Financial Crime Definition in Panama: A New Era of Transparency and Accountability

Panama’s government has introduced a new chapter in its criminal code, defining and punishing various forms of financial misconduct. This move aims to combat financial crimes and promote transparency.

The New Chapter on Financial Crimes

The Republic of Panama has incorporated Chapter VII into Title XII of the Second Book of the Criminal Code, specifically addressing “Financial Crimes.” This new chapter outlines seven different financial crimes, each carrying a prison term ranging from three to ten years.

Punishable Conducts

The following are considered punishable conducts:

Possession, unlawful use or illegal transfer of financial resources
Falsification of accounting and financial information
Fraudulent approval of credits
Illegal exercise of financial activities
Disclosure of confidential information
Illegal purchase and sale of securities

Severe Penalties for Involvement in Financial Crimes

Individuals who engage in financial crimes with the participation of an employee, director, officer, administrator, or legal representative of a banking entity, financial corporation, or other entities that receive or intermediate with public funds face more severe penalties. These individuals can be sentenced to prison terms ranging from six to ten years.

Use of Technological Means and Fraudulent Maneuvers

Article 393 A punishes those who use technological means or fraudulent maneuvers to take over, make unlawful use, or permit the illegal transfer of financial resources. The penalty for this crime is a prison term of three to five years, increasing to six to ten years if committed with the participation of an employee or other authorized individual.

Article 393 B imposes a prison term of four to seven years on individuals who destroy, hide, or falsify accounting books, financial statements, or other financial information for personal gain or to obtain credit.

Fraudulent Approval of Credits

Fraudulent approval of credits is another serious offense, punishable by a prison term of four to seven years. This crime is committed by directors, officers, managers, administrators, legal representatives, or employees who approve credits or financing in violation of legal regulations, leading to the compulsory winding up of an entity, insolvency, or permanent illiquidity.

Illegal Exercise of Financial Activities

Receiving financial resources from the public without proper authorization is considered illegal exercise of financial activities and carries a prison term of three to five years.

Disclosure of Confidential Information

Article 393 E imposes a prison term of three to four years on those who reveal or use illegal confidential information related to securities registered with the National Securities Commission or negotiated in regulated markets.

Conclusion

The government has taken a significant step towards promoting transparency and accountability by introducing these new financial crimes and punishments. With this law, Panama aims to combat financial misconduct and protect its citizens’ interests.

About the Author

Silka Nino de Arrue, Pardini & Asociados