Bill 577.

Summary.

The bill establishes obligations for individuals and legal entities engaged in importing, distributing, marketing, or representing motor vehicles in the Republic of Panama. It covers new vehicle dealerships, brand representatives, authorized importers, and companies that sell used vehicles. It defines dealerships, authorized workshops, critical spare parts, and automotive warranties.

Dealerships that sell vehicles must have an authorized workshop, either their own or under contract, personnel certified by the manufacturer, and specialized diagnostic equipment. A workshop providing warranty service must have the facilities, staff, and capacity for preventive maintenance and mechanical, electrical, and electronic repairs. It must have tools compatible with the brand, separate work areas, available parts, and records that allow repairs, replaced components, and applicable warranties to be tracked. Dealerships selling more than 500 vehicles a year must ensure service coverage through regional workshops or contracts with certified authorized workshops.

Each dealership must maintain a spare parts warehouse in Panama and an inventory of critical parts, including filters, sensors, brake components, engine and transmission parts, and electronic modules. The minimum inventory is set at 3% of the brand’s vehicles sold in the country; for each critical part, 10 units or stock equivalent to 60 days of average demand is required. If a component is unavailable, the supplier must arrange its importation within 5 business days of technical confirmation. Spare parts weighing up to 25 pounds (25 lb) must be shipped by air; other means are permitted for heavier parts under the bill’s rules. The supplier must place and track the order and inform the consumer; unjustified delays are prohibited. Failure to comply with these rules constitutes a serious violation.

The inventory must be recorded in a digital system subject to oversight by the Authority for Consumer Protection and Defense of Competition (Autoridad de Protección al Consumidor y Defensa de la Competencia, ACODECO) and the Ministry of Commerce and Industries (Ministerio de Comercio e Industrias). If a repair takes more than 90 calendar days, the consumer has the right to a replacement vehicle or a refund of the amount paid. Both entities may inspect workshops, conduct technical inspections, and audit inventories. The bill sets fines of B/.10,000 to B/.50,000 for lacking an authorized workshop, B/.5,000 to B/.25,000 for failing to maintain the minimum inventory, and B/.2,000 to B/.20,000 for failing to complete a warranty repair; repeat violations may be fined up to B/.100,000. It also provides for immediate repair, suspension of sales or operations, and cancellation of the business license in the specified circumstances. Dealerships will have 12 months to bring their facilities and systems into compliance.

For formal used vehicle sales, the bill requires a prior technical inspection and a written report on the vehicle’s condition, mileage, damage, and maintenance. It prohibits certain liability waiver clauses, requires an itemized price, imposes liability for undisclosed latent defects, and requires a digital sales register. For occasional or informal sales, it requires a signed statement on the vehicle’s condition and a written contract; it establishes civil liability for false information or omissions, classifies certain conduct as a serious violation, and recognizes the right to file a claim with ACODECO. Selling more than 3 vehicles in a 12-month period requires registration as a formal dealer. The bill mentions Consumer Protection Law 31 without expressly amending its provisions. The Executive Branch must issue implementing regulations within 180 days of promulgation, and the bill takes effect 6 months after promulgation. Its provisions concern ACODECO and the Ministry of Commerce and Industries and are relevant to dealerships, distributors, workshops, dealers, and vehicle buyers in Panama.