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(English) Panama’s Corporation System and Bearer Shares in Comparative Perspective

Prof. Jason Sharman

The OECD and the Global Forum have repeatedly stated their commitment to the universal and consistent application of standards on transparency and information exchange according to a fair, transparent and objective process. This commitment applies both to the standards passed into law, and the actual implementation and enforcement of these standards in practice. Few standards on transparency and information exchange are as important as that relating to information on the identity of companies’ beneficial owners.

In this context, it is unclear why the failure to abolish or immobilise bearer shares in Panama in and of itself is a problem. As a matter of law, most OECD countries likewise allow bearer shares, and have not immoblised them, including important financial centres like the UK. As a matter of practice, available evidence strongly suggests that Panama is significantly more compliant with international beneficial ownership standards than many OECD countries, and especially the United States. In light of this evidence, it is difficult to take the above-mentioned commitments by the OECD to fairness, consistency and objectivity at face value in its treatment of Panamanian bearer shares.

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