Bill 478.

Summary.

The bill establishes a competitive market in which suppliers may assign all or part of their receivables to trusts administered by trustees authorized and supervised by the Superintendency of Banks of Panama (Superintendencia de Bancos de Panamá). It covers invoices issued to state entities and private companies that meet income, risk rating, solvency and liquidity requirements. Domestic or foreign investors could purchase the receivables at a discount. The assignment would not constitute indebtedness for either the supplier or the debtor. The irrevocable payment date could not be more than 360 days away for public entities or 180 days away for private debtors.

State entities would have to register and enroll, free of charge, with all authorized trusts within 90 calendar days of the law’s entry into force, under Art. 2. They could certify obligations for goods, works or services satisfactorily received, provided that a budget appropriation is available and the Fiscal Oversight Office (Control Fiscal) or the Office of the Comptroller General of the Republic (Contraloría General de la República) has endorsed them. The appropriation would be earmarked for payment. The text defines beneficiaries, certified debts, payment accounts, assignees, trustees, suppliers, investors and platforms; it excludes municipalities from its definition of state entities. Nonfinancial public entities would participate as users, without being settlors or beneficiaries. The trusts would be established under Law 1 of 1984, as amended, and their trustees could not also serve in the other listed participant roles.

To enroll, state entities would submit an application, internal authorization where applicable, and a resolution delegating authority if another official is to certify obligations. Suppliers, debtor companies and investors would provide the specified documents and authorizations and comply with Law 23 of 2015 and the applicable rules of the Superintendency of Banks of Panama. Private companies would authorize automatic debits and electronic payment through ACH or other means. Documents for private debts would be assigned and digitized for certification within 10 calendar days; documents for state debts would be processed for certification within 15 calendar days. In both cases, expiry of the period would give rise to a presumption of certification, unless failure to meet the requirements is proven. Public debts would require satisfactory receipt and budget backing; the supplier would provide the invoice, proof of receipt, contract or purchase order, payment request and other applicable documents.

Once certified, an assigned receivable could not be assigned again or made subject to measures affecting its availability. If requirements are unmet, the trust would release the assignment and apply the rules for returning documents and fees according to which party caused the failure. Only certified and assigned receivables would be traded on authorized platforms. The trust would pay the investor after receiving available funds from the debtor, without using funds from other transactions. The certified amount and date would be irrevocable; subsequent credits or withholdings would be applied against other debts owed to the supplier or treated as a reimbursement obligation. Payments would be made electronically in United States dollars, legal tender in the Republic of Panama.

Each entity’s Treasury or Finance departments would process certifications. The platforms would cross-check invoices to prevent duplicate assignments and provide audit access to the Ministry of Economy and Finance (Ministerio de Economía y Finanzas). The Ministry would have 5 business days to review each certification and could object to it; the entity would then have 5 business days to correct it. The Ministry of Economy and Finance would reserve appropriations for final certifications and give these debts the same priority as external public debt service. The mechanism would apply mandatorily to public procurements with 2 or more bidders; in other cases, it would depend on the entity’s participation. Budget adjustments are provided for debts not yet certified.

The bill provides for disciplinary penalties for obstructing certifications and measures in cases of fraud or duplication: a report to the Public Prosecutor’s Office (Ministerio Público), preventive suspension, blocking of transactions, an audit and possible restitution. It refers to the Criminal Code (Código Penal), Law 38 of 2000, Law 61 of 2017, Law 81 of 2019 and Law 23 of 2015. It would make the specified information on state debts public while restricting access to private debt data. The National Bank of Panama (Banco Nacional de Panamá) would automatically debit public accounts at maturity. Late payments would accrue default interest of 1% per month; nonpayment of a private debt for 3 business days would give rise to an expedited collection action and exclusion. The platforms would meet security, audit and interoperability requirements. The Executive Branch (Órgano Ejecutivo) would issue implementing regulations within 90 calendar days. State implementation would be phased in over 3 years, with entities and initial limits set for each stage; the Ministry of Economy and Finance could change the second-year limits and suspend certain certifications prospectively. The bill would enter into force upon promulgation.

Given its subject matter, the bill relates to the Office of the Comptroller General of the Republic, the National Authority for Transparency and Access to Information (Autoridad Nacional de Transparencia y Acceso a la Información), the National Assembly (Asamblea Nacional), the Central Government (Gobierno Central), the Social Security Fund (Caja de Seguro Social) and the public entities named in the implementation schedule, as well as trustees, banks, factoring companies, insurers, pension funds, suppliers, contractors and investors.