The Bank was created as a result of Panama’s independence from Colombia. We were founded on October 12, 1904, with an initial staff of six employees. Since its inception, Banconal has been committed to the sustained development of the country and particularly to its productive sector.
In 1911, our bank was formally renamed Banco Nacional de Panamá and consolidated itself as the driver of Panama’s productive sector’s growth; specifically, the agricultural sector. In 1919, the Bank opened its first branch offices in Panama’s various provinces.
In 1956, the Bank was awarded the designation of “official bank” and were vested with full autonomy with respect to the management of our internal affairs, subject only to the oversight powers of the Executive Branch of the Panamanian government.
In 2019, under the leadership of Javier E. Carrizo Esquivel and a senior management team that is largely focused on customer satisfaction, we began to focus on optimizing operations, increasing employee motivation and improving the Bank’s business processes with the aim of becoming a world-class bank.
We recently celebrated the 115th anniversary of our founding, and also celebrated a historical milestone in terms of gender equality: for the first time in Panama’s history, the Board of Directors of Banconal is chaired by a woman, Lizbeth Ann Henríquez Leonard, who was appointed in 2019.
We are a full-service, state-owned bank, operating with in the Republic of Panama. We provide a wide range of financial services to consumer, commercial, corporate and institutional customers. Our primary business lines are corporate banking, commercial banking, agricultural banking, consumer banking, financial institutions and government banking.
Anti-Money Laundering Laws and Regulations
Panamanian anti-money laundering requirements are primarily regulated by (i) Executive Decree No. 136 of June 9, 1995, which created a Financial Analysis Unit (Panama UAF) for the Prevention of Money Laundering and (ii) Law No. 23 of April 27, 2015 (Law No. 23), regulated by Executive Decree No. 363 of August 13, 2015, pursuant to which banks and trust corporations, among other financial institutions, are required to perform their operations with due diligence and due care conducive to preventing such operations from being performed with funds, or over funds, generated from activities related to money laundering.
Panamanian Law No. 23-2015 and Accord No. 7-2015 provide that the following entities are deemed to be “supervised entities” for purposes of money laundering, terrorism financing or any other illicit activity(i) banks, (ii) bank groups, (iii) trust corporations, (iv) leasing companies, (v) factoring companies, (vi) credit, debit or pre-paid card processing entities, (vii) companies engaged in remittances or wire transfers, and (viii) companies that provide any other service related to trust companies. These entities must take necessary measures to prevent their operations and/or transactions from being used for money laundering operations, terrorism financing or any other illicit activity under a risk based approach methodology. Specifically, banks, trust corporations and bank groups must adopt these measures in accordance with, among others, Accord No. 10-2015, as amended.
Law No. 23 and Accord No. 10-2015, as amended, require supervised entities to perform a due diligence reviews of their customers and their transactions. It also provides minimum due diligence requirements that supervised entities must perform on their customers in order to comply with the regulation. Supervised entities have the obligation to ensure that the information provided by their customers is continuously updated, especially for customers classified as higher risk customers. Banks, trusts
and banking groups are further required to create a system of classification and assignment of risk profiles to each of their customers. The minimum requirements that must be included in all risk profile classifications include: nationality, country of birth or constitution, domicile, profession or trade, geographic zone of customer’s activities, corporate structure, type, amount and frequency of transactions, source of funds, politically exposed persons, products, services and channels that will be used by the customer. Furthermore, banks’ customers are required to disclose the identity of the owners of an entity—the disclosure of ultimate beneficiaries is limited to up to 10.0% ownership if the owner is a natural person; otherwise, further disclosure is required. This requirement does not apply to listed entities. By December 31st, 2020, foreign clients of banks must also provide the bank with the foreign tax identification number of the country where the client is a taxpayer and a sworn statement which states that flows of the deposits and disbursements held or issued by the bank will comply with all fiscal obligations in the country or countries where said foreign client has fiscal residence.
Furthermore, Law No. 23 provides that the supervised entities are required to provide transaction reports to the Panama UAF, and/or require from their customers, attorneys-in-fact or representatives, the necessary declarations for purposes of this law, particularly for the following cases:
- Deposits or withdrawals of money in cash or quasi-cash made in accounts from person or entities for an amount of U.S.$10,000 or more, or through successive transactions that, although individually are for amounts inferior to U.S.$10,000, at the end of the day or of the week total U.S.$10,000 or more.
- Exchanges of cash in low denominations for cash in high denominations or vice versa, for an amount of U.S.$10,000 or more, or through successive transactions that, although individually are for amounts inferior to U.S.$10,000, at the end of the day or of the week total U.S.$10,000 or more.
- Cashing of cashier’s checks, traveler checks or money orders, issued to the bearer, with blank endorsements and issued on the same date or nearby dates for the same issuers or issuers of the same market.
- Purchase and sale of currency different from the legal tender in Panama, equivalent to U.S.$10,000 or more, or through successive transactions that, although individually are for amounts inferior to U.S.$10,000, at the end of the day or of the week total U.S.$10,000 or more.
- Payments or collections in cash or quasi-cash for an amount of U.S.$10,000 or more, or the sum of such amounts in one week that total U.S.$10,000 or more, by a single customer or by a third party acting on behalf of a single customer.
Supervised entities are subject to sanctions for noncompliance with the anti-money laundering and antiterrorist financing requirements by the supervisory authorities in accordance with each supervisory authority’s sanctioning powers.
Non-compliance with Law 23, or those dictated by the pertinent authorities for supervision of each activity for which there is no specific sanction established, will be subject to fines ranging from U.S.$5,000 to U.S.$1,000,000.
Some of the measures that these entities adopted in order to prevent their operations and/or transactions from being used for money laundering operations include: (i) compliance with KYC policies by creating a profile for each customer, paying special attention to accounts over U.S.$10,000; (ii) supervision of employee activities; (iii) tracking the movement of every customer’s account, in order to know their regular activities to be able to identify unusual transactions; (iv) keeping a registry of every suspicious transaction and notifying, if deemed convenient, the Financial Analysis Unit (a governmental agency under the Ministry of the Presidency); (v) conduct internal audits and independent third party review with a risk-based approach; (vi) enhanced due diligence and continuous monitoring of costumers accounts of high risk costumer and of those labeled as politically exposed persons or “PEP”; (vii) general and specific training for employees at least once a year.
Accord No. 7-2015 provides a red flag catalog of transactions and behaviors to which Banks are required to pay special attention. These include employee conduct, as well as wire transfers, cash deposits and withdrawals, payments and ATM withdrawals, among others.
Accord No. 7-2016 provides that banks that are established in Panama, which are regulated and supervised by the Superintendency of Banks and render correspondent services to foreign banking entities, must know the
nature of their customers’ activities and evaluate the risks of money laundering, terrorism financing or any other illicit activities.
Accord No. 2-2017, in accordance with FATF recommendation # 16, establishes the minimum standards that financial entities should apply to national and international electronic transfers, in order to mitigate their misuse.
The FATF placed Panama on its “Grey List” in 2014 a result of an analysis by the IMF which highlighted certain deficiencies in Panama´s money laundering laws. The main deficiencies highlighted by the IMF and the FATF were gaps in the supervision of financial activities and other designated non-financial businesses and professions, as well as a lack of identification and verification of beneficial owners of corporations and trusts. As a result, in 2015, Panama issued Law 23 of April 27th, 2015 (the AML Law), which adopts measures to prevent money laundering, terrorism financing and financing of proliferation of weapons of mass destructions and establishes a regulatory framework for financial activities and non-financial entities that because of the nature of their activities are exposed to risks related to money laundering and financing of terrorism. In 2016, Panama was taken off the “Grey List” after FATF determined that Panama had made significant progress in improving its “anti-money laundering/combating the financing terrorism” regime.
In June 2019, the FATF placed Panama back on its “Grey List.” The FATF identified as the most significant strategic deficiencies the following: (i) the entry of funds related to crimes committed abroad; (ii) the fact that Panama does not criminalize tax crimes as money laundering.; (iii) the need to strengthen the control with regard to the accuracy and updating of the information on the beneficial owner and the continuous monitoring of the activity of legal persons; and (iv) the need to strengthen the Designated Non-Financial Businesses and Professions (DNFBPs)´ level of understanding of money laundering and financial terrorism risks. To comply with the FATF´s recommendations and strengthen its legal framework, Panama has enacted several laws that tackle the above-listed deficiencies: (i) Panama’s Law 70 of January 31, 2019 criminalizes tax fraud and defines it as a precedent for money laundering. The newly enacted law classifies as a criminal offense actions taken by any person that directly or indirectly engages in receiving, possessing, transferring, depositing, negotiating, or exchanging cash, securities bonds or any financial assets that such person knows the source of those assets is the product of crimes against the treasury (Tesoro Nacional). Under this law, tax fraud is considered a criminal act when the amount defrauded in a fiscal year equals or exceeds U.S.$300,000; (ii) Law 129 of March 17, 2020 creates a single registry of final beneficiaries of legal entities and an official registry of resident agents; and (iii) Law No. 124 of January 7, 2020, upgraded the Intendency of Supervision and Regulation of Non-Financial Subjects to Superintendence of Non-Financial Obligated Subjects. Overall, the FATF has recognized that Panama has recently adopted several laws and regulations with the aim of improving the prevention of money laundering and financial terrorism, as well as the transparency of Panamanian corporations, foundations and other legal arrangements, but expects more effectiveness in the enforcement of these laws and sees the lack of overall enforcement as a deficiency.