On the Black List of the EU - Again? and Now Why?
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On the Black List of the EU - Again? And now why? José Alberto “Pepe” Mujica Cordano Talk about good government Agreements between Panama and China Panama in its Teachings for first date Business Development in World Cup the Region Ngäbe -Buglé rbc.com.pa ISSN 1726-0485 nov. edition ´17 Colaboradores en esta edición José Javier Rivera J. Rafael Fernández Lara Giovana del C. Consejo Miranda Garzola John C. Cheng C. Editorial Hernán Ruiz y Alfredo Burgos Javier Said Acuña Augusto García Idalia Ballesteros David Rodríguez Ailen Galván Casilda Quiróz Lidia Domínguez Ana Sofía Corrales Mariela de Sanjur Gabriela Melgar José Javier Rivera J. Donna Ballestero Giovana del C. Miranda G. Portada y Diagramación: Virginia Medina Fotografía: Mariela De Sedas de Sanjur Rivera, Bolívar y Castañedas @rbc_abogados RBC Abogados NOVEMBER 2017 Editorial 06 PANAMA ON THE BLACK LIST OF THE EU - AGAIN? Content AND NOW WHY? 31. Polítics 64. Fashion PRESIDENTS OF COLOMBIA BORN IN PANAMA 66. Cultural Capsule 35. Panamanian Economy AGREEMENTS SIGNED BETWEEN PEOPLE’S REPUBLIC OF CHINA AND THE REPUBLIC OF PANAMA 48. World Economy CHINA AND ECLAC STIPULATE THEIR COOPERATION TO PROMOTE TRADE AND INVESTMENT WITH LATIN AMERICA AND THE CARIBBEAN 54. Illustrious People JOSÉ ALBERTO “PEPE” MUJICA CORDANO 58. Sports Capsule NAILS, THEIR IN- FLUENCE ON THE APPEARANCE OF 64 WOMEN Invited Writer 09 Nation Building and Autonomy in the Socio-Economic Development of the Indigenous Peoples of Canada: Teachings for Business Development in the Ngäbe-Buglé Region Norms Consult of interest Doctrine & SPECIALIZED SUPERIOR TECHNICAL INSTITUTE Jurispru- dence 12 AITSA CAN REDUCE PERIODS OF CONCESSION CONTRACTS OF COMMERCIAL SPACES BLOCKS 18 Legislación y Economía November 2017 Editorial Panama on the BLACK LIST of the Augusto García - Abogado EU - Again? And now [email protected] why? n December 5, the Ministers of Economy and vestigations, to demand additional documen- Finance of the European Union (EU) adopted a tation for sustenance of fiscal operations. black list of tax havens, including the Republic Oof Panama, classifying it as a non-cooperative The reactions in our country were not long in co- jurisdiction in tax matters. The rest of the adop- ming. The Foreign Ministry of the Republic ex- ted list is made up of American Samoa, Bahra- pressed its rejection of the inclusion of Panama in, Barbados, Grenada, Guam, South Korea, in the aforementioned list, noting that said mea- Macao, Marshall Islands, Mongolia, Namibia, sure “ignores the clear progress of the country Palau, Samoa, Saint Lucia, Trinidad and Toba- in terms of cooperation and fiscal transparen- go, Tunisia and the United Arab Emirates (UAE). cy”, likewise claimed that “The Republic of Pa- nama has adopted international commitments With the inclusion of Panama in aforementio- in record time, and made an unprecedented ned list of non-cooperative countries in tax process to adapt its legal framework. Pana- matters, the EU reserves right to apply sanc- ma today has no outstanding issues regarding tions of different natures as restriction re- international standards of tax cooperation.” garding benefit of European economic funds for development. Likewise, within publication In this sense, various unions and sectors of made by the EU, suggestions are included for civil society also expressed their rejection European tax administrations in relation to of the inclusion of our country in a new list financial operations carried out by their na- of non-cooperative countries in tax matters, tionals in jurisdictions included in said list, emphasizing the numerous adjustments to among which elimination of deductions and domestic legislation and control mechanisms 6 exemptions for companies controlled from and tax auditing that have been introduced in the foreigner, to revert burden of proof in in- recent years with the aim of complying with Legislación y Economía November 2017 the standards of various international or- which have meant not only legislative adjustments, ganizations regarding fiscal transparency. but also of significant changes in administrative structures in charge of exercising and overseeing the Panama’s efforts in matters of In- transparency of financial operations in our country. ternational Fiscal Transparency In this order of ideas, we find that since 2010 Despite the irrefutable advances of our coun- try in terms of compliance with international tax and as a response to the observations received standards, the European Union has resolved to from various international organizations such include Panama again in a list of non-coopera- as the Organization for Economic Cooperation tive countries, arguing on this occasion that our and Development (OECD), our country imple- country has not committed itself clear to amend mented a series of adjustments to our internal or eliminate the preferential regimes contempla- legislation to international transparency stan- ted in our domestic legislation for the year 2018. dards, among which the following stand out: This new inclusion of our country in these discri- minatory lists leads us to question the policies and .Subscription of multiple Agreements to prevent strategies adopted by the Foreign Ministry and the International Double Taxation and Exchange of Ministry of Economy and Finance in front of these Information in Tax matters. Currently, Panama international organizations, which beyond making has negotiated 20 International Double Taxation observations based on objective standards in mat- Agreements, of which 17 are already in force after ters of international fiscal transparency, increasin- they have been signed and ratified. Likewise, 10 gly apply more subjective criteria aimed at tighte- Tax Information Exchange Agreements have been ning their position on our country progressively and negotiated, of which 9 are already in force. indiscriminately increasing their demands regar- ding the demand for increasingly sensitive chan- Incorporation into our internal legislation of rules ges in our legal, economic and financial system. of adaptation to treaties to avoid double interna- tional taxation, including legislation on Transfer The complicit silence of the OECD and FATF Pricing. A proof of what we have pointed out is found in Implementation of a system of immobilization of the recent draft Law that seeks to criminalize tax bearer shares in the Panamanian Legislation. fraud and typify it as a conduct precedent to the crime of money laundering, a legislative initiati- Implementation of Law 23 of April 27, 2015 that ve that suffers from multiple deficiencies in the adopts measures to prevent money laundering, financing of terrorism and financing the prolifera- criminal and tax area, and it has been promoted tion of weapons of mass destruction, and dictates without the due dialogue and consultative pro- other provisions. cess required for a project with such an impact with the sole purpose of satisfying the require- Automatic exchange mechanisms were adopted ments of the Financial Action Task Force (FATF), according to the requirements of the OECD Global as well as the OECD itself, organizations that have Forum. maintained a complicit silence regarding to this inclusion of Panama in the black list of tax havens Adherence to the Convention on Mutual Adminis- by the EU, taking into account that a large part of trative Assistance in Tax Matters, as well as to the the representatives of the countries in the OECD, Inclusive Framework of the Erosion Project of the the FATF and the Council of Ministers of Eco- Taxable Bases and Transfer of Benefits (BEPS). nomy and Finance of the EU, are they are aware of the adaptation policies adopted by our country. The measures listed above are some of the most The foregoing assumes an alarming connotation representative in a long list of adaptations imple- if we take into account that the aforementioned mented by the Republic of Panama with the sole draft of the law classifies as tax fraud, among purpose of complying with the requirements of other conducts, the omission in an income state- international bodies regarding fiscal transparency, ment of taxable income; include false information 7 Legislación y Economía November 2017 in the affidavit; keep accounting books with fal- try until so much is not adopted a much more se information and voluntarily simulate lost the rigid position that requires reciprocity in the omission of payment of taxes, notwithstanding evaluation of these international organizations. evaluation and evaluation of said behaviors to determine existence or not of fraud in the actions In this order of ideas, it is important to point out of taxpayers are reserved for the often subjecti- that the impact of the inclusion of our coun- ve criterion of the Directorate General Income of try in these lists extends its negative effects the MEF, aspect that is extremely dangerous in not only to the financial and service structure attention to the antecedents in which said insti- of our country, but also to the Panama brand tution has been a participant in scandals of abu- at an international level which already It has se of authority to the detriment of the taxpayers. been seriously impacted by the famous inves- tigations published by the International Con- The accumulation of exposed situations throw sortium of Investigative Journalists (ICIJ). us to the conclusion that beyond the firm will demonstrated by our country to establish As you all remember, on April 3, 2016, the ICIJ substantial improvements to our internal sys- published in 109 media outlets and in 76 coun- tem, at no time our diplomatic representati- tries the results of an investigation carried out ves have managed to establish a negotiation through illegally stolen information from a Pa- close to the reciprocity in matters of fiscal namanian law firm, which linked thousands transparency international, in which there has of companies from all over the world that had been significant recognition by none of the- nothing to do with Panama, where Panama- se international organizations regarding our nian companies didn’t represent 30% of the progress, which makes it imperative to apply total.