OUR AREAS OF PRACTICES Taxes Public Contracting Intellectual Property Sanitary Registry LitigationArbitration and Mediation Maritime Law and Ship Registry
Writers in this Edition
Labor law Migration Issues
José Javier Rivera
Corporation
Moisés Veliz Arosemena
Starty a business
Rafael Fernández Lara
Private Interest Foudation
Giovana del C. Miranda
Trusts
Lucila I. Rivas
Contracts
Karen Fábrega
Bank Advisory
Mariela De Sedas de Sanjur
Stok Market Advisory Notary and Registration Environmental Law Anti trust law Telecommunications
EDITORIAL BOARD José Javier Rivera
Giovana del C. Miranda Fotografía - Mariela De Sedas de Sanjur Roberto Ramos Portada: Virginia Medina
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Edición - Septiembre 2013 Legislación & Economía, is publisched by Rivera, Bolívar y Castañedas, aimiuy to keep our suscribes informed, industrialist, executive, bankers, investors, etc.
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Content
Editorial
Pรกg. 6
Panamรก and global competitiveness report 2013 โ 2014
Pรกg. 7
Territorial classification in the city: a Hanging Task
Invited writter
Norms de interest Hydrocarbons law is modifyed.
Pรกg. 9
National System of treasury and the national treasury single account.
Pรกg.10
Visa requirements for multinational headquarters new staff. Preferred Interest
Pรกg.11
Femicide: a social problem.
Pรกg. 12
governing agreements for avoidance of double taxation.
Pรกg.13 Pรกg. 15
Consult, Doctrine and Jurisprudence Movement of work permits
Always there no criteria unit in judgments arising from Supreme Court
Pรกg. 16 Pรกg.17
Content Politics
social interest measures to redress the mean distribution of wealth.
Pág. 19
Panamanian Economy
Rating agencies have no crystal ball
Pág. 22
Commentary on the consumer price index national urban: august 2013
Pág. 24
Panamá and colombia sign FTA.
Pág. 25
World Economy wb/central america: not tariff measures put up the prices of products in 30 per cent
Pág. 26
EURO AREA FISCAL UNION Greater fiscal integration to strengthen the resilience of euro area
Pág. 27
Sports Capsule
Paths of Mariano Rivera.
Pág. 29
Cultural Capsule The Home dresses of holiday.
Pág. 31
Activities and celebrations for the month of october 2013.
Pág. 31
XXVII National Orchid Exposition.
Pág. 32
Editorial Territorial classification in the city: A hanging task jects involving accumulation of materials, sediments and other debris. The city also suffers from poor disposal of waste that accumulates in creeks, mangroves, beaches and rivers everywhere. This growth has been rapid, disorderly intensive and therefore its effects are felt most impact during rainy season, since there is shown the fragility of the road structure, collapse of public sewerage system, the unwillingness of waste and fragile wetland areas that have the function of serving as drainage during rainy season.
José Javier Rivera - Abogado
R
jjrivera@rbc.com.pa ecently, a group of citizens have publicly expressed their opposition to the claim of a company to construct a building for residential purposes, which if implemented, significantly affect the quality of life of current and area residents who claim that there is no public infrastructure service to address the new users of the civil works. According to the complainants, approval of the amendment to the zoning of the land held by the MIVIOT, in clear violation of oida parte and provisions of this regulation. The protest coincides with the start of the most intense time period of the rainy season (October to December). Precisely from September 28 we had heavy rains that have caused flooding in some areas of the city as Panama Viejo, Juan Diaz, Rio Abajo and San Miguelito. Fortunately, these rains came at a time when the tide was not high and therefore, the damage didn’t become a catastrophe. In the last four years there were different types of events that have generated damage and pain to many families living in Panama City and the surrounding area, east or west. From Arraiján and La Chorrera to Chepo and Cañita have been affected. Then there is the execution of works in different parts of the city involving river diversions, construction of flyovers and underpasses and executing residential and commercial pro-
6. Legislación y Economía - September 2013
It’s therefore essential to establish a kind of high-level committee formed by the Ministry of Housing, Ministry of Public Works, Municipal Engineering, National Environmental Authority, IDAAN, CAPAC, CONVIVIENDA, SPIA and community related entities, to set land policy that includes parameters for a rational use of available areas for residential and commercial development, the infrastructure to be built for these new requirements and provide a regulatory framework to prevent abrupt changes in zoning. This regulation has to contemplate punishments for those who violate these provisions promoters and strengthen public institutions must ensure compliance with these regulations for land use. Taking into account the increase in value of land, perhaps the greatest impact would be to transform the Ministry of Housing in a Ministry of Land, since unlike the 70s when creating housing laws, the initiative residential building is in the hands of private sector and not the government. Therefore, the urgent task is to achieve a real land policy. Dawn and see... L&E
INVITED WRITER
Panamá and Global Competitiveness Report 2013 – 2014 Moisés Veliz Arosemena - Economista KatifeKose y Martín Yao - Periodistas rbcweb@rbc.com.pa
T
he World Economic Forum 2004 adopted the Global Competitiveness Index and defined as the set of institutions, policies and factors that determine level of productivity of a country, which is calculated by collecting data at the country level comprising 12 categories, considered as the pillars of competitiveness. The analysis of these pillars offers a wide spectrum on the competitiveness of a country on topics such as: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, development financial market, technological readiness, market size, business sophistication and innovation matter.
The most recent report released in Geneva by the World Economic Forum in Switzerland stands for the fifth consecutive year as the most competitive country in the world, followed by Finland and Singapore. Germany placed fourth and United States who has won two steps, is ranked fifth. In addition, the report points out, there is a general stagnation of competitiveness in Latin American and the first place is Chile, with the position 34th, Panama, with the position 40th, followed by Barbados with position 47th, Costa Rica, with 54th position and Mexico, with 55th position, which remain relatively stable. Brasil lost this year compared to the previous eight posts and 56.The position is in other countries, long overdue reforms and investments to ensure future economic growth, here come Honduras that ranked 111, Venezuela’s 134 and Haití the 143.
The Global Competitiveness Index which measures 148 economies in the world, is drawn from a survey of more than 13,500 entrepreneurs in the world. In the case of Pa- In analyzing the case of the Republic of Panama, in the light nama, involving 130 companies from different sectors. of this index, we can see that the country has improved 7. Legislación y Economía - September 2013
from position 49 to 40, staying within the top 50 economies in the world standing out for making improvements in aspects such as infrastructure, ranking 37th in the world, with one of the best port networks (6) and airports (5). Moreover, the country demonstrated strengths in financial market (16) and technology adoption (11), especially through multinational foreign companies are established in the country. On positive side, the report also recognizes that Panama has made progress in improving quality line of education moved from position 112 last year to 75. However, when analyzing the line of quality of education in mathematics and science get a poor rating, ranking 114. The recovery of these materials, it is essential to develop technological capacity of the country.
tainty to investors 69. Fortunately for Panamanians, the country has a National Competitiveness Center directed by Dr. Nicolas Ardito Barletta, internationally renowned economist and former president of the Republic, which has held seven (7) National Forum for Competitiveness, to by which have been given up on the recommendations that have emerged from each Forum.
Thus, for example, at the end of the 6th. National Competitiveness Forum 2011, was presented to the State 130 recommendations, of which 29 were completed, under implementation had 87 and 14 that needed to be addressed. This tracking is possible collaboration with ministers of state, heads of autonomous entities, holding workshops to promote innovation and through coordination meetings However, there are important aspects that need to be im- with the Cabinet National Logistics. L&E proved, most notably: judicial independence which occupied the 118th, the fight against crime and violence, which occupied the site 115; efforts to control HIV/AIDS, which occupy the place 116, and low wages-productivity relationship where we took the place 111. In trust politicians to occupy position 94, in political favoritism position 88, in corporate ethical environment in position 71 and legal cer-
BIBLIOGRAGPY: Global Competitiveness Report 2013-2014. La Prensa, Economics and Business section, p. Thursday 35th September 5. 7th Report. National Competitiveness Forum 2012. Panama, September 10, 2013
8. Legislaci贸n y Econom铆a - September 2013
NORMS OF INTEREST
Hydrocarbons law is modifyed
Giovana del C. Miranda G. - Abogada
W
ith the approval of Law 53 of September 9, 2013 published in the Official Gazette No. 27376 of September 18, 2013, amending oil market whose main purpose is to promote and regulate the exploration and exploitation of oil, asphalt in its natural state, natural gas and other hydrocarbons. According to the preamble to amendment of Act 8 is result of a consultancy, which revealed that it was necessary to meet the current market demands of hydrocarbons, to make the country more competitive and attract more investment. The main changes focus on the name of the permit and contract for exploration and exploitation of hydrocarbons, adjustments and extensions durations of the stages of exploration and exploitation, the percentages adjustments to receive the State of hydrocarbons produced by the contractor, creates a royalty regime eliminates the exemption from income tax, including during the period of exploration and extension, the contractor paid on land, inland waters and the sea, a canon annual surface. Is introduced Article 13A which provides that the State may make agreements for acquisition, processing and interpretation of seismic data in multi-client mode and will 9. Legislaci贸n y Econom铆a - September 2013
giovana.miranda@rbc.com.pa
be valid for five (5) years from its endorsement by the General Comptrollership of the Republic and may be extended without extension exceed five (5) years. Furthermore, the Technical Evaluation Permit is granted for a period of eighteen (18) months in continental areas and twenty-four (24) months in offshore areas. Before the reform was granted a period of up to twenty-four (24) months. The Operating Agreement is an agreement between the State through the Secretary of Energy, Ministry of the Presidency duly authorized by the Cabinet Council and the contractor for the exploration and production of hydrocarbons and shared for shared operation of oil activities. The amendment in this regard, is that before the amendment requires approval of the Legislature. The duration of the operating period has been reduced from five (5) to three (3) years from operating a contract from exploration and production sharing. However, when it comes to an extension of the period was maintained for two (2) years. The bond to guarantee the faithful performance of the contract shared exploration and production has been set at an amount equal to 50% of the cost of the work involved, ie there was an increase since before it was in the amount equal to 20%.
As for the operating period remains at twenty-five (25) of the value of extracted volumes taking into account the years from the date of commercial production determine complexity of the site, oil type and level of energy assurance a site, but it modifies the extended period of the operating and investment reservoirs. period of five (5) to ten (10) years. Finally, we must refer to the fact that the Act 53 repeals Before entry into force of the Act in question, the contrac- section 72 of Act 8 which provides for exemption from pator had a period of forty-five (45) days to submit the first yment of income tax for the first five (5) years, means that development program National Energy Secretary prior to from September 10 this year contractors governed by this the start date of operating period, With reform period has Standard shall pay the income tax. L&E been extended to one hundred twenty (120) days. Was entered during operating period the contractor pay both on land and in inland waters and in sea surface royalties annual 0.25 cents per hectare during exploration period and 0.50 per hectare during overtime. As indicated in the preceding paragraphs has been established to pay royalties to the state a minimum participation of five (5%) percent and a maximum of twenty percent (20%)
National System of treasury and the National Treasury single account
N
Giovana del C. Miranda G. - Abogada giovana.miranda@rbc.com.pa
ational Assembly recently passed Law 56 of September 17, 2013 by which created the National Treasury and the National Treasury Single Account, aiming at regulating Law organization and operation of the System which shall be conceptual, normative and functionally integrated with the rest of systems that make up the State Financial Administration. The National Treasury shall consist of the set of principles, laws, organizations, rules and processes involved or applied to the concentration of collection and administration of public funds, and their application for the payment of state obligations. It should be noted that the National System shall consist of the Directorate General of Treasury, Ministry of Economy and Finance and the administrative units responsible for treasury services operating in Central government institutions, decentralized institutions and Public Sector Enterprises not Financial. In turn, the National Treasury Single Account is the operational instrument through which it gives practical effect to the principle of housing unit, comprising the Central Government, decentralized institutions and nonfinancial public enterprises and has the aim to secure greater efficiency, profitability, transparency and security in the administration of public funds.
10. Legislaci贸n y Econom铆a - September 2013
Are excluded from the application of the law in reference to the Panama Canal Authority, Social Security Fund, State Universities, municipalities, communal councils, Financial Intermediaries and excepted by law only with regard to the use and management of own resources. Among benefits that Government states the rule to be that the running of this system will help save public interest and costs, and to improve performance of the resources that are inactive, and the fact that it is a gradual process and scheduled throughout the scope of its jurisdiction, so that first applied to the Central Government, after a year of implementation will include the decentralized and finally upon completion of the second year of its effective implementation is extended to public enterprises. Finally we have also excluded the application of the Act to Panama Savings Fund and the Executive shall regulate within ninety (90) working days from September 19, 2013 when it began to govern the Act 56 of 2013. L&E
Visa requirements for Multinational Headquarters new staff Giovana del C. Miranda G. - Abogada
T
giovana.miranda@rbc.com.pa
he Multinational Corporations have a special system in our country, which includes the immigration status of aliens who come to Panama for the purpose of working for companies covered under this scheme.
Similarly, the dependent must submit criminal history of the country of origin or residence, but they have more than two years of continuous residence in Panama can provide the certificate of Judicial Investigation Department.
In this regard, we note that new requirements for this visa, Within this context, we have the National Migration Ser- are common for resident permits corresponding to the vice by Executive Decree No. 945 of September 13, 2013 other categories of migrants, perhaps what has become established within, visa requirements that power must be common to equip keeping requirements special regulation. given and signed by the applicant and by the legal repre- On the other hand, it is noteworthy that this is the second sentative headquarters of multinational company, as well reform is to regulate migration of multinational companies as the presentation of the criminal record of the country of in less than two months. origin or residence. In our August issue of 2013, we referred to the fact that the Another modification that brings the Decree, is defining National Immigration Service had introduced reforms. L&E what is meant by dependents of permanent staff at headquarters spouse or partner companies, joined by at least 5 years in terms of uniqueness and stability for children under 18 and up to 25 years when they prove that they are studying, children with disabilities and parents who remain in Panama under the responsibility of the permanent staff at headquarters. Included within this group of staff who has custody and parenting or guardianship of a minor.
11. Legislaci贸n y Econom铆a - September 2013
Preferred Interest Giovana del C. Miranda G. - Abogada giovana.miranda@rbc.com.pa
A
ct 3 of May 20, 1985, was passed with the aim of promoting home ownership by Panamanians and throughout his life has undergone several changes, so we have that in its original version, given the benefit of Law of a preferential interest housing between $ 25,000 and U.S. $ 62,500, then in 2008 the range was subsequently extended to $ 80,000 in May 2012 extended the subsidy to $ 120,000. With the approval of Law 63 of Sepferential interest to indicate that the on housing loans whose carrying and not exceeding U.S. $ 80,000.00.
tember 19, 2013, amending prepreferential section can’t be 4% value is greater than $ 40,000.00
The homes valued between $ a reduction of 2% above the bank preferential interest may be granted up to May 21, 2016.
80,000.00 to $ 120,000.00 have rate. Finally, mortgage loans with
L&E
12. Legislación y Economía - September 2013
Femicide: a Social Problem Lucila I. Rivas G. - Abogada lucila.rivas@rbc.com.pa
Violence against women is a social problem that affects all societies and violates the rights and freedoms of both, victims, their families and communities. Currently discussing a draft amendment to the Criminal Code to criminalize Femicide and punish violence against women and teaches prevention of these behaviors. There is no unified approach on the term “femicide” however what we can say is that it is a violent act against women specifically, and that arises from a sentimental relationship, where the result is the death. Among the approaches embodied in the Reform Project is to strengthen and institutionalize the bodies to which they treat violence against women, ensuring sustainability Advisory Committee, Monitoring and Control of Public Policy on Violence Against Women (CONASFVIM). Among the institutions that have responsibility for domestic violence include: 1. National Women’s Institute. 2. National Council of Women. 3. Judicial Branch Unit Access to Justice and Gender. 4. Attorney General. 5. Ministry of Government. 6. Ministry of Social Development.
11. 12. 13.
People’s Advocacy. Panama University, Institute for Women. Women’s Organizations of Civil Society.
Among the most significant changes that are intended to introduce the Penal Code, are additions to the following items: Article 36. It adds Article 42-A of the penal code as well: Article 42-A: not be applicable customs or cultural or religious traditions as excluding guilt for perpetrating, inflict, consent, promote, incite or tolerate violence against women. Article 37: Article 50 of the penal code is as follows: Article 50: The penalties established in the code are: 1. Major: a. Prison b. Weekend arrest. c. Fine days. d. Multidisciplinary therapeutic arrest. 2. Alternative: a. … b. … ….” Article 38. A paragraph is added to Article 54 of the penal code: Article 54: Weekend arrest is sentenced internment of a penitentiary for a period of forty-eight hours, which will be fulfilled according to the circumstances of each case, including six in the afternoon of Friday and six o’clock the following Monday. The arrest will have a minimum of twelve and a maximum of two hundred and weekends for the commission of a single offense. Do not apply the death penalty in the case of crimes against Life and Personal Integrity and Against Domestic Violence and Sexual Integrity Freedom, human trafficking if the victim is a woman.
7. 8. 9. 10.
Ministry of Health. Ministry of Education. Ministry of Labor and Workforce Development. Ministry of Public Security.
13. Legislación y Economía - September 2013
Article 39 is added to Article 132-A of the penal code as well: Article 132-A: Whoever causes the death of a woman in any of the following circumstances, shall be sentenced to twentyfive up to thirty years in prison:
1. When a relationship exists or has tried unsuccessfully to establish or reestablish a relationship of this nature or emotional intimacy or kinship ties exist with the victim. 2. When a relationship of trust with the victim or any labor, involving teachers or any subordination or superiority. 3. When crime is made in the presence of the sons or daughters of the victim. 4. When the author takes any advantage of any hazardous condition or physical or mental vulnerability of the victim. 5. As a result of group rites or revenge. 6. By contempt or abuse of the body of victim, to satisfy sexual instincts or acts of genital mutilation or any other type of mutilation. 7. When the body of the victim is exposed, deposited or dumped in a public or private place, or when it has been cut off, whatever time prior to death. 8. To conceal a rape. 9. When the victim is pregnant. 10. For whatever reason generated because her womanhood.
tenced to two to four years in prison. It will aggravate the penal four to six years of imprisonment in the following cases: 1. If the victim is a woman. 2. If the worker has not completed eighteen years of age. 3. If the offender committed the crime abusing. Article 44: the first paragraph of article 200 of the penal code remains like that: Article 200: who harass or physical assaults, psychological or materially to another family member shall be punished with imprisonment from five to eight years and multidisciplinary therapeutic treatment in a health center or specific state that has specialized care, provided that the conduct constitute offenses punishable by more.
Article 45. It adds Article 214-A of the Penal Code as follows: Article 214-A. shall be sentenced to five to eight years in prison who commit economic violence against a woman, incurring any of the following behaviors: Article 40. A paragraph is added to Article 135 of the Penal 1. Reduce, limit or restrict the free disposition of her Code: goods or patrimonial rights. Article 135. Whoever induces or aids another to commit sui- 2. Force a woman to sign documents that they affect, cide shall be sentenced to one to five years, if suicide is met. border, restrict his heritage or it put in risk, or that exempt it The penalty shall be twelve to fifteen years if the crime is com- from economic responsibility. mitted against a woman because she is a woman only. 3. Destroy or hide documents of domain or of personal identification or goods, personal objects or instruments of Article 41. The final paragraph of Article 137 of the Penal work that are indispensable to execute her economic activiCode: ties. Article 137. When injury occurs as a result of using a firearm in a public place or usual traffic of people or adjacent to resi- Judicial System Response and what Victims expect. dential areas, for trivial reasons or to facilitate another offen- The Panamanian justice system requires the participation se, such as derivation of domestic violence, when there is a of different entities be they administrative or judicial natupublic servant in the exercise of their duties or by reason of re, it is certain that what you hope the victims of this social this, when the injury has been caused in order to remove a scourge, is that preventive measures once known fact luck vital organ of the victim or when the injury is inferred a wo- is effective such that to ensure its integrity. man by the mere fact of being women, prison shall be twelve to fifteen years. An Example of Good Practice in Costa Rica. In Costa Rica has created a special committee composed of Article 42. It adds Article 138-A of the Penal Code, thus: various institutions that help prevent the killing of women, Article 138-A. Whoever commits psychological violence by whose mission is to record all cases of violence and threats, using threats, intimidation, blackmail, persecution or ha- to track and share information with each other and thus rassment against a woman or force her to do, tolerate exploi- reduce the factors that may contribute with the risk of hotation, contempt, rejection, insults, threats, demands obe- micide. L&E dience or submission, humiliation to humiliation, isolation or any other similar conduct, shall be punished with imprisonment from five to eight years. Article 43. Article 178 of the Criminal Code reads as follows: Article 178. Discrimination who sexually harass or stalk a person who has an employment relationship, school, religious, regardless of the hierarchical relationship, shall be sen14. Legislaci贸n y Econom铆a - September 2013
Governing agreements for avoidance of double taxation
Giovana del C. Miranda G. - Abogada
T
giovana.miranda@rbc.com.pa
he Directorate of International Taxation of National Public Revenue Authority issued Resolution No. 201-2013 of August 26, 2013 by which regulates the application of benefits under the Double Taxation Treaties signed by Panama for implementation in the National Public Revenue Authority. The resolution in question, develops six aspects such as Accreditation, Stakeholders Submission Form, Validity Period, Front and Effectiveness. With respect to accreditation, it must be any natural or legal person is entitled to use of benefits established in the agreements to avoid international double taxation may apply the same subject to accreditation by submitting a memorandum to the Directorate of International Taxation. On the other hand, we have that accreditation alone must be submitted by the person or legal entity that meets the legal requirements or budgets contained in the agreements, provided that the beneficiary can show that is a tax resident of the country in question. This point defines who are stakeholders and who can manage the accreditation to the Authority. For the period of validity, it has to depend on whether a transaction is not specified in detail in the memorial, it will 15. Legislaci贸n y Econom铆a - September 2013
be valid for the application of detailed transaction benefits the memorial for which you want to apply profit. In contrast, when the Interested specify that the transaction will periodically and proving the correctness of the same, is it will be valid for the specified period. Since the resolution was published in the Official Gazette No. 27375-A of September 17, 2013, the same became effective on September 18 this year, so that those interested can go to the Directorate of International Taxation of National Public Revenue Authority to present accreditations. L&E
CONSULT, DOCTRINEAND JURISPRUDENCE
Movement of work permits Giovana del C. Miranda G. - Abogada
I
giovana.miranda@rbc.com.pa
n our labor legislation provides that any alien, who work in the country must have a work permit duly issued by competent authority.
Is exclusive jurisdiction of the Ministry of Labor and Workforce Development knowledge of work permits and the same are governed by Article 17 and 18 of Labor Code. In this regard, Article in comment sets the percentage of foreign workers who can work in a company legally established in Panama in proportion to the domestic worker, which tells us: “ARTICLE 17: All employers keep Panamanian workers or foreign with Panamanian spouse, or ten years of residence in the country, in proportion not less than ninety percent of ordinary workers, and may hold foreign specialized or technical personnel not exceeding fifteen percent of all workers. In any case, the percentage of salaries or allowances in whole and by category, may be less than those provided for in the preceding paragraph. Nevertheless, it may allow a higher proportion of foreign technical specialists or definite time, upon recommendation of the ministry concerned and approval of the Ministry of Labor and Workforce Development. Employers who need to employ foreign workers obtain an authorization issued by the Ministry of Labor and Workforce Development, after verifying that does not alter the national percentages required in this article, that qualified personnel meets the respective quality and perform the functions inherent his specialty. This authorization shall be issued for up to a period of one year, renewable for up to five years. Also exempted from the above percentage trusted workers of companies in the Republic engaged exclusively in maintaining offices in order to direct transactions that are completed, or take effect abroad, following authorization by the labor authorities. “ (Emphasis is ours) Executive Order # 17 of May 11, 1999, published in Official Gazette No. 23,798 of May 18, 1999, by which is regulated in Articles 17 and 18 of the Labor Code establishes requirements and procedures classes to obtain a work permit. Now the twenty-first article cited above Executive Order states that work permits granted to foreign labor in a particular company and it does not allow you to work in another com-
16. Legislación y Economía - September 2013
pany. Taking into consideration the above mentioned, we have in accordance with provisions of Article 17 of the Labor Code and twenty-third of Executive Decree No. 17, any foreign worker can work in the country unless it has the appropriate work permit approved by the Ministry of Labor and Workforce Development. The filing alone does not authorize the foreign worker who works, since it requires the authorization of the Ministry of Labor and Workforce Development. We brought up, fundamental principles governing labor migration, to see the statistics of the permits, according to information provided by the Mitradel Statistics Department, we have the month of August 2013 have been awarded a total 957 work permits. Of this total, we note that permissions are 256 national married, 193 within 10% of the regular staff, 150 for humanitarian reasons, 63 friendly countries, 19 foreign professional and 12 Panama Italy treaty. We note, that last three work permits are of recent origin and respond to new immigration categories created by the National Immigration Service and could be said to have come to fill a void, since foreigners had met with immigration however, did not meet the requirements to be granted a work permit which ultimately meant that they were not allowed to work and not to remain legally in the country. L&E
Always there no criteria unit in judgments arising from Supreme Court Karen Fábrega - Abogada
U
karenfabrega@rbc.com.pa
nder the presentation of Judge Harley Mitchell, the Civil Chamber I, seized the Extraordinary Appeal knowledge of Cassation, promoted by the legal representative of Mrs. Adelaida Marin de Hernández against the decision of December 14, 2006, issued by the Prime Superior Court of Justice, elucidated by Resolution of July 2, 2013, within the regular process against Alfredo Ortega, Productos Lácteos, S.A. and Compañía Internacional de Seguros, S.A.
First Instance therefore concluded the trial continues trading companies and Alfredo Ortega’s trial.
As a brief summary of the facts, demand was that they were declared jointly liable for the damages and pain and suffering as a result of traffic accident suffered by the plaintiff and caused by Alfredo Ortega, driver of the vehicle, Productos Lácteos, S.A., owner of the vehicle and Compañía Internacional de Seguros, up to the amount of the insurance policy.
The applicant relies on the cassation appeal in the background (violation of substantive rules of law), by way of mistake of fact regarding the existence of evidence for greater understanding, means it was shown as a fact or not was considered a means of evidence in the process and demonstrates clearly that such fact existed, at least for this particular case.
Before the Court of First Instance, filed a notice of Partial Settlement, which was signed by the plaintiff and defendant legal persons, which recognize the right of the applicant to be compensated, and therefore the insurer pays the applicant the sum of B/. 10,000.00 and B/. 2,000.00 to his legal representative, without prejudice to the plaintiff to continue the trial of Alfredo Ortega, the driver of the vehicle. Such partial transaction was duly approved by the Judge of
Proof omitted in the opinion of appealer assessment consisted of an expert opinion, in which injuries were noted by the applicant, ie damages suffered as a result of the accident. The Civil Chamber, to consult the judgment, concluded that the lower court based its decision on the fact that the test has not attesting linking the defendant with the harmful event which is charged, which is not related with the test, whose value is estimated omitted.
17. Legislación y Economía - September 2013
Subsequently, primary judge issued the Judgment No.94 of November 18, 2004, denying the requested declaratory claim, which was appealed by the plaintiff, announcing evidence on appeal and complying with the relevant procedural steps, the First Court of Justice confirms the judgment by the judgment of December 14, 2006, against which remedy of appeal is filed.
The First Court declined to assess such evidence on the grounds that the evidence was missing credited defendant’s responsibility Alfredo Rufino Ortega therefore irrelevant test results proving the existence of damage and the amount, if there is also evidence that agent certifies accountability. Just who would not condemn. This criterion then, turns out to be shared by the majority of judges comprising the Civil Chamber, adding further that as a court of appeal, can’t examine other evidence which indicate those that appealer as mispriced , or as valued as the causal evidence and decides the judgment of December 14, 2006, issued by the First Court of Justice. Interestingly, the ruling in comment, is the dissenting opinion by Judge exposed Oydén Ortega Durán, who disagree with the other judges, he considered that the reports prepared by experts appointed by the Court and the applicant are in agreement and pointing clearly the damages caused to the complainant, which left marks on her face and the affected eye caused by embedding non-removable glass particles caused by the car accident, and that the specialty involving the expert, have enough probative weight considerations undermine the First Superior Court, and that the omission of such evidence bearing on the merits of the decision under appeal. Judge notes that by not recognizing the expert evidence showing injuries sustained by the plaintiff in the car accident and taking into account the existence of the partial transaction between the plaintiff and the defendants (the company that owns the car that was driven by defendant Alfredo Rufino Ortega and the insurance company of the car), the act constitutes a judicial confession, as provided in Article 895 of the Judicial Code, and therefore, is evidence linking the car accident and the responsibility and clearly gives account of the connection with the driver of the vehicle, Mr. Alfredo Rufino Ortega. In his analysis of the decision under appeal, the Judge indicated that the partial transaction by the two defendant companies confirms the assertion by the plaintiff as to the occurrence of car accident, automobile ownership and the responsibility of the driver Alfredo Rufino Ortega, made it to be recognized by the defendant, therefore, “does not require proof of the facts asserted by one party and accepted by the contrary, for which the law doesn’t require specific test” as stated in Article 784 Judicial Code . Honorable Judge concludes that, in weighing the expert, judicial confession product of partial transaction, in addition 18. Legislación y Economía - September 2013
to the injuries sustained by the plaintiff, there was sufficient evidence to accept the judgment. REFLECTIONS ON THE EXPOSED JUDGMENT I agree with the position expressed by Judge Oydén Ortega, for indeed, if there was a mistake of fact regarding existence of the test, since it had proved as a fact or not taken into account half of evidence in the process and demonstrates clearly that such fact existed, ie linking the defendant Alfredo Rufino Ortega in traffic accident with evidence in the proceeding as was the Partial Settlement, where owner of vehicle and insurer, assume Indeed responsibility, highlighting the responsibility that is attributed to these companies is a liability, considering that none of them was driving the vehicle, therefore it was necessary to condemn Alfredo Rufino Ortega driver of the vehicle, ie the primarily responsible for the accident, or is that vehicle operated by itself? Although the remedy of appeal is purely formalistic, you need to tell every single room of the evidence that were left to appreciate what was omitted by appealer, however, proof of the Partial Transaction is a fact requiring no proof, as was recognized by the parties and must be taken into consideration for the decision under appeal. Due to the above, I believe that has been violated by all accounts, her right that attends Mrs. Adelia Marin to compensation for damages caused by the vehicle driver Alfredo Rufino Ortega, at least to be condemned in the abstract if not proven the amount, to subsequently bring an enforcement process judgment and at that time proving the amount of damage caused. L&E
POLITICS Social interest measures to redress the mean distribution of wealth
Rafael Fernández Lara - Abogado rbcweb@rbc.com.pa
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n our country and in all those where prevailing social capital as basic production relationship, is living its positive and imperfections, including so-called poor distribution of wealth. Most of the wealth they produce our nations is generated by and benefits a minority group because of their work, effort and investment injections. The remaining majority doesn’t generate this production due to many situations, including its economic activity is reduced, and their effort is not paid properly, or do not have access to educational opportunities and other resources, among many others. Therefore Panamanian governments, aware of these realities, have promoted social development, adopting measures and implementing programs that seek to leverage as much as possible these inequalities. One of the most important examples is the Social Security Fund of Panama, founded in 1941. This is an eminently supportive company that covers a wide sector of the population, including under its protection to employers, independent workers and their dependents. The benefits, pensions and medical and economic benefits offered seeking
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social justice framed on fundamental principles of universality, integrity, solidarity, equity and defining the concept of social security of our times. As reported by the Social Security Fund for the year 2010, the number of contributors-dues-payers, was 1,220,320 citizens, and, adding to their dependents, the total number of recipients was 2,862,190 out of a population in the Republic of Panama of 3,405,813 Panamanians. That is, the Social Security Fund covers 84% of the country’s population. This population consists protected insureds-contributors-active and retired workers and their dependents, noting that the number of contributors representing 43% of total insured while dependents represent 57% of total target population. Another example, the “Red de Oportunidades”, implemented by the Ministries of Health and Social Development, was created by Executive Decree No. 54 of July 16, 2002 with the objective of eliminating barriers to access to development families and communities with the greatest financial need, such as indigenous communities, lacking basic health, nutrition and education. This plan covers more
than 357,000 people benefited directly into 592 districts recorded on the map of poverty and extreme poverty. This program involves the delivery of monthly B/.50.00 families enrolled. With this laudable program will strengthen efforts to prevent child malnutrition. Currently there is a bill that seeks to increase monthly B/. 50.00 B/. 140.00 per quarter (or B/. 70.00 per month).
sing Solidarity Fund, which has been well received among humble Panamanians eager to get a home of their own. The government contribution is non-transferable to lowincome beneficiaries of the formal and informal economy. This contribution is B/. 5,000.00 per family that purchases a new home whose price doesn’t exceed the sum of B/. 40,000.00.
Another special government program of economic, created by Law 44 of August 4, 2009, was established with the aim to alleviate the hardship suffered by those seniors who do not enjoy a special retirement or old-age pension and are in poverty or extreme poverty. The program consists of a transfer of B/. 100.00 per month for 70 Panamanians or older who meet the requirements set out above, looking partially satisfy their basic needs for food and health, promoting the reintegration of older household and social. This benefit is not transferable and ceases with the death of the beneficiary, is indefeasible and discount exempt. There is currently a bill which seeks to raise B/. 100.00 to the monthly B/.120.00.
Eligibility requirements for this contribution: file an affidavit of household income not exceeding B/. 1,200.00 per month; demonstrate the mortgage loan approval for the purchase of housing which would apply the contribution, not owning any property; be of age, or be a Panamanian or resident alien shape. This contribution reduces the social problem of a housing shortage of approximately 140,000 housing units. This statewide initiative found support among private housing developers, who claim that this is the best time for many Panamanians housing dream come true. The Housing Solidarity Fund helps low income Panamanian family but with some ability to pay.
By Act 39 of June 14, 2012, wisely created a special program called Guardian Angel, which is a monthly financial assistance to Panamanian B/. 80.00 with severe disabilities living in conditions of extreme poverty and dependence, with inability to work and provide for their own basic needs. The projected coverage for this program is 55,000 people by 2014 nationwide. This plan strengthens the social protection system and is part of efforts to eradicate extreme poverty and hunger. It is intended to extend short-term benefits for retirees and the disabled elderly and B/. 20.00 increased to raise the monthly to B/. 100.00. Universal Scholarship program was created by Law 40 of August 23, 2010 and was designated oversight Institute for Training and Development of Human Resources (IFARHU) and the Ministry of Education. This program consists of financial support by a grant from B/. 20.00 monthly, for a total of B/. 180.00 school year, offered to children and young students of basic education , pre-media and media in public and private schools require financial assistance for the purpose of reducing dropout and support the Panamanian family pocket in the education of their children. The requirement to fill for all students is a 3.0 on 5.0 GPA. Additionally, for students in private schools, they should cost less than B/. 1,000.00 per year between enrollment and monthly payments. The universal scholarship payments are made at the time of delivery of newsletters and delivered in the presence of the student and parent or guardian. Another commendable step taken by the state it is the Hou20. Legislación y Economía - September 2013
Another good measure, delivery of computers to students, has been made by the Panamanian government by resolution 152, issued in September 2011. Supported by this resolution, education authorities have given to each middle school student, professional and technical a laptop for daily use in educational tasks under the rubric of “Spreading the Technology Program” in order to minimize technological literacy of both students and their families and to maximize their motivation to continue their secondary education and that currently there is a high percentage of dropouts. The program aims to cover about 93,000 students nationwide. Thus, the Panamanian government by 2014 will have different programs grants totaling nearly B/. 1,099 million, including within them subsidizing the electricity tariff that benefits more than 800,000 users who consume less 400 kilowatts/hour per month. It is also included in this amount, an allowance of B/. 59.5 million from the year 2007 and that benefits nearly a million and a half of Panamanians who use the so-called “tanquecito” of cooking gas of 25 lbs., For which they must implement effective mechanisms to prevent abuses and thus benefit only those homes who really need. Having made a general reference to government agencies with programs to alleviate poverty wherever possible and extreme poverty and improve distribution of wealth, it becomes clear that the State requires planning and coordination of poor areas to obtain data and keep records that enable such programs efficiently reach those most in need,
as well as in evaluating the impact of these programs on the lives of beneficiaries. Responsibility of a government is conscious administer the country for benefit of all people within their economic and other types, and implement serious and effective policies to address the problems of poverty in our country, being supportive as possible to life of our people is worthy and can enjoy. It is important that the state and private economic groups within their own role and capacity, generate employment for those who don’t, to cover daily basic salaries, keeping in mind that poverty is suffering and that those with stability economy can and should cooperate to improve the quality of life of the inhabitants of marginalized communities, and being responsible in our duties as citizens and rulers. This is how governments can equate the balance between social actions compared to their actions in support of trade and production activities in the country. While social programs promote social development along with economic growth, peace will remain. These programs will be beneficial to the population as long as efficiently reach the homeless, while they are properly supervised and planned with financial support for the future, taking into account the increase in population. Only then we will live in a more just social country and have an incentive to improve the distribution of wealth. L&E
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PANAMANIAN ECONOMY
Rating agencies have no crystal ball
Moisés Veliz Arosemena rbcweb@rbc.com.pa
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ith the title of this article aims to guide public opinion, in the sense that the rating agencies don’t have the final word on economic or financial forecasts and have the ability to guess the outcome of the transactions associated with the issuance of debts of a country or financial institutions.
market in the United States, and by then, and lettered qualified investment risk. Fitch was established in 1913, by John Knowles Fitch in New York. It merged with IBCA Limited based in London in 1997. It is the smallest company of the big three. Since then, only three key agencies in the world, which were born in the United States, a market that is very hard to get for regulatory reasons. They control 90% of evaluations Their grades are a reference to the risks faced by investors of bonds issued in capital markets. when they buy bonds or financial instruments and are supposed to emit independently, methodological and profes- Panama received considered investment grade rating for sionally. These references also help investors to make inves- the first time in June 2010 and have been evaluated on the tment decisions in certain countries. three rating up to position ourselves within the Latin AmeIts origins date back to the nineteenth century, with the de- rican group with the highest ratings ranging from BBB- to velopment of the rail industry and the importance of the AAA. The group that is below that level is called Speculatiissue of bonds for financing. ve Grade, ranging from BB + and lower grades. The oldest, Standard & Poor’s was founded in 1860 and is known to investors worldwide as a leading provider of financial market information. The S&P 500, is the most followed stock market index in the world and the S&P GSCI commodity is more often by the global industry. Moody’s was founded by John Moody in 1909. In that year the company’s ratings covered nearly 100% of the bond 22. Legislación y Economía - September 2013
The three rating agencies agree that the strong growth of the Panamanian economy has been a factor in the allocation of Panama’s sovereign rating. Other factors mentioned repeatedly, is the country’s economic stability and the gradual reduction of public debt (in relative terms to GDP). But on the other hand, the reports of the rating on the sovereign rating, contain comments on aspects that should be improved, such as the level of public debt to GDP ra-
tio, which represents 53% in July 2013, which is considered out of balance. Standard & Poor `s said “If the government can make capital investments in additional improvements effect on its tax position to reduce their level of debt while continuing to develop the domestic capital market, we could revise the outlook to positive.” Moody`s for his part, said “The rating could experience additional upward pressure if current infrastructure investments support the economic growth momentum and the government reverses the recent deterioration in fiscal performance.” Meanwhile, Fitch Ratings said that “building a record of compliance with fiscal targets, a large reduction in government borrowing and increased fiscal buffers, would be positive for the rating. Evidence of economic growth would be positive prudently managed.” In the past, these sovereign ratings issued by recognized
institutions, not everything positive result was expected, because of the overnight economies have collapsed. Examples keeping history are those that occurred in Thailand in 1998, Argentina in the playpen, 2001 and most recently, Greece, Spain and Portugal since 2010. There were also business profile cases that have received the highest ratings in investment grade when they had vanished actions, such as Enron and Worldcom, but more recently the case of subprime mortgages backed by banks based subsisted scams including Lehman Brothers. Serious institutions, which have analyzed the risk ratings given to Panama, including APEDE agree that regardless of the rating criteria they use to make their assessments, “there are areas that may require a higher degree of progress, such as the institutions, governance and legal stability of the country, are key factors to attract investment, create a good business climate and economic growth become a component of development.” L&E
Citation: APEDE. Apediana Economic Letter, Issue No. 5 March 2013 Gabriel Martin. Is there a relationship between the rating agencies and financial terrorism risk? Mundiario (http://mundiario.com/authors) Gerardo Lissardy, BBC World, Paris. Risk Rating: unlimited power? AeN Argentina in Business. Rating: risk as a business. August 11, 2012.
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Commentary on the consumer price Index National Urban: august 2013 The Consumer Price Index (CPI) in August compared with July 2013, an increase of 0.3 percent in National City, for the districts of Panama and San Miguelito 0.2 per cent and 0.4 Urban Rest percent.
both with 0.2 percent, due to the increase in the prices of household bleach and man shoe, respectively, and foods and beverages 0.1 percent due to higher prices of meals outside the home.
Compared to August 2012, there was 3.9 percent increase in National City, 3.8 percent in the districts of Panama and San Miguelito and 4.1 percent in the Other Urban. So far this year, the National Urban CPI reflected a cumulative of 3.2 percent.
However, the division of education showed a decrease of 0.1 percent, due to the falling prices of personal computer equipment. The Division of Recreation, entertainment and cultural services remained unchanged.
The divisions showed increases in the Consumer Price Index August, referring to July 2013 were: Miscellaneous goods and services 0.6 percent, led by higher prices personnel deodorant, Housing, water, electricity and gas; Health and Transportation, each with 0.5 percent, the increase in gas prices tank 100 pounds, gasoline and cough syrups, in the correct order, furniture, household equipment and routine maintenance of the house and Clothing and footwear,
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The National Urban CPI August of this, when compared with the same month in 2012, showed an increase of 3.9 percent, generated by food and beverage 5.5 percent, education 5.2 percent, 4.6 percent Health, Housing, water, electricity and gas 3.8 percent, Clothing and footwear 3.4 percent; Leisure, entertainment and culture services 2.7 percent, furniture, household equipment and routine maintenance of the house 2.6 percent, transport 2.3 per cent; Miscellaneous goods and services 1.4 percent. L&E
Panamá and Colombia sign FTA Fuente: Página web del MICI.
On 20 September, the Minister of Commerce and Industry of Panama, Ricardo Quijano and his counterpart from Colombia, the Minister of Commerce, Industry and Tourism, Sergio Diaz Granados, signed the bilateral Free Trade Agreement between the two countries. The negotiation process began in 2010, but the negotiations were suspended and restarted in March 2013 concluded with the signing of FTA, which has been considered as a step towards the integration of Panama on the Pacific Alliance. It is noteworthy that the Pacific Alliance is composed of Colombia, Mexico, Chile and Peru as members. For Diaz Granados of Colombia Minister “was important to have this agreement between two brotherly countries with trade flow of U.S. $ 2,800 million. The possibilities will change with the agreement, because it was getting trade between the two countries without clear rules, so there will now be assured that a better environment to negotiate.”
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For his part, Minister of Commerce of Panama said that after a pause that was important was achieving negotiation between these two neighboring countries that were so close and so far on the business, lack of TLC. The agreement will allow integration between the two countries, and that will open the doors of trade and legal certainty in this regard. The minister explained that the FTA between Panama and Colombia provides for a deduction that begins in five years on some products, and that will go up to 15 years, with exclusions in coffee, sugar and milk. He said that with the agreement and tariff liberalization will have products that are not going to give up now smuggling between the two countries. L&E
WORLD ECONOMY WB/Central America: not tariff measures put up the prices of products in 30 per cent
T
Source: World Bank he application of non-tariff measures, such as requirements for the import and export of food and beverages, has a significant impact on trade in Central and expensive reaches up to 30 percent the price of commodities, according to a new World Bank study. The study “Non-Tariff Measures in Central America: Economic impact and increase” acknowledges that non-tariff measures have legitimate objectives such as the protection of human health, animal and plant health, but warns of the risk that countries choose to use them to protect local industry. The findings of the study were discussed with representatives of the public and private sectors in the region, during the workshop “Non-Tariff Measures in Central America”, Costa Rica’s capital organized by the World Bank and the Ministry of Foreign Trade of Costa Rica (COMEX). “Identifying non-tariff measures that affect trade in Central America is important to promote regional efforts to rationalize its use and minimize their economic impact”, said Jose Daniel Reyes, World Bank economist and team leader author of the report. “Ensuring that the processes of harmonization and mutual recognition of compliance with health records is a good example of the kind of regional policies with great potential, both to increase the competitiveness of the private sector to reduce the prices of processed food and beverages in the region.” Among the measures analyzed by the study are technical standards, health requirements, labeling, records, permits and certifications to be met with imported and exported goods. Understanding and complying with these regulations involve costs for businesses and generate an increase in consumer prices. According to the World Bank, non-tariff measures on average can increase the price of a product by 8.7 percent, but in Central certain sanitary and phytosanitary regulations can raise prices by up to 30 percent. On this account, the prevalence of
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non-tariff measures in Central America compared to South Asia, a region known for the use of these measures as barriers to trade. The World Bank analysis indicates that in Central America, Guatemala, Nicaragua, and Honduras are the countries that use non-tariff measures more frequently. In particular, the lack of harmonization of SPS is one of the main difficulties for trade integration in the region. According to estimates, for example, in Guatemala the average increase in the price of meat SPS tariff equivalent to 66.4 percent. This is consistent with the perception that Guatemalan market is limited to exporters in the region, especially in Nicaragua. For Costa Rica, the study reveals that non-tariff measures affecting fewer products in neighboring countries, and its use is lower than in countries with higher levels of competitiveness, such as Chile, Colombia and Peru. However, the country’s regulatory system remains complex: Currently in Costa Rica there are 131 non-tariff measures derived from 57 regulations, which affect 81 percent of imports and 19 percent of export products. In Costa Rica, public institutions responsible for the largest number of non-tariff measures are the Ministry of Health and Ministry of Agriculture and Livestock. Other regulations are monitored by agencies such as the Ministry of Environment, Energy and Telecommunications, the Ministry of Economy, Industry and Trade, the Ministry of Labor, COMEX, the Costa Rican Drug Institute and the Costa Rican Institute of Fisheries and Aquaculture. L&E
EURO AREA FISCAL UNION Greater fiscal integration to strengthen the resilience of euro area EMU. Deficiencies in the architecture of the euro área In contrary to expectations, the introduction of common currency helped that over time the economies of the euro area increasingly resembled or to better resist shocks. Real convergence was much lower than expected, and country-specific shocks, arising at home or not remained significant and more frequent than expected. For example, reducing borrowing costs contributed to credit booms located in some countries. At the same time, the high degree of trade integration and especially financial risk created problems originating in one country could spread to other countries.
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Source: International Monetary Fund reater fiscal integration in the euro area can correct deficiencies in the system architecture, increase resilience to future crises and provide long-term credibility of measures that have been taken to address the crisis.
In a new report prepared by the IMF staff noted that progress on fiscal integration will help address a number of shortcomings in the architecture of the euro area. Along with the banking union, fiscal union would reduce the incidence and severity of future crises, strengthening fiscal discipline and providing a minimum insurance mechanism to address deep recessions. While the establishment of a fiscal union will take time, it is considered essential to define a roadmap for the implementation of such a union in order to anchor confidence in the viability of the euro area, thereby supporting the efforts of the current crisis management. The European authorities have taken important steps to strengthen fiscal governance frameworks and economically. However, the vigorous implementation of these measures and the establishment of strong enforcement mechanisms are an essential requirement for greater fiscal integration. According to the report, these safeguards are established, the application of an ex ante approach to fiscal discipline and insurance mechanisms between countries -as opposed to a strategy based solely on providing support when crises have been producedstrengthen architecture further and ensure the stability of the
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This was particularly evident in the worst of the current crisis as the problems in the banks raised doubts about the solvency of the sovereign, and in turn sovereign tensions exacerbated the pressure on bank balance sheets. Subsequently, turbulence spread between interconnected banks throughout the euro area. The report also notes that weak national policies exacerbated the effects of adverse economic shocks and European governance frameworks were implemented way too lax. As a result, when the crisis broke, countries didn’t have enough leeway to protect national economic slowdown. Moreover, there were not enough forces to prevent and correct market imbalances: when there was a negative economic shock, prices and wages are not adjusted downward to compensate for the loss of competitiveness, and mobility of labor remains limited within the currency area. Similarly, capital markets they were optimistic about the growth prospects of the region and were not convinced of the no-bailout clause, didn’t differentiate between appropriate and inappropriate fiscal policies. These interactions paved the way for outbreak of the crisis in the euro area in 2010: with limited tax leeway without any tool support for area-wide and without a “circuit breaker” to break the vicious circle between sovereigns and banks that accumulated imbalances in some countries soon transformed the financial turmoil and widespread economic shocks affecting different countries in systemic shocks, which endangered the union itself.
The approach taken to date -to address crises when they occur- has been costly, not only in terms of direct financial assistance, but also product losses and rising unemployment. Essential elements of a fiscal union The report notes that fiscal integration provides a framework of fiscal discipline and security mechanisms that help limit the economic and financial shocks ensuring the adoption of more effective national policies before crises occur. Naturally, social and political preferences determine the scope and the final configuration for greater fiscal integration in the euro area. However, lessons of the crisis and practices used in other tax junctions suggest that the following four elements are essential: • More effective monitoring of national policies and better enforcement of existing rules. With increased emphasis on structural fiscal targets and the ongoing reforms of the governance framework, design of fiscal policy has improved. However, going forward, restoring fiscal discipline and recovery of market discipline may require greater involvement of the center in national fiscal decisions and clarification of rules of rescue. • Increased risk distribution. The distribution of fiscal risks ex ante reduces the need for subsequent costly support. Therefore, whenever there is greater discipline national fiscal policy, all countries in the euro area will benefit from tax insurance mechanisms between countries. There are several options, such as the establishment of an emergency fund wide euro area, a system common unemployment insurance, or a budget for the euro area. In any case, we need a minimum distribution tax risk as a precondition in order to maintain market
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discipline, because this gives more credibility to no bail financial distribution mechanisms. • Central level debt. In the long run, when you have established appropriate governance structures -borrowing from the central level- backed by their own tax revenues, could help fund risk-sharing mechanisms, and reduce the possibility that large variations portfolios between sovereign entities providing a safe asset. • Fiscal support mechanism for banks in the euro area. The European authorities have made significant progress towards banking union. Measures to establish a single supervisory mechanism and a unique mechanism of resolution should be complemented with strong and immediate commitment to establish a proper support mechanism to anchor confidence in the banking system. While some banking accident insurance should be financed by the banking sector, a mechanism common support recapitalization, resolution and deposit insurance would help reduce the risk of infection. While the first three elements help to build a more stable binding medium and long term, the last item depends on time factor and, therefore, requires immediate attention. It’s essential to obtain political support for the establishment of a clear roadmap that describes the main features of fiscal union. While the process of fiscal integration will naturally take time, historical experience shows that often effective crisis management has been accompanied by long-term reforms powerful, such as transfer of some fiscal responsibilities at central level. L&E
SPORTS CAPSULE
Paths of Mariano Rivera Giovana del C. Miranda G. - Abogada
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giovana.miranda@rbc.com.pa
t the beginning of the 2013 season, Mariano Rivera announced his retirement from Major League Baseball, I would say that anyone, least of Mariano himself imagined what it would mean his farewell to baseball and what your image is, the recognition of the fans, of teammates and current and former players of MLB, coaches, has been incredible to see how an entire country and not just the one he was born, held between tears and joy farewell to best closer of all time. Over 19 seasons, the New York Yankees Panamanian closer, managed to become the best closer of all time with 652 saves in 722 opportunities, and also deserving of nicknames as “Mo”, “Puerto Caimito express”,” SandMan” or as
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Ernesto Jerez say “forget it”, all to acknowledge the work of Mariano. Many describe it as a simple man of few words, loving family, strong faith in God, willing to give without being recognized, are precisely those qualities and passion for the sport made him an exceptional player and loved by his fans, colleagues and friends. His career was full of success, but that didn’t came overnight, had to work hard to achieve, was signed as an undrafted free agent in February 1990, in its early seasons Mariano step several ups and downs in minor league deal with an uncertain future to the point that his cousin outfielder Ruben Rivera on brightness then Mariano.
bobblehead with the image Mariano Rivera shared the Prospect was opener, step set-up man until he found his New York Yankees that day in the stadium and those who way and that was to become the Yankees’ star closer to New were left without the memory offering up to U.S. $ 250.00, York, achieving a success that in principle there loomed. but then remembered Panamanian propaganda MASTERCARD card and said that’s priceless. The farewell party starts, with special tributes to him by MLB teams to “Mo”, getting all kinds of gifts like Metallica’s We made a stop to our day to day, to join the tribute to Golden Record Enter Sandman received from Cleveland the work of Mariano Rivera, who is seen as a candidate for Indians and Hall of Fame Rock and Roll, two bottles of the Hall of Fame and has earned all tokens of appreciation, sand from the mound of Tiger Stadium and Comerica respect and love they have given the Yankees fans in ManPark, custom surfboard, bike ride with the number 42, hattan, were years of sacrifice and discipline but in the end portraits, customizing a Delta Airlines plane, jeans, boots it all pays off and certainly Mariano received his. and hats, but certainly at the time that captured attention of many was the “rockingchair of brokendreams” being Nothing more true that “no one is a prophet in his own handed Minnesota Twins made from broken bats and so land” and it has proven to Mariano Rivera, who despite many other gifts. Similarly received contributions for his receiving many compliments, affection and recognition of people in the United States of America and other plaFoundation. ces, has not received the same of part of his countrymen, On September 22, his team paid tribute to the man who re- his critics rightly or wrongly, that is why, I can’t conclude peatedly thrilled the Yankee Stadium with gifts and remo- without mentioning the words of our beloved and respecving the number 42 from lineup, in simple words Mariano ted Mariano Rivera and listen in as many games say now accompanied by his wife and children thanked everyone is the turn off and go when in an interview asked What is for their support including his native Puerto Caimito and the basis of your humility? “My father. He worked hard to his homeland. They shared with him that time former team feed us. players and even former coach Joe Torre, administrative, and support staff all had words of praise and thanksgiving. When I went to the U.S. from Panama, in 1990, I played hard because I wanted to honor my father. I have been blesThere were many months of tension, not only by the pressu- sed to play baseball at a high level, but that doesn’t make me re of the games, but for the removal of Mo and so comes the better than others. I had the opportunity to do something I moment of truth, which would be the last game of Puerto love, but that doesn’t make me better than others. My father Caimito Express at Yankee Stadium, which was packed of taught me that, and will always be grateful” (Interview offefans despite being the team no chance to go to the postsea- red to Alfred Santasiere III and published in Yankee Magason, they were united in one last glimpse fact Mo throw at zine in Spanish Magazine Special Edition 2013) home, you saw people grow and establish itself as a player. These words describe the best closer or closer of all time in In the bottom of the eighth inning, Mo leaves the mound, professional baseball in United States, Mariano “forget it” who received a warm welcome from his fans, in tears, Rivera. L&E cheers and applause people did nothing but pay tribute to the most acclaimed baseball relievers in the major leagues , I don’t mind that the team was losing, it was important to see Mariano. After taking the first two outs of the ninth, team captain, Derek Jeter, came together with pitcher Andy Pettitte, who also retires at end of the campaign, and asked the ball to Mariano was at that moment that leaves stay afloat all his feeling. For Panamanians who were in the stadium that day was unforgettable and impressive watching an entire stadium cheering a Panamanian, faces reflected sadness yet joy, feelings hard to explain and not to mention the 18,000 30. Legislación y Economía - September 2013
CULTURAL CAPSULE The Home dresses of holiday Mariela De Sedas de Sanjur
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mariela.sanjur@rbc.com.pa
n September 4, the Garden Club of Las Cumbres presented “ Home dresses of holiday “ involving Analia Quijano and Alex Gaudiano. Where the international expert on Japanese arrangement “Ikebana”, Professor Analia Arango de Quijano showed us how we can integrate this style to decorate our home and family events. Equally renowned decorator Alex Gaudiano from AGS
decorations, were demonstrating in each of his creations, with little money and some creativity can do everyday something exceptional. All present enjoyed a wonderful evening, these teachers of decoration shared their talent, teachings and floral design tips. L&E
Activities and celebrations for the month of october 2013
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at Teatro Anayansi. • Beauty and the Beast: weekend of the 18 and 25 October, Association of Parents of CSA will be presenting at • Pink and Light Blue Ribbon Cancer Campaign: Oc- Colegio San Agustin Theatre the play the “Beauty and the tober is worldwide dedicated to preventing breast cancer Beast” directed by Edwin Cedeño and Musical direction and more recently, prostate cancer. The campaign slogan Ezequiel Rangel. The entire cast is made up of students of the College and is a benefit of the social work of the As“Celebrate life, get your test on time.” sociation and Augustinian Social Service works performed • Strong Young in Tough Times. Carlos Sanchez Cau- annually Kankintú Mission in Bocas del Toro. temoc October 3 at 7:30 pm at the Club Union. • Women We run: Sunday October 20 will be held at • 3rd Power Club Run: On Sunday, October 6, 6:00 6:30 am on the tape Coast Mc Donald 5k Race to benefit am at the Cinta Costera will be conducting the 2nd. Cir- the Ronald McDonald Foundation. cuit Power Club/Adidas to benefit Friends of children with • AIDA: In October 30 Panama Opera Foundation Leukemia and Cancer Foundation. in co-production with the Embassy of Italy and Fondazio• Marc Anthony Concert Tour Live my life: October ne Festival at Torre del Lago Pucciano present the work of Giuseppe Verdi at Teatro Anayansi Atapla Convention 16 at Plaza Figali. Center. Proceeds are to benefit CASA ESPERANZA. L&E • Home of the Jubilee Year of Franciscans of Mary: Parish of Our Lady of Guadalupe, October 15 at 6:00 pm e recommend to put on your agenda so don’t miss the following events:
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Il Volo in concert: will be presented on October 15
31. Legislación y Economía - September2013
XXVIII National Orchid Exposition Mariela De Sedas de Sanjur mariela.sanjur@rbc.com.pa
On 14 and 15 September in the Metropolitan Park was held the XXVIII National Orchid Exhibition organized by the Orchid Society of Panama. During these two days, hundreds of people were able to observe more than 60 varieties of orchids from the provinces of Panama, Colon and Herrera, among which we highlight the orchid Holy Spirit and a variety of Phalaenopsis. During the event held briefings and selling orchids. L&E
32. Legislaci贸n y Econom铆a - September 2013
OUR TEAM PARTNERS José Javier Rivera Irene I. Bolívar C. 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
LAWYERS Pedro O. Bolívar C. Giovana del C. Miranda G. Maybe Mendieta Augusto C. García Alessandra Ocálagan Lucila Rivas
pedro.bolivar@rbc.com.pa giovana.miranda@rbc.com.pa maybe.mendieta@rbc.com.pa augusto.garcia@rbc.com.pa alessandra.ocalagan@rbc.com.pa lucila.rivas@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