With the purpose of improving the supervision of the risk-management practices of obliged non-financial subjects, as they are defined by Law 23 of 2015, for combating crimes of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction, Law 124 of 2020 was enacted in the Official Gazette on January 8, 2020, creating the Superintendence of Nonfinancial Subjects (hereinafter the “Superintendence”), which substitutes the current Intendance of Supervision and Regulation of Non-Financial Subjects (hereinafter the “Intendance”).
The changes introduced by Law 124 have the purpose of optimizing the performance of the activities of supervision and regulation of non-financial subjects, giving the institution a more relevant legal status and a legal framework which grants it greater independence when acting, including the establishment of a separate set of assets for the Superintendence and the faculty to elaborate its own preliminary budget.
It is convenient to point out that the Superintendence will be an autonomous entity of the State, with a Superintendent who will be appointed by the President of the Republic and ratified by the National Assembly, who may only be removed from their charge due to the causes expressly stated in Law 124 and by decision of the Third Chamber of the Supreme Court of Justice, in case the Executive Branch or the Board of Directors of the Superintendence request the Superintendent’s removal.
The Board of Directors will be the maximum consultation, regulation and general policysetting body of the Superintendence.With respect to the functions of the Superintendence, it is worth mentioning that Law 124 expressly states that it will have exclusive competence to regulate and supervise, in the administrative sphere, obliged non-financial subject domiciled in Panama, in order to ensure the effective application of prevention mechanisms established to strengthen public trust and the integrity of the non-financial sector. Among the obliged non-financial subjects supervised by the Superintendence we can mention the following:
- Companies in the Colon Free Zone, the Panama Pacifico Area, the Baru Free Zone and other free zones
- Casinos and other physical or online establishments that carry out games of chance business
- Real estate promoters, agents and brokers when they are involved in purchase and sales of property for their clients
- Securities transport companies
- Pawn shops
- Companies that commercialize precious metal or stones
- Companies dedicated to the purchase and sale of used or new cars
- Attorneys and certified public accountants, when they carry out any of the activities expressly listed by the law on behalf of their clients, including the administration of money, securities and other assets; the incorporation, operation or administration of legal persons; acting as director or proxy for a legal person and the services inherent to the resident agent of legal persons, among others
The Superintendence may impose sanctions to those non-financial subjects who do not comply with the provisions of Law 23, or with any other provisions the Superintendence itself may issue
It is also appropriate to mention that Law 124 expressly authorizes the Superintendence to establish cooperation links with public or private institutions of a professional or educational nature in order to facilitate its supervision functions, as well as with supervisory foreign entities in order to strengthen control and supervision mechanisms and to update preventive regulations for the exercise of its functions.
Another novel aspect included in Law 124 is the creation of the career of public officials of the Superintendence, with the purpose of allowing a better management of the Superintendence’s human resources and to give greater labor stability to the officials who work in it, who would not be subject to the political comings and goings which may affect the permanence of many public officials in their respective charges. The Superintendence’s personnel may acquire the status of career public official after a trial period of two years, subject to a satisfactory evaluation. Career officials will have, among other things, the right to severance payments in case the labor relationship ends.
As a last point, we must clarify that the administrative structure of the current Intendance will remain in place for a transition period of twelve months. Law 124 also states that the current Intendent shall remain in their position until the President of the Republic appoints the Superintendent.