With the enactment of Law No. 81 on Protection of Personal Data, the Republic of Panama aims to establish the principles, rights, obligations and procedures that regulate the protection of personal data, also considering their interrelation with private life and other rights and fundamental freedoms of citizens, by natural or legal persons, public or private law, lucrative or not, that process personal data in the terms provided in the Law.
Storage or transfer of personal data:
The storage or transfer of personal data of a confidential, sensitive or restricted nature, outside the territory of Panama, by the company responsible for the storage of data or custody thereof, will be allowed, provided that the company and/or country of residence have standards of protection comparable to those of the Law or if the entity that transfers the data makes sure to adopt all the necessary steps so that it is protected. The following cases are excepted from the aforementioned requirements: (1) when the owner has granted its consent for the transfer; (2)when the transfer is necessary for the execution or enforcement of a contract by the interested party; (3) in cases of bank or money or stock exchange transfers; and (4) in case of information whose transmission is required by law or in compliance with international treaties ratified by Panama.
It establishes the obligation to develop procedures, protocols and processes for the management and transfer of data that includes the appropriate security methods.
Consent of the owner of personal data:
It is established that the processing of personal data can only take place as permitted in this Law, or with the consent of the owner of the data.
Definition of sensitive data:
Sensitive data refers to the private sphere of its owner or whose misuse could give rise to discrimination or entail a serious risk for him/her– for example, of racial origin, religious beliefs, union affiliation, political opinions, data related to the health, life, preference or sexual orientation, genetic data or biometric data, among others aimed at uniquely identifying a natural person.
Sensitive data can not be transferred except: (i) by explicit consent of the owner; (ii) when necessary to safeguard the owner’s life; (iii) when it is necessary for the recognition, exercise or defense of a right in a judicial proceeding; and (iv) when it has a historical, statistical or scientific purpose.
Rights of Access, Rectification, Cancellation, Opposition and Portability:
The rights of owners of personal data to exercise over those responsible for database processing are: (i) Access (to obtain the data and know the purpose and origin for which they were collected), (ii) Rectification (to access and request correction, modification or update), (iii) Cancellation (to request deletion of data), (iv) Opposition (refusal to provide or revoke its consent) and (v) Portability (right to obtain a copy of all personal data in a structure matter in certain circumstances).
The database custodians that transfer personal data stored in a database to third parties must keep a record of them, which must be available to ANTAI, if requested to do so.
Personal Data Protection Council:
The Personal Data Protection Council is created, which has the following functions: to advise ANTAI in relation to the Law, recommend public policies, evaluate cases submitted for consultations and develop internal regulations and it is composed by:
- the Minister of the Ministry of Commerce and Industries;
- the General Administrator of the Authority for the Protection of Consumers and the Defense of Competition (ACODECO);
- the General Director of ANTAI;
- the Ombudsman, or its nominee;
- a representative of the National Council of Private Enterprises (CONEP);
- a representative of the National Bar Association;
- a representative of the Panama Banking Association;
- a representative of Electoral Tribunal; and
- a representative of the Chamber of Commerce, Industry and Agriculture.
The National Government Innovation Authority will have the right to address the council as a technical advisor.
Duty to compensate for pecuniary and/or moral damages caused by the unlawful handling of personal data.
National Authority for Transparency and Access to Information (“ANTAI”):
Right to appeal against ANTAI in case of claims to any database storage operator to resolve differences in the exercise of the aforementioned rights. The competent body for the fulfillment of the obligations of this Law is ANTAI except in the case of estities regulated by special laws, in which case the claimant must first submit its claim to the competent regulatory authority. The ANTAI, through the Directorate established to consider the matter, is granted the powers to impose sanctions. The decision of the Directorate in the ANTAI established to consider these proceedings may be challenged through a reconsideration appeal. A subsequent appeal may be filed with the Director General of ANTAI.
The sanctions may be between US$1,000 and US$10,000, depending on the severity and recurrence and may be a written warning, citation before the ANTAI, fine, closure of the database registration or suspension and disqualification of the storage activity and/or treatment of personal data. There are minor infractions (for example: not sending the information required by ANTAI), serious infractions (for example: processing data without the owner’s consent) and very serious infractions (for example: the collection of personal data in a malicious way).
This law will take effect two (2) years after its promulgation.
Mr. Vidal has over 10 years of experience advising domestic and foreign clients in complex transactions related to mergers and acquisitions, project finance, finance, securities regulation, banking law, insurance law, public bids, government contracts, financial leasing, ports, among others. He has also participated and led transactions from several industries such as insurance, ports, construction, energy, real estate, banking, securities, restaurants, hotels and retail.
On the other hand, and with more than 15 years of experience, Mrs. Aizpurua Olmos mainly advises clients in domestic and cross-border financing transactions. She has been involved on matters pertaining to syndicated lending, project finance, governmental infrastructure projects (including transportation and energy), securitization and public offerings.
With more than 10 years of experience, Mr. Raven advises in all aspects of maritime dispute resolution and claims including collision, cargo, oil spill pollution, charter party disputes, and ship mortgage executions, among others. His client portfolio includes shipowners, P&I Clubs, charterers, hull and cargo underwriters, banks and other shipping interests.
These promotions come to strengthen the usual personalized and skilled services provided by Morgan & Morgan and reaffirms our position as Panama´s leading firm.
Morgan & Morgan advised Banco La Hipotecaria, S.A. in the structuring of its first covered bond program
Morgan & Morgan advised Banco La Hipotecaria, S.A. (BLH) in the structuring of its first covered bond program from which BLH may issue covered bonds pursuant to Rule 144A and Regulation S of the Securities Act of 1933 in series, from time to time, up to a maximum aggregate nominal amount of US$200,000,000. The issuer of the covered bonds is BLH and the bonds are full recourse obligations of BLH with dual recourse to a pool of residential mortgages granted to debtors in Panama assigned by BLH to a Panamanian collateral trust, with BG Trust, Inc., an affiliate of Banco General, S.A., acting as collateral trustee thereof.
The pool of mortgages assigned by BLH to the Panamanian collateral trust must comply with certain pool ratio requirements. KPMG has been engaged as asset monitor in order to periodically review the mortgages and confirm if they are complying with said requirements or not. BG Trust, Inc., as trustee of the collateral trust, is entitled to receive, through BLH as servicer of the loans, all payments of principal and interest that the debtors of the pool of mortgages are obligated to pay under the loan agreements. If BLH complies with certain conditions, it may request the collateral trustee to return to BLH the interest payments (but not the principal) received by the collateral trustee from the debtors. In case BLH defaults on its payments of interest or principal under the covered bonds, the flows generated by the pool of mortgages will be used to pay interest and/or principal to the bondholders and the pool of mortgages may be even sold by the collateral trustee and the proceeds of said sale would be used to pay interest and principal due under the covered bonds.
The net proceeds from the issue of each series of covered bonds will be applied by BLH for its general corporate purposes. Brean Capital acted as arranger and sole book-running manager of the covered bonds. The covered bonds have not been registered under the securities laws of the United States, Panama or any other jurisdiction and may not be offered or sold in the United States, Panama or other jurisdictions absent registration or an applicable exemption from such registration requirements.
Partners Ricardo Arias and Kharla Aizpurua Olmos, and associate Pablo Epifanio, participated in the transaction.
In the framework of a globalized world and social networks that are established as a measure of possible interest of economic, social and political groups, data protection regulations become more relevant. In fact, the European Union through the General Data Protection Regulation 2016/679 of the European Parliament and of the Council of April 27, 2016, establishes mandatory requirements, as of May 25, 2018, on regard to data protection, and which also apply to individuals in charge of the processing of data who are outside the European Union but who handle personal data of interested parties residing in the European Union.
In the case of Panama, our greatest protection is directly established through our Constitution, mainly in articles 42 to 44. These articles establish the regulatory framework in which the criterion that must be met is the consent of the owner of the personal data to obtain, process and store them. Additionally, it allows them to have access to that information in order to update or delete it from the respective database. The habeas data action is established in these articles to guarantee the right of access to personal information.
How does this affect companies?
For labor purposes, our Labor Code establishes the obligation for the employer to keep a record with information of the workers; this record is subject to inspection by the Ministry of Labor and Workforce Development. The worker in accordance with the constitutional protection has the right to access, update and amend that information, as appropriate.
Based on the regulatory framework and principles established in the Constitution, in case of the local practice, personal data protection has been included in special laws that regulate them depending on the specialization of the matter or business. Special laws such as the following, all of which follow in general terms the constitutional principles:
- Law 51 of July 22, 2008, as amended, which defines and regulates electronic documents and electronic signatures and the provision of data storage services for documents and certification of electronic signatures and adopts other provisions for the development of electronic commerce;
- Law 51 of September 18, 2009, as amended, that dictates rules for the storage, protection and provision of data of telecommunications services users and adopts other provisions;
- Law 24 of May 22, 2002, as amended, which regulates the information service on the credit history of consumers or clients;
- Executive Decree 52 of April 30, 2008, which adopts the single text of Decree Law 9 of February 26, 1998, as amended, and which regulates the banking regime and the Superintendency of Banks;
- Law 68 of November 20, 2003, as amended, which regulates the rights and obligations of patients, in terms of information and free and informed decision;
- Law 81 of December 31, 2009, which protects the rights of users of credit cards and other financing cards; and
- Law 33 of April 25, 2013, as amended, which creates the National Authority of Transparency and Access to Information.
Remarkably, there is no express prohibition in Panama regarding the movement of personal data outside Panama. Existing laws have a more focused approach to the administration and processing of information and its storage. In this sense, there is the General Directorate of Electronic Commerce of the Ministry of Commerce and Industries, which regulates data storage service providers, an entity that regulates the protection of data that must be followed by businesses and imposes the obligation to maintain security measures and protection of information.
I would like to conclude by mentioning that to date, there is a Personal Data Protection Bill that has been submitted to the National Assembly, being the second attempt this year to pass a national law that compiles the regulation on this matter.
Panama, July 31, 2018. For the second consecutive year, Ms. Kharla Aizpurua Olmos, Senior Associate of Morgan & Morgan, has been appointed as member of the Board of Directors of Fundacion WIP Panama. She has also been designated as member of the Board of Directors of Fundacion Dona Felicidad.
WIP Panama is an organization established with the purpose of furthering cooperation and communication among female lawyers around the country, as well as to address the main concerns on professional opportunities and development for them.
Dona Felicidad is focused on helping communities in extreme poverty through health, education and entertainment activities.
These new appointments ads to the pro bono practice of Ms. Aizpurua Olmos who regularly participates as volunteer in the Legal Open Houses organized by the firm in very low-income communities. Furthermore, she played a key role in the team responsible for drafting the bill to organize national volunteering in the Republic of Panama, and serves as counsellor to different Panamanian NGOs.
As a lawyer, Ms. Aizpurua Olmos concentrates her practice mainly advising clients in domestic and cross-border financing transactions. She has been involved on matters pertaining to syndicated lending, project finance, securitization and public offerings.
Morgan & Morgan advised Banistmo Investment Corporation with respect to the financing of the first LNG terminal in Panama
Morgan & Morgan advised Banistmo Investment Corporation, S.A. as holder of local collateral of several energy projects and the most recent being the Gas Natural Atlantico, S. de R.L. and Costa Norte LNG Terminal S. de R.L. LNG project locate in the province of Colon, Panama, which is an approximately US$600 million financing.
This is a cross-border transaction involved attorneys from United States of America and Panama. The matter is from 2016 however the firm continue to advise in issues that arise from the financing.
Senior associate Kharla Aizpurua Olmos, participated in this transaction.
Morgan & Morgan advised Banco General, S.A. and Banistmo, S.A. in the structuring of an issuance of corporate bonds for an amount of up to US$320,000,000 carried out by Alternegy, S.A.
Morgan & Morgan advised Banco General, S.A. and Banistmo, S.A. in the structuring of an issuance of corporate bonds for an amount of up to US$320,000,000 carried out by Alternegy, S.A. The bonds were issued by Alternegy, and Banco General and Banistmo acted as joint arrangers and underwriters of the bonds. The bonds were registered with the Superintendency of Capital Markets of Panama and listed on the Panama Stock Exchange.
The bonds have a maturity of 10 years, interest will be paid quarterly at a floating rate (minimum 5.5%) and payments of principal will be made every six months with a balloon payment at the maturity date. Alternegy is a subsidiary of Celsia, a Colombian group of companies engaged in power generation, and it operates two hydroelectric power plants in Panama. Repayment of the bonds are secured by collateral trusts constituted under Panama and Costa Rica law. The funds received from the issuance of the bonds will constitute a new source of financing for Alternegy and will be used to repay a bridge loan granted to one of its affiliates, and which had been obtained for the purposes of financing the acquisition and operation of two hydroelectric power plants owned by Alternegy in Panama, namely Lorena and Prudencia; a hydroelectric power plant owned by Bontex in Panama, namely Gualaca; and a wind power plant owned by Planta Eólica Guanacaste, S.A. (PEG) in Costa Rica, namely Planta Eólica de Guanacaste.
Morgan & Morgan also advised Banistmo Investment Corporation, S.A., in its capacity as i) trustee of the Panamanian collateral trust. The assets of said trust include, among others, receivables generated by the power plants operated by Alternegy and Bontex in Panama, a mortgage over the real property owned by Alternegy and Bontex in Panama, a pledge over the shares of Alternegy and Bontex held by Celsia, rights to receive payment under certain guarantee bonds; and ii) beneficiary of the Costa Rican collateral trust, the trustee of which is Banco Improsa and the assets of which include, among others, the flows generated by the Costa Rican power plant operated by PEG, real property of PEG and a movable guarantee over the shares of PEG held by Celsia.
In the transaction, Morgan & Morgan’s attorneys worked with the executives of Banco General and Banistmo’s department of investment banking in Panama and with the members of Banca de Inversión Bancolombia, S.A., Bancolombia’s investment banking company in Colombia.
Partners Ramon Varela and Ricardo Arias, senior associates Kharla Aizpurua Olmos and Roberto Vidal, and associates Ana Carolina Castillo and Cristina De Roux, participated in this transaction.
Morgan & Morgan advised HSBC Bank (Panama), S.A. in Master Assignment Agreement for an amount of up to US$35 million
Morgan & Morgan advised HSBC Bank (Panama), S.A. as assignee and administrative agent as well as local collection agent, in a Master Assignment Agreement for an amount of up to US$ 35,000,000.00 of certain credit rights of Constructora Meco, S.A., as assignor.
Constructora Meco, S.A. assigned under master and ancillary assignment documents, all its collection rights arising from certain design and construction agreements for a value of US$ 35,000,000.00 signed between Constructora Meco, S.A. and Panama´s Ministry of Public Works.
Said operations relate to road network redesign projects namely, overpass on Omar Torrijos Avenue and Andrews Pass, roads and bridges on east Panama Province and underpass in the Pan-American road, and rehabilitation of the runway on the Scarlett Martinez airport in Rio Hato, Cocle Province.
Partner Francisco Arias and senior associate Kharla Aizpurua Olmos, participated in this transaction.
Morgan & Morgan advises Banco Inbursa in the purchase and assignment of Credits Master Agreement for a value of US$415 millions
Morgan & Morgan advised Banco Inbursa, S.A., Institucion de Banca Multiple, as buyer in the master agreement for the purchase and assignment of non-recourse credits through an evolving discount purchase facility for a value of US$ 415,000,000.00 of certain specific credit rights of Consorcio Linea 2 de Metro de Panama, comprised of FCC Construccion, S.A. as seller and assignor, and Constructora Norberto Odebrecht, S.A. as assignor. In addition, Metrotrust, S.A. acted as trustee, assignee and local agent for collection of assigned credits.
Consorcio Linea 2 de Metro de Panama assigned certain credits within the framework of an Assignment Agreement and master and ancillary documents for its collection of rights arising from the agreement to provide “services of engineering design, construction of civil works, installation of auxiliary lines and stations, provision and installation of an integral railroad system including rolling material, putting into work Line 2 de Metro de Panama” subscribed by Consorcio Linea 2 de Metro de Panama and Metro de Panama, S.A.
Partner Francisco Arias, senior associate Kharla Aizpurua Olmos and associate Pablo Epifanio, participated in this transaction.
Morgan & Morgan advised the Republic of Panama, Merrill Lynch, Pierce, Fenner & Smith Inc. and Morgan Stanley & Co. LLC in a tender offer of U.S. Global Bonds
Morgan & Morgan acted as Panamanian legal counsel to Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, with respect to a tender offer by the Republic of Panama to bondholders of 3.875% Global Bonds due March 17, 2018, up to an additional US$253,988,000 aggregate principal amount of said 3.875% Global Bonds due March 17, 2018, and the issue by the Republic of Panama of up to U.S. $1,168,292,000.00 aggregate principal amount of 4.500% Global Bonds due March 15, 2047.
This cross-border transaction involved attorneys from Panama and the United States of America.
Partner Francisco Arias, senior associate Kharla Aizpurua Olmos and associate Ricardo Arias A., participated in the transaction.