Agreement No. 007-2019 Modifying Article 1 of Agreement No. 005-2015 on Prevention of Misuse of Services by Other Obligated Subjects Under the Supervision of the Superintendence of Banks

Republic of Panama
Superintendence of Banks
AGREEMENT No. 007-2019
(of July 2, 2019)
"By which Article 1 of Agreement No. 005-2015 on the prevention of the improper use of services provided by other obligated subjects under the supervision of the Superintendence of Banks is modified"

THE BOARD OF DIRECTORS
In exercise of its legal powers, and

CONSIDERING:

That as a result of the issuance of Decree-Law No. 2 of February 22, 2008, the Executive Branch prepared a systematic arrangement in the form of a Single Text of Decree-Law No. 9 of February 26, 1998, and all its modifications, which was approved by Executive Decree No. 52 of April 30, 2008, hereinafter referred to as the Banking Law;

That in accordance with numeral 1 of Article 5 of the Banking Law, it is the objective of the Superintendence of Banks to ensure the solidity and efficiency of the banking system;

That in accordance with numeral 2 of Article 5 of the Banking Law, it is the objective of the Superintendence of Banks to strengthen and foster favorable conditions for the development of the Republic of Panama as an International Financial Center;

That Article 112 of the Banking Law establishes that banks and other supervised subjects have the obligation to establish policies, procedures, and internal control structures to prevent their services from being improperly used for the crime of money laundering, terrorism financing, and other related or similar crimes;

That in accordance with what is established in Article 114 of the Banking Law, banks and other supervised subjects by the Superintendence will adopt policies, practices, and procedures that allow them to know and identify their clients and employees with the greatest certainty possible, with the Superintendence retaining the authority to develop pertinent norms that align with the policies and norms in force in the country;

That by means of Law No. 23 of April 27, 2015, measures are adopted to prevent money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction;

That Article 19 of Law No. 23 of 2015 establishes the Superintendence of Banks, among others, as the supervisory body;

That Article 20 numeral 7 of Law No. 23 of 2015 indicates among the attributes of supervisory bodies, to issue guidelines and feedback to financial obligated subjects, non-financial obligated subjects, and activities carried out by professionals subject to supervision for their application, as well as procedures for the identification of beneficial owners of legal entities and other legal structures;

That Article 22 of Law 23 of 2015 establishes the financial obligated subjects that fall under the supervision of the Superintendence of Banks in matters of prevention of money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction;

That by means of Agreement No. 005-2015 of May 26, 2015, the Superintendence of Banks establishes matters related to the prevention of the improper use of services provided by other obligated subjects under the supervision of the Superintendence;

Agreement No. 007-2019

That Article 123 of Law No. 21 of May 10, 2017, modified Article 22 of Law No. 23 of 2015, adding other obligated subjects, among which are money transfer companies and exchange houses;

That through Agreement No. 008-2017, Article 1 of Agreement No. 005-2015 was modified in order to include within the scope of application, exchange houses, money transfer companies, the Agricultural Development Bank, the National Mortgage Bank, and savings and loan corporations for housing, as new financial obligated subjects;

That through the Prevention Agreement for other financial obligated subjects No. 004-2018 of October 23, 2018, guidelines were established for the prevention of the improper use of services provided by money transfer companies, in order to set specific parameters related to the activities carried out by money transfer companies;

That through the Prevention Agreement for other financial obligated subjects No. 005-2018 of December 11, 2018, guidelines were established for the prevention of the improper use of services provided by exchange houses, in order to set specific parameters related to the activities carried out by exchange houses;

That in working sessions of this Board of Directors, the need and convenience of modifying Article 1 of Agreement No. 005-2015 has been manifested, in order to exclude money transfer companies and exchange houses from the scope of application and thus uniform the applicable provisions in matters of prevention of the improper use of services provided by these obligated subjects.

AGREES:

ARTICLE 1. Article 1 of Agreement No. 005-2015 is hereby amended as follows:

"ARTICLE 1. SCOPE OF APPLICATION. In accordance with what is provided by Article 22 of Law No. 23 of 2015, which adopts measures to prevent money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction, it will correspond to the Superintendence of Banks to regulate and supervise new obligated subjects in this matter. The provisions of this Agreement will apply to the following obligated subjects:

1. Financial companies;
2. Financial leasing companies;
3. Factoring companies;
4. Issuers or processors of debit, credit, and prepaid cards, whether natural or legal persons, including those that issue and operate their own cards; with the exception of banking entities that already have regulation in this matter;
5. Issuing entities of payment means and electronic money;
6. Other corporate services carried out by fiduciary companies;
7. Agricultural Development Bank;
8. National Mortgage Bank;
9. Savings and loan corporations for housing."

ARTICLE 2. EFFECTIVENESS. This Agreement will enter into force from its promulgation.

Given in the city of Panama, on the two (2) days of the month of July of two thousand nineteen (2019).

LET IT BE COMMUNICATED, PUBLISHED, AND COMPLIED WITH.

THE AD-HOC PRESIDENT, THE AD-HOC SECRETARY,
Nicolás Ardito Barletta Luis Alberto La Rocca