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Acciones al portador, lo que está en juego

By Eduardo Morgan Jr.

Published on La Prensa

April 19, 2013

The controversy raised around the bill that intended to immobilize bearer shares has left in the community the impression that the attorneys who opposed the bill defend personal interests that were contrary to those of the bankers who supported its approval.

Nothing is further from the truth. Quite the contrary. The immobilization and subsequent custody of bearer shares may have represented an important additional income for law firms, such as the one I represent, because it would have allowed us to charge for a new service to customers, whose bearer shares we would guard. Notwithstanding, the only interest we seek is to defend Panama as the international service center it has become, of which the banking sector is the most important piece.  Let me explain myself.

As has been proven over and over again by reading the original documents published by the Organization for Economic Cooperation and Development (OECD) and its global forum (see Peer Review Report Phase 1 Legal and Regulatory Framework Panama), the immobilization of bearer shares is only one of several requirements included in the guidebook created by them, whereby, noncompliance would motivate the inclusion of  “offender” countries on a blacklist that would put over their heads the Damocles’ sword of strong sanctions.

Another demand is the requirement that all companies listed in our Public Registry keep ledgers detailing their operations, even if these operations are carried out outside of Panama, which would begin to crack the tax system based on territoriality. But the requirement that completes the Global Forum’s menu, and that could derail the banking center, is the one that would force Panama to sign agreements to exchange tax information with any country that requires it. Inexplicably, the bankers do not want to see the enormous danger that this requirement represents. To understand the full extent, just read the study published last month by the Superintendence of Banks where it is clear that 38% of our bank deposits come from countries in the region such as Colombia, Venezuela, Ecuador, Peru and others and not from OECD country members.

If Panama submits to such requirements and sign tax information exchange agreements to avoid being included in the Global Forum’s blacklist we can kiss the banking center goodbye! The mere suspicion that this could happen would be enough to cause a withdrawal of funds from those who have trusted in the privacy laws that have regulated our banking system for more than 40 years. It is necessary to emphasize that privacy is not synonymous with anonymity and money laundering, as some seem to think. Privacy is a sacred individual right in all democratic constitutions in the world, one to which sometimes people who may be victims of political persecution, family disputes or offenses against their freedom must resort to.

This reality explains the inalienable fight of those who oppose the bearer shares bill. We are not only defending the integrity of the law of corporations, immovable cornerstone of our service economy. No. Indeed we defend, above all, the survival of our financial center, whose elimination is the real objective of the OECD. Since globalization and technological development have allowed for the development of financial centers beyond the borders of the richest countries that make up this group, these countries have worked to prevent the emergence of any center that may compete with London, New York or Miami. This is not only my opinion, it has also been stated, without any hint of shame or subterfuge, by the OECD itself in the document Improving Access to Bank Information for Tax Purposes, paragraphs 36 and 37.

What should we do, against the threats of the OECD and the Global Forum? I start by noting that the fundamental difference between those who support the bill that aims to immobilize bearer shares and those who oppose is that we do believe that Panama has more than fulfilled its obligation of transparency in all that relates to international transactions. We have exemplary laws that require lawyers who incorporate companies to know their customer, which makes the issue of bearer shares irrelevant, and have signed a number of international agreements that allow national authorities at the request of a foreign authority, to investigate and determine if there is money in our banking center which comes from criminal acts.

If Panama has already complied, then there is no reason to bow before the OECD. Supporters of the project rely on the assumption that the powerful countries can impose whatever they want and the small countries have no choice but to obey. They cite the example of what has happened in the British Virgin Islands, Bahamas and Belize. They forget, however, that we are neither a British colony, nor Bahamians or Belizeans. We Panamanians, inhabit a nation that has over 500 years of history and that today, after tackling the most powerful country on Earth, has regained its Canal and its geographical position, reason why today it is a leader in economic development in the region. What to do then? Simply face the OECD and any of its satellites, to reach, through a real negotiating process and without an inferiority complex, what other generations of Panamanians have achieved supported by reason and fairness.

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