PANAMA - PROFILE OF A PEOPLE
AND THEIR COUNTRY .
Panama has the most favorable commercial secrecy laws in the world. Legal changes in the Caribbean, and Europe have caused a spectacular loss of banking privacy, resulting in Panama rapidly becoming the world’s number one offshore financial centre. This country known as the "Bridge of the Americas" and "Crossroads of the World" is home to an enormous financial migration between the two continents and the two oceans. These are some the attributes that make it the most attractive financial centre for Americans and Canadians:
Panama’s currency is the U.S. Dollar which has circulated freely without exchange controls on the basis of a 1904 agreement between the United States and Panama
While Panama doesn’t have the largest it’s in the top two biggest Free Trade Zones in the world attracting most of the world’s multinationals
Panama has a modern international airport, excellent telecommunications and an advanced financial infrastructure; this includes over 145 international banks serving as the financial centre for all of Central and South America and the Caribbean.
Panama was the first country in Latin America to enact a trust law
Panama’s time zone is Eastern Standard, the same as Miami and New York; the professional and administrative class are highly educated and extremely competent; English, the language of business, is spoken throughout. This is the beneficial result of the U.S. presence now ended, and influence in the cities of Panama and Colon.
The constitution’s Banking Law and Numbered Account Law both contain provisions guaranteeing bank confidentiality. These laws forbid banks from disclosing client transactions to both national and foreign authorities.
While Panama and the United States have signed an MLAT covering money laundering, the U.S. failed to persuade Panama to include tax evasion in the treaty because of concern it would prove unfavorable and unprofitable to the offshore banking business.
Some other factors which have played a part in establishing the world’s leading invulnerable offshore centre as a banking, investment and growth haven, are:-
The absence of any currency restrictions - never imposed; the free circulation of the U.S. dollar as legal tender in cities and communities; the free international movement of capital; taxation laws typical of so-called "tax havens;" the lack of a central bank in charge of currency issuance and the creation of fiat money; all the convenience of enjoying a wide variety of currencies for doing business.
While no central bank exists, the National Banking Commission and the Government’s wholly-owned Banco Nacional do Panama (BNP) administer and supervise Panama’s central banking functions. The internal money supply is therefore not ruled by any national institution as this process occurs automatically through external factors
Of the major foreign banking offices and branches which left the country following the 1988 political strife resulting from the Noriega upheaval, virtually all have returned.
Banking legislation was revised to reflect the latest advances in laundering-detection recommended, indeed required by international agencies and influential national governments. Transactions over $10,000 are scrutinized.
BANKING IN PANAMA
The National Banking Commission has the authority to inspect the accounting records of a bank, to supervise solvency requirements and compliance with Cabinet Decree No.238. However, the Decree specifically safeguards the confidentiality of a bank’s records of deposits and securities belonging to private individuals or corporations and other entities.
The Banking Commission is prohibited from conducting or ordering investigations of the private affairs of any bank’s clients. No information obtained as a result of its administrative or supervisory activities may be revealed to any person or authority except pursuant to a request of a court of law and except that it be used as a part of consolidated data for statistical purposes.
Inspired by the 1970 banking law that guarantees free movement of funds with no impediment to their instantaneous transfer, and by much lower taxes, more than 30 countries are represented by commercial banks in Panama. The total number of companies registered exceeds 305,000. More than 6,000 Panamanians are employed by banks operating in Panama, 85 of them being foreign banks. Of the 140 banks (as of 1998) officially registered more than 70 provide full domestic and foreign services. 29 are licensed solely to conduct international operations, and the remainder have representative offices only. A number of major American banks have opened branches in Panama through which to provide customers with extra-U.S. financing and to facilitate the use of Eurodollar borrowings. Many banks use their Panamanian branch operations to channel Eurodollars into Central and South American markets and to finance trade. Offshore banking profits are exempt from Panamanian income tax. Panama is a wonderful place in which to conduct local and global business.
To prepare to receive the Canal from the control of the U.S., Panama’s efforts have been focused on modernizing and liberalizing the economy, re-structuring its foreign commercial debt, completing negotiations with the World Trade Organization, privatizing government-owned companies and passing legislation to make trade smoother and easier. The results are spectacular!
POLITICAL AND ECONOMIC STABILITY, AND TRADE
With the Noriega problem solved, the Government of Panama again welcomes foreign investment and holding companies. Overseas investors have always been helped in Panama. Since 1990 the country has passed a series of major constitutional reforms designed to strengthen democracy and the democratic process. These included the abolition of the Armed Forces, one the most significant changes in Panama’s political history.
The economy in this country of 2,400,000 people has remained strong, tourism continues to flourish and inflation at 2.3% is the lowest in all Latin America. GNP is growing by in excess of 5% annually while the increase in the creation of new employment is ticking along at over 5% p.a. Real GDP grow to $6.3544 billion in 1996 not too shabby for a small country of two and a half million precious people. The government has outlined a $700 million 5 year plan for the improvement of tourist resorts on the Atlantic and Pacific coasts.
Total trade passing through the Colon FTZ exceeds the figure reached during the regime of Gen. Noriega and is now close to $10.2 billion. The FTZ, which accounts for but 5% of GDP, enjoys steady growth, while Panama Canal traffic, which represents 10% of GDP, is climbing at a modest 2% p.a. To compensate for a decelerating growth in Canal revenues, tolls have been increased by a two-step method implemented in fiscal 1997 and 1998 being two increases of 8.2% and 7.5% on January 1.
In trade, exports have risen steadily since 1988 reaching $600 million while imports have rocketed to $2.5 billion, causing a substantial trade deficit on visibles. Imports arrive mainly from the U.S., Japan and Taiwan while two-thirds of exports and re-exports go to the Caribbean and Latin America, chiefly the Netherlands Antilles, Colombia and Ecuador.
To attract foreign investment the government has developed excellent institutional infrastructure, efficient public administration, extremely flexible and favorable policy guidelines and attractive fiscal and non-fiscal incentives.
Historically, the policies of the Panamanian government towards foreign investment have been so open that it hasn’t required a formal statement of policy! Legislation notably does not distinguish between nationals and foreigners. There are one or two minor exceptions - retail trade, for example, is reserved for Panamanian nationals. Foreign investors, regardless of their country of origin, are treated with civility.
AFTER PANAMA, PLUTOCRATS PUSH DOLLAR FOR ALL OF AMERICAS
The world shadow Elite is on schedule.
Even as the NATO summit was doing its bidding by establishing itself as the United Nations world army, Bilderberg was pushing another high-agenda item in Washington: Establishing the "Ameridollar," a common currency for the Western Hemisphere like the "euro" in the new superstate, the European Union.
The plan for "dollarization" of the Western Hemisphere came from Lawrence Summers, deputy secretary of treasury and a Bilderberg regular.
Summers’ boss, Treasury Secretary Robert Rubin, comes from Goldman Sachs, which is always represented at Bilderberg’s secret meetings. Rubin also supports "dollarization."
"If dollarization helped to achieve greater economic stability and growth in countries in our hemisphere which have suffered so much instability in the past, it would clearly be in the economic and broader interest of the United States," said Summers.
At Summers’ side, expressing approval of these words before the Joint Economic Committee of Congress, sat Alan Greenspan, chairman of the Federal Reserve Board and another Bilderberg lapdog. They spoke on April 22 during the NATO summit in Washington.
Summers and Greenspan agreed that a "dollar zone" would benefit all countries involved, including the United States.
Summers said Panama - the only Latin American country that already has adopted the dollar - is also the only Latin nation where citizens can obtain fixed-rate 30-year mortages like those in the United States.
In Argentina, Summers said, a rigid link between the peso and the dollar has not allowed interest rates to fall as much. That is the main reason Argentine leaders are considering eliminating the link and adopting the dollar, he said.
Dollarization will bring economic stability to many countries and might have prevented some of last year’s currency crises, said Greenspan.
El Salvador and Mexico are among countries considering adopting the dollar. The finance ministers of eight Central American countries are set to meet in July to discuss dollarization.
The issue was raised about dollarized countries blaming the Unites States during bad times because interest rates and other decisions would be made by the Fed, not their own governments.
"In difficult times, the loss of domestic monetary sovereignty would foster resentment and encourage policy-makers to reflect blame for problems onto the United States," Greenspan said.
But he added reassuringly, "I don’t think it an issue which should terribly much concern us."
Creating a European-style single currency for the "Americas" has long been a goal of Bilderberg and its brother group, the Trilateral Commission. These secret groups have interlocking leadership and a common agenda: A world government.
Ultimately, the Western Hemisphere is to become the "American Union," similar to the European Union. This is to be accomplished by expanding NAFTA throughout the hemisphere. As the NAFTA commission expands accordingly, it is to evolve into an American parliament.
The third great region of the world is to be the Pacific Union, which is already emerging.
These three great regions are being established for the administrative convenience of a world government: The United Nations.
The Spotlight, May 17, 1999
IRONY: Alan Greenspan was an eloquent spokesman for the Gold Standard, and formerly a vociferous critic of the Fed System’s subservience to the (international) banking cartel. That was in 1966. After he became a director of J.P. Morgan & Company and was appointed Chairman of the Federal Reserve in 1987, he became silent on these issues and did nothing to anger the Creature he now served. Even the best of men can be corrupted by the rewards of politics.
Page 403 of "The Creature from Jekyll
Island - A Second Look At The Federal
Reserve" by G. Edward Griffin
PANAMA - TYPES OF BUSINESS ENTITIES
Panama’s legal system is based on civil law, as opposed to common law. Nonetheless, because of its traditional close ties with U.S. commerce, in 1927 Panama adopted a Corporation Code similar to the old Delaware Corporation Statute. Besides the corporation (the "Sociedad Anonima" or S.A.) Panama has several types of modern business entities; the single limited partnership, joint stock association, the general partnership and the limited liability partnership.
However the Panamanian technology that has captured the attention of many investors and which has some similarity to the Liechtenstein Anstalt and Stiftung (or Establishment and Foundations) is the Private Interest Foundation. It is unbelievably adaptable, and it can be formed very much cheaper than its Liechtenstein equivalent. In 1995 Panama enacted a law to govern the establishment of the Private Interest Foundation. Many thousands have since been funded as the foundation and its accompanying corporation(s) represent a serious challenge to the more standard offshore trusts and corporations.
SOME DIFFERENCES BETWEEN THE PANAMANIAN PRIVATE INTEREST
FOUNDATION AND LIECHTENSTEIN’S FAMILY FOUNDATIONS
Some differences in Panamanian and Liechtenstein foundations and nuances of law are as follows:
* There is no absolute obligation to contribute capital in the Panamanian PIF, though a capital requirement of $10,000 is stipulated. However in the Liechtenstein legislation a minimum of 30,000 SFr. is mandated.
* There’s no accounting requirements for the PIF but there is for corporate bodies of any nature in Liechtenstein.
* The Liechtenstein Foundation has limited liability in proportion to (a) the capitalised amount or (b) to the funds donated to the foundation by the founder and other donors. The Panamanian PIF and its associated corporate bodies have unlimited responsibility pursuant to Panamanian civil law.
* Heirs cannot attack assets held in a Panamanian PIF. In contrast, the Liechtenstein Foundation may be judicially assaulted by heirs of the founder by virtue of Article 560.
* The Panamanian PIF’s annual maintenance fees are not based on contributed capital, being a fixed annual fee of $150. Liechtenstein imposes annual cost in respect of a minimum capital tax (1,000 SFr. and up), (and for establishments whose capital is divided up into shares, additional based on treatment as a corporation). This capital tax is 0.1% on net assets managed and capital tax of around 0.05% on a sliding scale. A withholding tax of 4% is also levied on "dividend" distributions from the foundation. Panama’s exaction re-stated is limited to a flat annual fee of $150.
* Under Panamanian law there are two types of foundation, Irrevocable and Revocable (Article 12). In Liechtenstein the Establishment Law enables three, the Family Foundation, the Ecclesiastical Foundation and the Mixed Foundation (Article 553).
* In the Panamanian PIF the parties may if they wish establish a supervisory body or committee. In Liechtenstein the foundations are subject to supervision by the government which can exercise wide powers, for example ordering an audit and ordering the dismissal of the foundation’s governing body - I.E. public law (see Article 564)!
* Foundations organised in accordance with a foreign law can without being dissolved become subject to Panamanian law - I.E. they can continue in Panama by application and certification. Assets can then be transferred to the newly registered Panamanian foundation. The Liechtenstein foundation law
* The Liechtenstein Foundation provides the option of transferring it into an Anstalt or Trust Organisation (a private or real trust, a trust used for commercial purposes or a trust settlement which is more of a trust legal relationship) under Article 570. The Panamanian law contains no such provision; thus avoiding the hazards of trust law controversy.
* Liechtenstein law while being extremely subtle and flexible does however present a problem. The Anstalt is treated under English Common Law, while a Stiftung is not. Contrary to English Common Law, under which trusts generally operate, Liechenstein law prohibits neither accumulation nor perpetuity. Anstalts have great flexibility in the secrecy of their operations which endeared them to the CIA, known to have used them. However, to illustrate the hazard referred to above, in the case of a Stiftung Americans using one, or who are beneficiaries of one, will be unable to determine whether U.S. authorities would classify a Stiftung as a trust or as an association taxable as a corporation for U.S. tax purposes. No such grey can areas arise with Panamanian PIF.
* Panamanian PIF’s are exempted from all taxation, assessments, and capital levies of any kind, provided that the assets of the foundation are:
(1) Assets held abroad
(2) Money deposited by individuals or legal entities whose income is not Panamanian and which is not assessable to tax for any reason whatsoever in Panama.
(3) Shares or securities of any kind, issued by corporations the income from which does not attract Panamanian tax - such securities can be deposited in the Republic of Panama though!
(4) Transfers of real estate, securities, CD’s, monies or any property connected with the purposes of the foundation. Neither can establishment or dissolution will such transfers will attract tax.
A SHORT SUMMARY OF ADVANTAGES FOR
FOREIGN INVESTORS SETTING UP IN PANAMA
A democratic government that firmly believes in private enterprise and which encourages foreign investment.
A privileged and strategic location facilitating world wide communications, transportation, and trade and commerce in general.
Foreigners and Panamanians are viewed as absolute equals under the Constitution (compare with Switzerland!)
An international finance and banking centre that operates freely in all currencies and which has created a climate encouraging the secure and fluid movement of funds.
No taxes on interest earned on ..... and savings deposits - no withholding taxes especially!
Unique monetary system based on the U.S. dollar, but with no restrictions on monetary transfers to and from the country, or on the conversion and circulation of the U.S. dollar.
No central bank or money issuing authority.
An economy which is virtually inflation free and which makes the cost of living far lower than any other European, North or South American cities.
Tax law anchored on the principle of territoriality - it does not consider revenues originating from transactions that take place outside Panama (offshore) even when managed from within the country, as being taxable income.
No restrictions on corporate mergers or acquisitions and a very flexible corporation law.
Accommodating maritime law coupled with an international maritime centre for ship repair and supply for vessels using the Panama Canal and the ports of Balboa and Cristobal
Colon Free Trade Zone ("FTZ") the very first and largest in the Western Hemisphere and one of the most successful in the world.
The world’s leading offshore dollar-based banking and corporate centre - commerce thrives here.
Incentives for industrial, agro-industrial and tourist development.
A beautiful people in a ravishingly beautiful country where English is spoken with enthusiasm and elan. People of poise and grace who are most welcoming.
WHAT IS THE PANAMA PRIVATE INTEREST FOUNDATION? HOW DOES IT WORK? WHAT CAN BE DONE WITH IT?
The Panama Foundation has:
* Many of the characteristics of a discretionary trust
* Is like a charitable foundation in some ways, except that it has private, non- charitable beneficiaries
* As a result, can be described as it was by one attorney thus "It’s the equivalent of a family Red Cross. If a family member asks the Foundation’s Board or Council for money, he is likely to get it. An outsider will not"
* The founder of a Panama Family Foundation acquires no founder’s rights.
* It is formed with a modest minimum ($10,000) endowment.
* The members of the foundation council do not hold title to the foundation’s funds in their own name.
* The funds must be used for the purposes set forth in the articles, but it could be that the sole purpose may be maintenance of a particular family.
* The settlement of property into the foundation is a donation and so the founder receives no legal economic or a registrable equivalent interest.
* The foundation itself may not engage in any sort of commercial business, except when commercial operations are required to attain the non-commercial objectives of the foundation.
* Settlors of the foundation can of course remain anonymous by nominating the Panama advisor as a trustee.
* Americans and Canadians using a Panama foundation or who are beneficiaries of such a one, can know that the foundation has not been classified as a trust or as an association taxable as a corporation for their respective tax purposes.
* Is similar to a Liechtenstein Anstalt; it can be adapted to be all things to tax avoiders.
* It has a separate legal personality
THIRD PARTY RECOMMENDATIONS AND ENDORSEMENTS
The famous "W.G. Bill Hill" - the very first recommendation I came across was in some of the books written for and published by Scope International of the U.K. For example in his most recent update of "The Passport Report" (and he didn’t write all of them under his name) he says this:
"Panama received a lot of bad press in 1989 and 1991 but it is still a superb place to make money. Communications by air (40 airlines), telephone, mail and telex are first rate. Local laws and customs encourage free trade. There are minimal import or export duties if the Colon Free Trade Zone is used. Most taxes in Panama are nominal. Ship registration is cheap and lacks rigor. As a result, the growing Panamanian Merchant Marine (registered cargo ships) is now second only to Liberia. Liberia’s lead is due to its much earlier entry in the tax haven ship registry game. Every bank in the world has a branch or representative office in Panama City, as do most international law firms and major public accountants."
THE POPULIST WINS IN PANAMA -
This strategic state faces important year, needs upright leadership
The day Mireya Moscoso became the first woman to be elected president of Panama, May 2, was a quiet Sunday in New York City, but in the downtown office towers of giant Citibank and Chase Manhattan the financial flagship of the Rockefeller empire), the lights burned through most of the night.
"Moscoso is a populist. Not just a populist, an Arnulflista," says Herminio Zaldivar, a Mexican broadcast correspondent with long service in the Caribbean and Central America. "The bankers hate and fear her. To get elected was the easy part. Now she faces a real fight."
"Arnulfismo" is the populist creed - the political legacy - left behind by the late President Arnulfo Arias of Panama, one of the most principled, popular - and persecuted - reformist leaders south of the border.
"Arias was elected president of Panama by a landslide three times in the late 1950s and ’60s," recounted Zaldivar. "Each time, he was driven from power by armed coups financed by Chase Manhattan and other big banks."
Panama is a small, barefoot country. But for international bankers it is the most prized enclave where they conduct many of their most profitable operations, such as large scale money laundering and "private" asset manipulation on a daily basis.
President-elect Moscoso owes her sweeping triumph to the fact that she is the widow and disciple of former President Arias, the one Panamanian politician who attempted, time and again, a clean-up of the country’s financial morass before he was ousted by the bankers.
"The voters saw her as the one true torchbearer of uncompromising populism in a field of shopworn or tainted candidates," says Zaldivar.
Now, as the incoming head of state, the former Mrs. Arias will not only oversee her government’s takeover of the Panama Canal (set for the last day of this year) but the withdrawal of all U.S. troops from the region - a major geo-political shift.
If the global elites attempt, once again, to reverse this populist electoral tide by paying off Panama’s purchasable military plotters, "The Caribbean and Central American will become another crisis cauldron, not unlike the Balkans" warns Dr. Arsenio Bustamante, an Argentine historian.
Continued in part four of ten
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