¿EMPLEOS? CONTROL DE PRECIOS JUICIO POLÍTICO DONALD TRUMP La debilidad de EUROPA ANGELA MERKEL LA LÍDER DE EUROPA www.rbc.com.pa ISSN 1726-0485 Edición Mayo ‘17 Colaboradores en esta edición José Javier Rivera J. Rafael Fernández Lara Consejo Giovana del C. Miranda Garzola Editorial Augusto García David Saied Judá D. Rodríguez Joel Rincon Ailen Galván Lidia Domínguez Casilda Quiróz Lisbeth Martéz Albin Rodríguez Mariela de Sanjur José Javier Rivera J. Giovana del C. Miranda G. Portada y Diagramación: Virginia Medina Fotografía: Mariela De Sedas de Sanjur Rivera, Bolívar y Castañedas @rbc_abogados RBC Abogados MAY 2017 06 Editorial THE PRICE CONTROL IN PANAMA: A LOOK AT Content LEGALITY OF THE MEASURE 53. Politics THE SOCIALIST PARTIES OF PANAMA 60. Panamanian Economy CONSUMER PRICE INDEX 72. World Economy CONDICIONES LABORALES CONTINUARÍAN DEBILITÁNDOSE EN 2017 Y DESEMPLEO URBANO PODRÍA SUPERAR EL 9% EN LA REGIÓN 81. Environmental Capsule 82. Illustrious People ANGELA MERKEL - THE LEADER OF EUROPE 82 86. Sports Capsule 89. Cultural Capsule Invited Writer The Weakness of EUROPE 09 Norms Consult of interest Doctrine & REGULATION OF TRUSTEES AND TRUST Jurispru- dence THE ACCUSTIVE CRIMI- NAL SYSTEM AND THE 28 ALTERNATE PENAL CONFLICT SOLUTION 38 PROCEDURES Editorial The Price Control in Panama: A Look at Legality of the Measure Augusto García - Attorney [email protected] ur Political Constitution contains a 282, 295 and 298 of our Constitution. series of provisions that frame what the Odoctrine denominates like the “Econom- Established the above, it is important to ic Constitution”, that establishes of un- refer to price control system on 22 prod- equivocal way that our economic system ucts of the basic basket that as pub- is based on a model of market economy, lic knowledge, implemented since 2014 whose main actors are particular compa- National Government, which being an- nies, Added with the power of intervention nounced as a temporary measure, has of the State, to ensure and order effective- been extended by a plural number of Ex- ness of the economic system, and effec- ecutive Decrees for almost three years tiveness of fundamental rights, such as since its implementation. During this labor law and the right to social security. period the system has been widely ques- tioned by different sectors of national While individuals are the main players in economy regarding its effectiveness in national economy, this role is not absolute combating inflation and configuration given that the Constitution itself estab- of serious distortions to free market. lishes in a restrictive manner principle of free market competition and establishes This measure has its origin in the ex- bans in exercise of trade and industry for traordinary power of intervention in the individuals concerned to prevent config- national economy established by article uration of acts that adversely affect free 284 of the Constitution with the aim of 6 development of the market, and affect guaranteeing social justice; However, national economy, as set forth in articles this power is not absolute. In addition, Legislación y Economía May 2017 its exercise is of extraordinary char- criminately extending application of said acter and must be regulated by Law. Decree for more than two years without having been accredited Technical justifi- In this sense, we find that Law 45 of cation and repeated recommendations by 2007 develops and limits the power of the ACODECO itself to seek alternatives economic intervention of the State in to application of such measure, such as national economy derived from Article promoting creation of peripheral markets. 284 of the National Constitution, defin- ing conditions required for application of In this regard, when examining the content price regulation as an exceptional mea- of Executive Order 165, we find that it only sure, Defining in article 199 the essen- makes a timid reference in its motivating tial budgets for application of said mea- part to an alleged “increase in the price of sure, which we can identify as follows: products of the basic food basket” as an essential element to motivate price con- This is an exceptional and temporary trol measure decreed, without indicating regulation. what are market restrictions required by Law 45 of 2007 as an essential budget It is applicable only when there are situa- to enact such a measure, an element tions in which restrictions on the efficient that makes it clear that this is a measure functioning of the market or the emergence that, beyond being based on Techni- of widespread monopolistic conduct by cal elements of an economic nature, are one or more economic agents with sub- due to political motivations, which have stantial power over the relevant market serious consequences for development exist which are an imminent threat to the of national economy, taking into consid- market, consumer and free competition. eration that the State has constitutional On April 21, 2017, the Chamber of Com- and legal structures to create mecha- merce, Industries and Agriculture of nisms and policies to combat this type Panama (CCIAP) filed a claim of nullity of occasional increases that may occur, against the Executive Decree No 165 of without the need to apply a med which July 1, 2014 “Establishing Temporarily is so severe for the development of free Maximum Retail Prices of 22 Products market competition, as price control is. of the Basic Food Basket in the Repub- lic of Panama, and Adopting Other Provi- Economic Distortions derived from the sions,” and their respective extensions. application of Price Control. In addition to violations established The referred Claim is based on the fact in our legal system in the area of con- that the National Government through sumer protection, price control mea- the Ministry of Commerce and Indus- sure introduces serious economic dis- tries of Panama (MICI) violated a plural tortions to free market that by mandate number of legal norms when issuing Ex- of the Political Constitution prevails in ecutive Decree No. 165 and its respec- national economy and that cause se- tive extensions, in view of which in at any rious economic damages to all mar- time, existence of essential budgets re- ket players including final consumers. quired by our legal system in respect of In this sense, we find that in addition to Free Competition and Consumer Protec- price controls on the 22 products listed tion was sustained, in addition to hav- in Article 1 of the Executive Decree, this 7 ing exceeded its legal powers by indis- measure includes a control of margins of marketing to 152 products, which causes as As has happened in sister countries many of these products to cease to be of Latin America in which purely politi- which have a special connotation, taking cal and populist motivations regarding into account that it is a measure that has the implementation of this type of mea- altered consumption patterns, increas- sures have had serious consequences for ing the demand for regulated products to national economy, which in turn impacts detriment of supply, which has a negative other elements of the institutionality cre- impact on competitiveness of Econom- ating political and social upheavals that ic operators affected by this measure. in no way contribute to social justice for which these tools were contemplated. In addition to the above, it should be noted that while the economic agents in- Based on the above, it is of the utmost volved in the marketing chain are hit by a importance that judicial authorities ful- decrease in their competitive capacity as fill their role of protecting legal system a result of the measure imposed by Ex- and democratic institutionality by act- ecutive Decree 165, the National Govern- ing as a control and curb of administra- ment has Increased the sale and distri- tive actions that deviate from legality, bution of some of the products regulated and in this way to counter judicial delay through fairs and state markets, as is the that affects so much our justice system case of rice (bag of 20 pounds), which is and that it is evident in case of the De- at a price disadvantage with which it is mand to which we have referred since sold at fairs of the Government at a price more than a month has passed since of Five dollars ($ 5.00), which represents presentation of the same one without a 40% decrease in rice sales and which is there being any pronouncement regard- set in an evident case of unfair competi- ing the Admissibility of the same, let tion on part of national government itself, alone the precautionary suspension of an element that It breaks with our legal the effects of measure demanded. L&E system in matter of Free Competition and Consumer Protection as well as with limits established in the Law regarding the application of price control measure. We consider that application of price control contemplated in our Politi- cal Constitution seeks to safeguard social justice in our country, notwith- standing the way in which it has been applied through this Decree, it de- naturalizes and distorts its objective. It is clear that what application of this system of price control obeys political motivations and lacks adequate tech- nical support, moving away from legal bases and budgets, undermining demo- 8 cratic institutions, negatively impacting development of the national economy, Legislación y Economía May 2017 Invited Writer The Weakness of EUROPE Jesús Alberto García Riesco Instituto Español de Estudios Estratégicos [email protected] n a thousand years (from 900 to 1900) ues that allowed it to conquer the world. Europe went from being irrelevant to domi- Inating the world and imposing its languages Europe conquered the world and ideas. Such a feat was possible mainly Europe in year 900 was like Afghanistan because of military organization and tech- now and it only contributed skins and slaves nology of gunpowder, but above all because to the flourishing Middle East, neverthe- of religiosity of combatants and cohesion less thousand years later managed to im- of small groups.