Panama Imposes Counter-Measures Against Discriminatory Countries

The authorities also have the power to adopt migratory, labor, and tariff-increasing measures against natural or legal persons from countries that discriminate against Panama, and to suspend the movement of cargo or passengers via land, taking into consideration the nationality of those involved, as well as the origin and destination points. These actions will be revoked when, through diplomatic channels, the countries confirm that the measures against Panama have been suspended and that they will not implement similar practices to achieve the same objective; however, individuals or companies that, depending on the type of activity they carry out, cause any breach of previously established treaties or agreements will be excluded beforehand. The measures imposed against some countries of the European Union (EU) for keeping Panama on its list of non-cooperating jurisdictions in tax matters are, according to economists and businessmen, 'fair and apt,' because the required standards of transparency, collection, management, and control have been met; therefore, they not only agree with the Executive's decision but also believe that the restrictions should be more severe to guarantee respect for the national economy and interests. To date, the only sanction imposed by the Government on the EU following Panama's continued presence on its blacklist has been the restriction of its companies from bidding with the State, with the exception of Italy, Greece, and Spain. Meanwhile, the Ministries of Commerce and Industry, Foreign Relations, and Economy and Finance will draw up a list based on a technical report, which will include nations that act against the country's economic and commercial interests, harming its image and the attraction of foreign investors. The regulation states that, in addition to the ban on participating in State tenders, the Government may impose 'tax measures regarding the determination of applicable taxes on dividends or remittances abroad that are paid or credited as interest, royalties, commissions, fees, or any other type of income produced in the national territory,' as stipulated in the Fiscal Code. Law No. 48 of October 26, 2016, empowers the Executive Branch to apply the sanctions it deems necessary in cases of discrimination against any natural or legal person, good, service, public work, lease, value, title, or fund of Panamanian origin. After the approval of this law, in 2018 a list of 20 discriminatory jurisdictions was issued, which included: Peru, Brazil, Colombia, Ecuador, El Salvador, Venezuela, Croatia, Slovenia, Greece, France, Estonia, Uruguay, Lithuania, Poland, Georgia, Russia, Portugal, Chile, Cameroon, and Serbia.