Kenneth Rijock

Kenneth Rijock

Thursday, August 29, 2013

PANAMA UNDER INTERNATIONAL PRESSURE TO ABOLISH BEARER SHARES


According to reliable local sources, the Republic of Panama is under intense international pressure to outlaw bearer shares for corporations, in any form. You may recall that recent legislation allows them to continue, albeit under certain restrictions*.

The parties named as among those pushing for reform of Panamanian corporation law are the United States, Canada, and the European Union. Bearer share fraud, where a trusted intermediary, generally a banker or financial services professional, literally steals the company, and its assets, but taking possession of the shares of stock, and exercising control over them, is widespread, and have been seen to targets Europeans and North Americans living or working in Panama.

Some of the Panamanian judges require the owner of a bearer share certificate, if he or she was not issued the stock at the time of incorporation, to produce a Bill of Sale that itemizes the assets, but inPanama's notoriously corrupt court system, justice is not often served for the complaining party.

Will we have to wait until Panama has a new president for reform ? We cannot say, but so long as Panama allows widespread bearer share fraud, by failing to change its laws, risk levels for foreign businessmen will remain elevated.
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*Panama Takes the Easy Way out on Bearer Securities

  

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