Panama Enacts Law to Retaliate Against Discriminatory Foreign Enforcement Measures

IMPORTANT: The full content of this page is available to premium users only.

Thursday, August 1, 2002
Bruce Zagaris
On May 28, 2002 the continuing friction over tax, trade, and investment policy resulting from foreign and international enforcement initiatives, such as the OECD harmful tax practices initiative and the Financial Action Task Force on Anti-Money Laundering initiatives against non-cooperative countries and territories, was illustrated in the enactment by the Panama legislative of Law No. 85, which permits Panamanian authorities to take action against countries that impose restrictive measures against countries that impose restrictive measures against Panama. The legal instrument authorizes the President of Panama to apply measures of reciprocity against a country that has adopted discriminatory provisions against Panama if after bilateral negotiations the offending country does not revoke the same action within 45 calendar days. The law provides that any country that discriminates against ?any Panamanian source natural or corporate person, good, service, public work, lease, security, title or fund in their laws, regulations, practices, resolutions, judgments or sentences? is eligible for reciprocal treatment by the Republic of Panama as well as the specific retaliatory measures in the new law, without prejudice to the Republic of Panama being able to take in turn additional measures require to object to such discriminatory measures before the World Trade Organization (WTO) and/ or any other appropriate international organizations. Once the Panamanian Government identifies the discrimination, it must consult the foreign government that adopted the discriminatory measure, within 45 calendar days, to seek a bilateral solution of the case through an agreement that eliminates the effects of such measure. If no agreement satisfactory to bother parties is reached after the 45-day term, an inter-ministerial resolution with sufficient grounds signed by the Ministers of Commerce and countries that discriminate against Panama. The list must be public and indicate the nature of the discrimination, which will permit the representatives of the country discriminating against Panama or any other persons with a proven interest to submit the appropriate arguments for removal from such list.