Draft bill 27.

Summary.

The draft bill would require individuals, whether public officials or not, and domestic or foreign legal entities, including their legal representatives, directors or officers, to return public money, property and funds following convictions for the offenses against public administration identified in Title X of the Criminal Code (Código Penal). The obligation would arise upon a final criminal judgment and cover assets derived from those offenses regardless of their movements, location, transfers or holders. Its application would complement existing substantive and procedural rules and any applicable criminal, civil or administrative penalties.

Restitution would cover all public money, property, funds, assets and resources appropriated, diverted or improperly used. It would also reach persons holding or administering those resources when tracing establishes their origin. The bill allows voluntary return without extinguishing criminal liability. For compulsory recovery, the competent court could order attachment and seizure under the Criminal Procedure Code (Código Procesal Penal); property acquired with misappropriated public funds could be seized and finally forfeited under the Criminal Code and the Criminal Procedure Code. Recovered property could be auctioned under Executive Decree No. 64 of July 24, 2011 (Decreto Ejecutivo No. 64 de 24 de julio de 2011), with proceeds transferred to the National Treasury (Tesoro Nacional). The bill provides for joint and several liability of third parties whose knowledge, participation and responsibility are established, and court approved payment or setoff agreements where convicted persons demonstrate immediate financial inability to pay, without reducing the total obligation.

Convicted persons would be disqualified from public office and from contracting or bidding with the State. Considering the economic harm, where the principal sentence is equal to or greater than cinco (5) años de prisión, a judge could extend the disqualification up to twice that sentence. The court would send the judgment to the General Directorate of Revenue (Dirección General de Ingresos) of the Ministry of Economy and Finance (Ministerio de Economía y Finanzas), the Office of the Comptroller General (Controlaría General de la República), and the affected public entity. The DGI would record the amount as an enforceable tax debt and initiate collection under the Tax Code (Código Fiscal). The Panamanian Credit Association (Asociación Panameña de Crédito) would submit a report within 3 business days concerning defaults on agreed payments, with reference to Law 24 of May 22, 2002 (Ley 24 de 22 de mayo de 2002) and Law 195 of December 31, 2020 (Ley 195 de 31 de diciembre de 2020). The bill also provides for removal from the Proponents Registry under Law 22 of June 27, 2006 on Public Procurement (Ley 22 de 27 de junio de 2006 de Contrataciones Públicas), and from the National Suppliers Registry under Resolution No. 136 of December 18, 2008 (Resolución No.136 de 18 de diciembre de 2008), issued by the Ministry of Health (Ministerio de Salud). Persons held jointly and severally liable would owe full restitution.

The authorities named for implementation are the Public Prosecutor’s Office (Ministerio Público), the National Authority for Transparency and Access to Information (Autoridad Nacional de Transparencia y Acceso a la Información), the Panamanian Credit Association, the Superintendency of Non Financial Entities of Panama (Superintendencia de Sujetos No Financieros de Panamá), the General Directorate of Revenue, the Office of the Comptroller General (Contraloría General de la República), and the Judiciary (Órgano Judicial). The bill provides priority over conflicting special rules on restitution and disqualification, regulations by the Executive Branch (Órgano Ejecutivo), and commencement upon publication in the Official Gazette. Its provisions could concern affected public bodies, state contractors and bidders, creditors, and financial and non financial sectors.