to face them. L&E

33. Legislación y Economía - Octubre 2013

COMMENT ON CONSUMER PRICE INDEX NATIONAL URBAN: SEPTEMBER 2013 Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

The Consumer Price Index (CPI) in September 2013, compared to previous month, an increase of 0.1 percent, both in National City, and for the districts of Panama and San Miguelito, while for the Other Urban , was 0.2 percent. Compared to September 2012, there was an increase of 3.9 percent for the National Urban for districts of Panama and San Miguelito 3.8 percent and 4.3 percent in the Other Urban. So far this year, National Urban CPI reflects a cumulative of 3.3 percent. The divisions showed increases in the National Urban September CPI regarding August 2013, were as follows: Furniture, household equipment and routine maintenance of the house 0.8 percent, caused by rising wages in domestic service, Housing, water, electricity and gas, with 0.4 percent, mainly due to the increase in the price of fuel for cooking, various goods and servi-

34. Legislaci贸n y Econom铆a - Octubre 2013

ces, also achieve an increase of 0.4 percent, the increase in the price of goods for the personal care Health with 0.3 percent, the increase in the price of pharmaceuticals; Clothing and footwear with 0.2 percent due to higher prices of footwear. However, increases in the CPI were partially offset by the following divisions: Food and beverages 0.1 percent, the decline in prices on meals outside the home and Transport 0.6 percent, decline in price of gasoline. Recreation divisions, fun and culture and education services did not vary. Comparing the National Urban CPI September 2013, with the equivalent of 2012, there was an increase of 3.9 percent, generated by the following divisions: Food and beverages 5.5 percent, 5.2 percent Education, Health 4.4 percent; Housing, water, electricity and gas 3.8 percent, Clothing and footwear 3.6 percent; Miscellaneous goods and services 3.5 percent, furniture, household equipment and routine maintenance of the house 3.4 percent; Leisure, entertainment and culture services 2.8 percent , Transport 0.7 percent. L&E

INDEX OF ECONOMIC ACTIVITY JANUARY - JULY 2013

Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

he Monthly Index of Economic Activity (MIEA) in the Republic, for the cumulative period from January to July of 2013, measured in terms of the original series, grew by 7.12 percent compared to the same period of 2012. The sectors with highest performance in the economy were mining and quarrying, construction, fishing, community, social and personal services, transport, storage and communications, hotels and restaurants, manufacturing. Of the components of services that continue to drive growth for the economy in short term we have, financial intermediation, health and private education, private households with domestic service, government and real estate services. The construction sector and mining and quarrying maintain their growth, explained by the implementation of major public investment projects, including development of large civil engineering works and contribution of the construction generated by private sector. This increase drives more demand for basic construction inputs, including those related to mining. Fishing continued positive rates, mainly due to increased capture and export of shrimps and some other export-oriented species. Providing fun and entertainment services was favored mainly by the largest increase in revenue from gambling rooms of chance games, highlighting the slot machines A and net sales of lottery, on the contrary, decreased

35. Legislaci贸n y Econom铆a - Octubre 2013

equestrian activities, bingo halls and gaming tables. The operations of transport and communications sector as a whole, showed positive performance, motivated by dynamics of air transport and telecommunications. However, decreased movement measured in TEU containers National Port System and operations of Panama Canal Authority. Service activities in hotels and restaurants recorded positive change, cemented by the greater inflow of tourists, hikers, transit passengers and the respective costs incurred by these during their stay in the country. Industrial manufacturing production showed positive results in activities such as: food processing, processing of non-metallic products for the construction and manufacture of metal products, paper, chemicals, plastics, and printing issues, not the textile manufacturing which decreased. Financial intermediation activity showed increase in bank loans, both internal and external, also, the insurance had a higher volume of premiums written. Private education continued its positive trend, given increasing demand for qualified personnel in local market. Similarly, health services had a positive performance. The tive

commercial rates both

sector recorded posiin retail and wholesale.

Some activities related to agricultural sector showed increase in production, fruit crops such as ba-

nana, melon, watermelon and pineapple destined mainly for export. Similarly, breeding pigs and poultry. However, registered fall cattle breeding. The production of electricity and water category presented positive rate due to increases in thermal generation and consumption of electricity and drinking water, but hydraulic generation negative change. L&E

36. Legislaci贸n y Econom铆a - Octubre 2013

MANAGEMENT TRAINING PROGRAM OF INTELLECTUAL PROPERTY Giovana Miranda - Abogada giovana.miranda@rbc.com.pa

n days gone by in San Jose Costa Rica, Ministers of Central America and the Dominican Republic approved establishment of training programs in intellectual property management and promote innovation, targeting the areas of academics, research, production, competitiveness and business promotion.

nancial support to realize these actions. The Deputy Minister considered important to prioritize the implementation of national IP strategies in each of the countries in the region also foster cooperation mechanisms and links with universities in each country, in order to generate the establishment of technology transfer offices, and new To the Deputy Minister of Domestic Trade and Indus- business models related to intellectual property. L&E tries, Luis Eduardo Camacho, who participated in this third Central American ministerial meeting, the goal is to maximize the benefit that provides and offers intellectual property system in the national economic and social development, encouraging the formation of American network of trainers in intellectual property. He explained that this initiative was established in a joint declaration signed by the Central American Ministers, in which they commit also incorporated into national programs for the promotion of SMEs, the use of intellectual property systems, encouraging the participation of the productive sector in them. The heads of this portfolio also request WIPO established the technical, legal and fi-

37. Legislaci贸n y Econom铆a - Octubre 2013

LATIN AMERICAN ECONOMIC OUTLOOK Fuente: MEF

The report "Latin American Economic Outlook 2014: Logistics and Competitiveness Development" prepared by the Organisation for Economic Cooperation and Development (OECD), the Economic Commission for Latin America (ECLAC) and the Development Bank of Latin America (CAF) was presented in the context of the twenty-third Ibero-American Summit held in Panama. European countries are consolidating their public finances, its commercial banking is taking a slight economic growth, the U.S. and Japan need to stimulate their economies, Minister De Lima listed. He noted that the outlook for Latin America is different in 2014, the price of "commodities" are down the uncertainty about interest rates, capital flows have been affected; China is growing at lower levels and this has impact on our region. He concluded that this report will play the most critical for our region that would be the connectivity, competitiveness, productivity, and inequality that exists in our region. For his part, Secretary General of the Organization of Economic Cooperation and Development, Angel Gurria, made a list of the most important events that have governed the global economy and Latin America, with hints and outlook for the coming months, stating that "the region (Latin America) will not grow at the same levels, will be below 2.9% last year and certainly below 4% of the average of the last ten years."

38. Legislaci贸n y Econom铆a - Octubre 2013

At the time, executive secretary of the Economic Commission for Latin America (ECLAC), Alicia Barcena said that our region has changed, but the need to adopt reforms to improve productivity and strengthen the capacity of governments to respond to demands of an emerging middle class. "The only way to really give the big jump region is making structural changes, closing the technology gap with the outside border and internal closing the gap," she said. While the chief executive of the Development Bank of Latin America (CAF), Enrique Garcia, said it is necessary to carry out additional investment in transport infrastructure and improve performance of the overall logistics. "We must substantially increase productivity and competitiveness in Latin America, and if there is a subject in which the region has a lag is on that," he concluded. Latin American Economic Outlook 2014 analyzes competitiveness of Latin America with other regions and provides policy options to increase logistics capabilities and strengthen the competitiveness of the region. After a decade of relatively strong growth, the economic outlook for Latin America and the Caribbean are less favorable as a result of three main factors: a reduction in turnover, the moderation in raw material prices and increased uncertainty respect to external financing. To address this scenario, requires a transition from a resource-based model, or scarce products adding value, to one based on knowledge and build productive capacities.

The event was attended by the Secretary General of the Organization of American States (OAS), Jose Manuel Insulza.

COLOMBIA:

Speech by Minister of Finance Edgar Ayales: fiscal deficit should decrease in Costa Rica.

COSTA RICA:

The National Electoral Council (CNE) signed administrative agreement with Unit Financial Information and Analysis (FIAU) and the Attorney General's Office to monitor campaign monies. Source: http:// www.uiaf.gov. co/?idcategoria=10551 The National Electoral Council announced its intention to sign an administrative agreement with the Attorney General of the Nation and the Government entity, Unit Financial Information and Analysis (FIAU) so that, together, establish a surveillance team of the money entering to political campaigns ahead of elections next year.

Fuente: http://www.elfinancierocr.com/finanzas/ Edgar_Ayales-ministro_de_hacienda-Haciendaconsolidacion_fiscal-deficit_0_397760237.html The Finance Minister Edgar Ayales, believes that Costa Rica's fiscal deficit should decrease at least 3.5% of gross domestic product (GDP), not less. The deadline to do so would be five years from now, otherwise the solutions would be even more complex and difficult. To Ayales, warning lights on public finances and the need for resources for the State and went on and must take decisions. Among the first results indicated a possible decrease any risk rating and rising state funding.

This was confirmed by the president of CNE, Nora Tapia, adding that what is sought is to have special features that hold the prosecution to withhold Ayales chose not refer specifically to the measures it the money whose origins can’t be justified. considers necessary to achieve this goal, but listed the general topics that should be in the discussion of "The idea is to form a team that allows us to have some possible reform. EF did an interview with the minisofficials of the Office, assigned to the CNE, in order to ter last October 24, a week after filing the tax chanwork in monitoring election campaigns and money ges in Costa Rica under the name "En route to fisflows, particularly cash monies around circulate these cal consolidation: Agenda for a national dialogue." campaigns because they are the actual money that can What percentage of the deficit would decline acceptance? allow permeate campaigns with money not saints or In the worst case scenario is 3.5%. exceeding the allowed amount," said judge Nora Tapia. I think that less than 3.5% would be improper, incoAmong the officials assigned to that convention, would an rrect. We are talking about three and a half points in asset forfeiture prosecutor, which would be responsible five or six years. If I had a tax reform next year, well 1% for investigating the origin of the money of campaigns. or 2% is enough. What I want is to get to the point where there is a primary balance that is 3.5%, not less than "We could have that forfeiture attorney who does that. "We have to get and I think that from now until have the power to withhold money until he delivers 2018 is a prudent period. Of course, it must be done a report with your origin. This is a power that doesn’t gradually and we will have to measure it very well. " have neither today nor UIAF or CNE " said Tapia. You said that the deficit could be bearable for a few years. Do warning lights come on in 2018? 39. Legislación y Economía - Octubre 2013

I think before. Alarm lights are on now. This decline in the perspective of Costa Rica (by rating agencies) is a bright yellow light, and is the alarm. "If they tell you if things don’t change in six months make it a downgrade (downgrade), is very serious because a downgrade has instant impact on the cost of financing, we are not going to a crisis, but is very serious. "At the moment, it's bearable, but we have two or three years to think and that is not going to happen. Yes going to happen in the next year the deficit will be 5% will be 6% if we do not act. Costa Rica has a three or four years where you can go from negative to critical. "If in five years we have not done anything, the situation is critical." So how much time do we have? What for? To become like Greece, as about 10 years to get to have the problems with Spain, may be about 5 years. "If we want to keep the situation stable, if we keep growing with low inflation, if we continue to attract foreign investment, if we continue to have access to international markets to finance our investment, if you want all that, time is very short, I would say one year. "We should do very serious approach between the end of this administration and the start of the next if we want Costa Rica international status doesn’t change. I think whatever happens after that could adversely affect us. But I hate to be alarmist, what if by May nothing has happened? Are we going to a crisis? No, we will not a crisis, but the situation will deteriorate and deteriorate as more, the harder is adjustment and more complicated are measures." What is the minimum that should be in every field? If we talk about a inescapable fiscal deficit should be undeniable actions. Of course there is a minimum and all have in mind a minimum. I wouldn’t at this time to detail measures by which we achieve this minimum because that would undermine the dialogue process. "I will not pass judgment, because we insisted a lot in this process done so far is an inventory through those nearly 60 workshops and a careful study of all previous attempts. "I could say with some certainty that our technical preference is that we reach primary balance in four or five years. You can clearly tell that implies an adjustment of 3 to 4 percentage points of GDP. That I could say categorically because it is based on real data, and what would be the fiscal deficit in the absence of measures. 40. Legislación y Economía - Octubre 2013

"We have made medium-term projections and estimates that the deficit in absence of measures may reach 7% or 7.5% in 2018, that merely raising spending on education, wage bill, conservative assumptions regarding interest rates and increased tax burden. It’s a passive projection without major measures that administrative. "Another important principle is that there should be only one revenue effort. This time has to be an effort to take into account measures of income, spending, financing and governance, since it must discuss the constitutional mandate that they don’t believe spending without revenue." With what measures would be consistent? What couldn´t say at this point are one-offs, (though) there are features or principles could be stated. "On the expenditure side announced that there are three issues that need to be addressed and we can’t stop. The issue of remuneration and growth." In the public grow at a rate that is twice inflation. That is not sustainable, any fiscal effort must include any measures to reduce the rate of growth in that row. "Another issue is that of specific destinations or creating unfunded spending is inevitable that talk of the National Childhood, education, municipalities and Development Fund Family Allowances (FODESAF). There are specific locations that have been created, representing 1.75 times revenue. That's not possible, is not sustainable and leads to very complex situations because we have a deficit of 5% (of GDP) and we violate a lot of these laws. "In revenue, customs tax administration, it’s important to get into greater efficiency." The tax system, equity and efficiency of tax we have. Topic related to elements we have to discuss exemptions: take a decision on whether we will continue to be exempt for 5.8% of GDP, or not, is a decision to be taken. "Evasion, avoidance and smuggling, we must face and there are several (measures) that lead to the strengthening of tax noncompliance." The revision of sales tax, and no previous consensus to review this. "And income, you must check it, now has 250 exemption regimes." Any ideas listed are not ideal? What are they like? I don’t know. Would sabotaging the list. Of course, all are not ideal. What I saw is that in consultations for the preparation of the document there was no consensus, the list is not agreed with these people (54 tax specialists). "(...) Some of the measures are difficult ideal. For example, what would be ideal? (...) Technically when adopting a Value Added Tax (VAT) is trying to elimina-

te all exemptions in many countries because VAT can annual inflation was at 5.22% and 4.12% cumulative. identify the different stages of the production process By sector, which affected education was more vawith information that may be useful to check other taxes. riation in September, with 49.21%, due to the course in the Sierra region of the country, while the food "But to eliminate exemptions as basic food must be very and beverage accounted for 25.45% of the variation. careful, because if you don’t have a database to help you The cities of Cuenca, with inflation at 1.67%, and Loja, identify people who need that help, it is very dange- with 1.13%, both in that mountain region, experienrous to remove a subsidy at once. I would say that is ced the highest rates, while coastal Guayaquil and Esregressive because it has the same rich or poor, ideally meraldas were the least affected by the inflation, 0.19% it is best not to give it (the exemption) and the poor and 0.17% respectively, said a statement from INEC. give the equivalent amount of what they cost these As for the cost of the basic food basket, was $612.05, products. But if you don’t know who to give it or not while the monthly family income was $593.60, poverty databases can’t. A VAT to keep exemptions for higher values in both cases, to September 2012. basic food is not ideal, but it is necessary at this time. " Inflation in Ecuador, with a fully dollarized economy since 2000, closed 2012 at 4.16 percent and the authoriWhy in some subjects more measures weren’t detailed as in ties estimate that this year we make around 4.4 percent. the treatment zones, public or duplication of exemptions? Clearly the document is not perfect and is not exhaustive, we have to enrich the dialogue process. We MEXICO: didn’t want to make a large or detailed document. It was important to synthesize many things, (it was) tyMexico, among pical case of exemptions. "There's a cost-benefit study of these regimes, we will make a forum and the- countries with more re are plenty of exemption regimes where we have business regulatory to see if the cost benefit justifies the fiscal sacrifice." developments: SHCP

ECUADOR: ECUADOR RECORDED IN SEPTEMBER AN INFLATION 0.57%

Source: http://www.informador.com.mx/economia/2013/493909/6/mexico-entre-paises-con-masavances-regulatorios-para-negocios-shcp.htm

Source: http://www.eltiempo.com.ec/noticiascuenca/130463-ecuador-registra-en-septiembre-unainflacia-n-del-0-57/

Fernando Aportela, undersecretary of the Ministry of Finance, said that structural reforms will promote a better business environment. FILE Mexico is among the 50 countries with the greatest progress in regulatory matters to facilitate business and has been consistent in the improvement process, said Deputy Secretary of Finance and Public Credit, Aportela Fernando Rodriguez. He said that results of the report of the World Bank (WB) called "Doing Business 2014" show that Mexico has had a continuous improvement in the rules governing business. He noted that the global ranking on the ease of doing business, places Mexico among the nations with major advances in this area and "is within the 50 countries of the world with best quality in its regulatory system." So noted, Mexico is above the average for Latin Ameri-

The country's inflation in September was 0.57% above the August, which was 0.17% and below 1.12% in September last year. The National Institute of Statistics and Census (INEC) today made public the data from the Consumer Price Index (CPI) indicating that annual inflation stood at 1.71% and 1.67% was accumulated. In September 2012, 41. Legislación y Economía - Octubre 2013

ca in terms of regulatory reforms to facilitate business, but the important thing is that there has been consistency in the behavior of the country within the index. The official of the Ministry of Finance and Public Credit (SHCP) said that most of Mexico regulatory changes that were evaluated by the WB in its report "Doing Business 2014", occurred in 2012. "This means that structural reforms in the process, that even some not measured in this Doing Business index, we should give a greater thrust in the international rankings," he said.

year by around 42 percent, adding the 121 billion pesos, estimated Mexican Internet Association (Amipci). Travel sales continue to lead the list of the most used, but segments like clothing sales has increased.

This growth is shown as a major achievement for the country, especially if you factor in the penetration of broadband that allows these purchases barely reach the 11.1 connections per 100 inhabitants until June 2012, according to the OECD, and 70 per cent of SMEs use the cash as their primary means of He said that in the past year, Mexico was one of the payment, due to the limited income they earn on 29 economies worldwide that improved in at least their sales, they close the doors to banking services. three regulatory issues, and if the country has witnessed advances in the areas of obtaining electrici- The vice president of the agency, Renato Juarez, said ty, electronic window to facilitate cross-border tra- that despite the economic environment, the e-commerde, judged and improved procedures for oral trials. ce in the country has continued to grow at double-digit He said the global ranking on the ease of doing business, levels, with 17 million active buyers, as well as diverwhich places Mexico at the site 53 from a total of 189 sify into other products and services. Introducing the countries, shows the consistency that has had country's study Amipci Electronic Commerce, said that although regulatory standards for business in recent years. most of the transactions in the past were mainly buying trips, today other segments have gained relevance, Even, he added, the "boundary indicator" inclu- such as clothing, thanks to the consumer confidence. ded in this report, which measures the progress that has been a country in adopting internatio- And is that last year, 44 percent of Internet users nal practices improvements in regulation, also re- purchased music or movies online, powered streaveal that Mexico has been improving consistently. ming services who settled in Mexico as Vudu, Net"What is important is the consistency that has been flix, Spotify, Google Play Music. In addition, 38 perhappening in terms of regulatory change to have better cent of the transactions were aimed at computers, practices," said Rodriguez Aportela. He noted that more 37 percent to clothing and accessories, while the trathan compare Mexico with other countries in this matter, vel declined from 64 percent in 2011, to 31 percent. what matters is that the country is carrying out an agenda of structural change that is relevant to the progress In fact, Renato Juarez said that this situation led to a that deserves the economy in terms of further develo- greater number of traditional shops, including large pment and economic growth for the Mexican families. companies, decide to enter e-commerce, with the potential and recent growth. "Companies are also making traHe anticipated that the structural reforms already ditions commerce because if not, they will stay behind approved and are in the process, are likely to have and there will be someone who will master it and will not a positive impact for Mexico to continue climbing be able to recover," the vice president of the Association. positions in the world ranking to facilitate business. Undersecretary of the Ministry of Finance said According to the study, the credit card is the most used that the spirit of the structural reforms to boost pro- means of payment, with 64 percent, followed by the ductivity at all levels and sectors of the economy. branch deposit, with 12, 11 percent for transfers and payments 9.0 percent in stores convenience. Renato JuaE-Commerce Increases in Mexico rez said higher sales in December are actually the last part of the year accounts for 30 percent of total online S ource:http://w w w.informador.com.mx/mexi - sales, driven by the holiday season and the Good End. co/2013/493913/6/aumenta-comercio-electronico-enmexico.htm Sales of electronic commerce in Mexico will grow this 42. Legislaci贸n y Econom铆a - Octubre 2013

ESTADOS UNIDOS:

The U.S. retail sales fell 0.1% in September Source: http://es.investing.com/news/economia/las-ventas-de-minoristas-en-ee.uu.-bajaron-un-0,1--en-septiembre-198881 The retail sales fell 0.1% in September in the U.S., mainly due to a slower rate in sales of motor vehicles, reported the Commerce Department. Sales of motor vehicles had their biggest decline in almost a year and in almost all other sectors were retail sales increases that month. In the car dealers sales were down 2.2% in September due in part to fewer days that month weekend, and there was a shortage of popular models. Excluding the vehicle sector of retail sales rose 0.4% in September, the largest increase so far this year. The retail sales account for nearly a third of consumer spending which, in turn, equivalent to almost 70 percent of U.S. economic activity. Sales in bars and restaurants rose 0.9% in September as well as the food and beverage stores. Sales at electronics stores rose 0.7%, and sales at gas stations were unchanged while clothing stores saw a 0.5% decline in sales. Inayearofretailsalesroseby3.2%thatanalystsconsideredinsufficienttoacceleratethegrowthofeconomicactivity.EFE.L&E

43. Legislaci贸n y Econom铆a - Octubre 2013

THERE DIMINISH THE LIMITS OF THE PROTECTED AREA: CHAME’s BAY Maryory Ramos

maryory.ramos@rbc.com.pa

Chame Bay mangroves were under the sole protection of the Municipality of Chame in accordance with the authority granted to municipalities by the Act 41 of July 1, 1998 in Article 63, and Act 106 of 1973. Thus Chame Municipal Council District, issued the Decision No. 9 of August 2, 2007, "Through creating the multiple use area (Municipal management area), Mangroves in the jurisdiction of the Villages of SAJALICES, BEJUCO, LEBANON, AND PUNTA CHAME, Panama Province, with an area of approximately 2,830 hectares, the area comprising the Chame Bay. Protection is establishing measures for the rational use, protection and conservation, as well as prohibi44. Legislación y Economía - Octubre 2013

tions on the exercise of certain activities in the area. The National Environmental Authority (ANAM), through Resolution AG-0364-2009 of May 27, 2009, declared Protected Area Mangrove Chame Bay, establishing the Category Management for administrative and environmental management in the area protected Multiple Use Area, responsible for this management the Authority by the National Protected Areas System of Panama. The limits set by the aforementioned administrative act, comprising terrestrial, fluvial, lacustrine, estuarine and coastal marine, having a total area of 8,899 has + 9,181 m2.

However, the General Manager of the National Environmental Authority, Mr. Silvano Vergara, through Resolution AG-0462-2013 of July 19, 2013, resolved to amend Article 4 of Resolution AG-27 03642009 May 2009, reducing Mangroves protected area boundaries Chame Bay, leaving it with a total area of 6,774 has + 0023 m2, whose motivation is the support by the Regional Administration of Panama Oeste through Technical Report dated January 28, 2013. This means that the surface has to secrete are 2,134 has + 2161.14 m2. Information provided by ANAM. This reduction is based on the technical report raised by the agency ANAM Panama West, which is based on the modification must be given by the inconsistency with the legislation that created the area, which means non-zoning areas within the protected area not found within the Management Plan of the area, delimiting the protected area in order to maintain congruence between the protected area declared and the Management Plan of it, when we found that it has reduced the area of protection and turn reduces the area covered by the Management Plan, returning to the same situation without conducting a study and support the change of surface implementation of the management plan, as understood that the aforementioned technical report used as a basis for modification of the boundaries of the Multiple Use Area is structured for exactly the purpose that is served by the administrative act Resolution AG- 0462-2013 of July 19, 2013, and not for the modification of the management plan . Consider it of vital importance that the National Environment Authority, performs its function of protecting our conservation and protected areas are in danger because our natural resources.

Protection Bay wetlands By considering a topic of interest, we share with you a summary of the closing arguments presented by Rivera, Bolivar and Castañedas as interested third parties within the Contentious Administrative Nullity Demand to declare the nullity of Resolution AG-0072-2009 of February 11, 2009 issued by the Minister on Issues Relating to the Conservation of the Environment and General Manager of the National Environmental Authority which is solved by declaring the Wetland protected Area of Panama Bay. Within this context, we have RBC position to intervene as interested parties was based on the following facts: 1. The primary benefit of the declaration of the wetland protected area of Panama Bay, is due to the conservation and protection of the ecosystems in the area, rational use of natural resources, to maintain ecological and evolutionary processes, gene flow and diversity of species of flora and fauna. 2. That the action taken by the National Environmental Authority, was intended to safeguard the life of a marine ecosystem in order to conserve biodiversity, genetic and cultural, influential both in human life and in economic life of a region, through a protected area declaration. 3. The declaration of a protected area of Panama Bay Wetland, by the environmental authority, doesn’t seek the prohibition of human activity in that area, but rather promote the rational use of natural and cultural resources under the provisions on the use of land and other measures to protect wildlife, soils, hydrological regime and other functions of the wetland for conservation and sustainable management of these ecosystems. 4. This is to preserve this natural heritage in order to safeguard the mangrove ecosystem, species of flora and fauna associated sustain biological diversity of interest to the human population further promote economic and cultural development of the communities connected the protected area and an active participation. 5. That the importance of this wetland as a regulator of water regimes, critical habitat for endangered wildlife,

45. Legislación y Economía - Octubre 2013

recognized as an international resource because waterfowl and shorebirds in their seasonal migrations may transcend boundaries, finding for subsistence to same as site shutdown.

has important ecological functions such as regulating water regimes, habitat for endangered wildlife, most important stopover site in Central declared by the Hemispheric Shorebird Reserve (WHSRN) on October 18, 2005 .

6. It is of paramount importance for commercial fishing because it provides habitat for numerous terrestrial and 12. Authorities have a fundamental responsibility to marine species, especially fish and shrimp, with life cy- protect and care for the environment, and is currently cles and ecosystems important for these species. not being met, it is often more important income to be received from the infrastructure, tourism and other ac7. Civil society through various environmental groups tivities, but the long term result the entire population denounced the constant disappearance and involvesuffer, which is why we ask you to prioritize Wetlands ment of mangroves found in the wetlands of Panama and protected reserves that exist in the country, and Bay, among which are located in the Township of Juan does not allow for a person to benefit harm thousands Diaz, District of Panama, under the execution of vaof living beings. L&E rious works in the area. 8. The value of this natural heritage is that protects a variety of species and reduces the impact of floods and hurricanes. 9. We maintain that the issuance of the administrative act, Resolution AG-0072-2009 of February 11, 2009, not an act of the Administration seeking or cause serious injury to the statement notoriously protected area to Wetland Panama but rather aims to protect the natural resources of this region in order to preserve wildlife and human, promoting the sustainable development of collateral activities carried out by the inhabitants of this area, thus preventing the loss of species and ecosystems. 10. The actor has no legal basis to apply sustainable Nullity AG/0072-2009 resolution of February 11, 2009, as to make reference to Article 24 of Law No. 6 of January 22, 2002, regarding the obligation of the National Environmental Authority to perform an act of participation prior to the issuance of administrative acts that may affect the rights and interests of citizens, clearly mentioned in article 24 which states that last line should be dealing with acts relating to the construction of infrastructure, recovery rates, zoning and set rates and fees for services. 11. The Wetland of International Importance, Bay of Panama, at the request of the Republic of Panama, is recognized as a Ramsar site (Convention on October 20, 2003) for their incalculable ecological and environmental services provided to the community. It

46. Legislaci贸n y Econom铆a - Octubre 2013

n Friday October 18, started the season at the Student Theatre of Colegio San Agustin with the premiere of Disney’s “Beauty and the Beast Jr.” directed by Professor Edwin Cedeno, Ezequiel Rangel in musical direction, and Maira Serrano Meadows in the cast Choreographic Direction as students on campus. The work is a nice and funny love story that starts with a spell that turns a prince into a hideous beast and all members of castle furniture, for the spell to break the Beast must win true love before the last petal falls from an enchanted rose. When we think of student work never imagined we would find a musical with stunning scenery, lighting, dazzling costumes and a cast very professional, despite being young actors, all together managed to submerge large and small in this Disney classic. The Parents’ Association of the Colegio San Agustin, annually staged a work fully acted and sung by students on campus, to stop fundraising charities and to support the mission of the College, located in Kankintú, Province of Bocas del Toro. Indira Rangel Association vice president said “The play of this year, once again, focuses its theme on Human Values that both Colegio San Agustin and Parents yearn to instill in our kids: not to get carried away by appearances, and always look beyond which meets the eye... “

47. Legislación y Economía - Octubre 2013

Concert organized by the Alliance Française: The famous French pianist, Célimène Daudet, appeared in Panama, Teatro Ateneo (City of Knowledge) on October 26. A unique concert comprised of the best known works of Franz Liszt, César Franck and Claude Debussy.

Pink Ribbon Campaign and Cancer Celeste: October is worldwide dedicated to preventing breast cancer and more recently, prostate cancer. Have you already made your exams? ACP presented the book “100 Years connecting the World.”

Dianas for the Fatherland: For lovers of the Dianas, the Mayor of Panama held an event where they presented targets and independent bands, from 12:01 am on November 3, until 5:30 am, in the parking lots of the coastal strip, opposite the restaurant Bennigan.

48. Legislación y Economía - Octubre 2013

Patriotic Parade: The parade will begin at 8:00 a.m. at the same time, and settled two routes to the parades of 3 and 4 November

JUSTIN BIEBER TOOK THE SEAT OF RED TIDE José Javier Rivera - Abogado

jjrivera@rbc.com.pa

fter the loss to the United States that brought us out of the hexagonal, and the poor presentation of the sub 17 in the UAE, I think the era of Dely's must come to an end, although neither Julio Dely Valdes and Pedro Chaluja of Federation have been clear enough to undo the contract that allowed the first direct the largest selections and sub 17, as expected after the results already discussed. Other issues have occupied the attention of fans, some very positive and the recent development of Nicolas "Yuyo" Munoz made 4 goals to Galaxy where campaigning Penedo in a span of 12 minutes, a fact that leaves no doubt about the crass Dely error to keep in exile for three years. In that same vein, Gaby Torres is inspired football in the United States, as are Luis "El Matador Tejada" and Robert Chen respectively in Mexico and Spain. But as we near Halloween and other holidays approaching, we must change the tune defeatist and move our thinking toward paths holidays. In that vein, strangely enough, is that the young Canadian singer Justin Bieber took Rommel, on Thursday October 24 and filled the bleachers and part of the program of that footballing grounds, not to dribble, dribble or make or throw to the goal of Penedo outwitting Baloy, but turned to delight the Panamanian teenagers, Central and South American, which of course weren’t dressed in the costume of red, but went with a sweater "believers". As reported by an extraordinary article in the newspaper La Presa entitled "Justin Bieber and football" 49. Legislación y Economía - Octubre 2013

Fotografía: Daphne Sima written by journalist Maldonado Lucero, is that Justin Bieber also plays football and is in fact an admirer of Beckham and played games with other players like : Fernando Torres and Frank Lampard. What this means is that football is a unique sport who have played football, as some including the coach of the national team wanted to hold the pretext of supporting reckless and arrogant that the only ones who can relate football in a democracy like ours starved, are those who have fought in any team. That would be like saying that not a doctor who can’t talk about the precariousness of the National Health System or non-engineers can not refer to the cost of a public work. I'm sure that those who read the article carefully by Maldonado Lucero, published in La Prensa and aren’t fans of Justin Bieber as I am, would be interested now much by singer, by pruritus only Justin Bieber also have time to do the bike in a soccer field. But not to stray from the central theme of our capsule sports, it's time to start thinking about locating the best foreign talent to restructure our senior team bearing in mind that we must avoid in football, in the public sector and in private conflicts of interests affected by the decisions to convene in the selections only and only to improve. Dawn and see ...

NUESTRO EQUIPO SOCIOS José Javier Rivera Irene Itzel Bolívar Cisneros Dayra A. Castañedas L. Javier Said Acuña R. César A. Rivera B.

jj.rivera@rbc.com.pa irene.bolivar@rbc.com.pa dayra.castanedas@rbc.com.pa said.acuna@rbc.com.pa cesar.rivera@rbc.com.pa

ABOGADOS Pedro O. Bolívar C. Giovana del C. Miranda G. Maybe Mendieta G. Augusto C. García Lucila Rivas G. Karen Fábrega

pedro.bolivar@rbc.com.pa giovana.miranda@rbc.com.pa maybe.mendieta@rbc.com.pa augusto.garcia@rbc.com.pa lucila.rivas@rbc.com.pa karen.fabrega@rbc.com.pa

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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