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Torrijos to decree changes to banking,
customs, tourism and immigration laws
by Eric Jackson

In a National Assembly whose opposition rarely opposes, President Torrijos got more than the usual back talk from the deputies on the other side of the chamber, but his PRD caucus has the votes and before the legislature adjourned until March it gave the president the power to legislate by decree on the subjects of banking, customs, tourism and immigration in January and February. We know what some of the changes are likely to be, but we won't get the details, some of which are sure to be controversial, until the decrees are published.

Banking

The first decree will be about changes to the Banking Superintendency and it's the biggest mystery.

Torrijos forced out the former Banking Superintendent, Delia Cárdenas, on the eve of some bank consolidations for which special tax breaks were pushed through the legislature. Vice President Samuel Lewis Navarro was among a group of about a half-dozen men who split a capital gains tax break worth hundreds of millions of dollars in the sale of BANISTMO to HSBC, and later the latter bank complained that it had been deceived as to the value of what it bought. The Torrijos track record doesn't suggest the likelihood of anything particularly consumer-friendly in his banking reforms.

In the debate over granting decree powers, the PRD said that the intention is "to modify the decree that created the Banking Superintendency" in order to strengthen the institution's regulatory capacities. Second Vice President and Minister of the Presidency Rubén Arosemena said that the Banking Association of Panama and the Colegio de Abogados bar association will be consulted.

Panama has for years been under pressure from the United States, Europe and other Latin American countries to eliminate banking secrecy, which they with reason claim facilitates tax evasion and the laundering of proceeds from criminal activities. Only a small minority of Panamanians have bank accounts, in part due to lengthy holds on checks, minimum balance requirements, bank charges many consider excessive and other consumer-unfriendly aspects of our system, in which competition by offering better services is prohibited. Were secrecy to be eliminated, Panamanian banking would lose much of its international appeal, but other reforms could promote a substantial growth in the domestic financial services market.

However, we have little idea about what Torrijos has in mind.

Customs

This past December the Central American countries approved a customs union. Panama wasn't a part of it. Although we have bilateral free trade agreements with some of those countries, talks with others have yet to end in success. Our government points to a new joint computerized customs documentation pact with Costa Rica as an example of how Panama is moving to lower customs barriers, but a border-closing protest by Tico truckers who complained that they were prevented from taking loads into or out of the Colon Free Zone is but one indication of barriers that persist.

We do know that the framework for customs reform will be the creation of a somewhat autonomous customs authority. What else might change has various interested parties on edge.

To move industrial quantities of anything into this country one needs the services of a customs courier. The Customs Couriers Union (UNCAP) is complaining about secrecy with respect to the coming decree and expressing concerns, as the group puts it, that unqualified people will be able to compete with them and that the services they perform for importers will decline.

Tourism

In the field of Tourism as well a new authority is in the works. It's a change that Tourism Minister Rubén Blades has been talking about since shortly after he took the reins of the IPAT tourism bureau. There will also be a General Law of Tourism promulgated. Blades will announce the contemplated changes on January 10 at an IPAT board of directors meeting.

People in the various branches of the tourism industry complain that they have not been consulted. Given various statements by Blades and IPAT over the years, some developers fear that in the name of regulating tourism there will be changes in land tenure or construction permits.

Immigration

Immigration is probably the most broken of the systems that Torrijos may or may not fix with his decrees. The corruption at Migracion is and long has been of legendary proportions. It's the reason why former President Ernesto Pérez Balladares lost his US visa, and every time a foreign swindler or child molester is extradited from here it raises the question of why that person was let into Panama in the first place. Plus, the country's immigration laws are a maze touched upon by a dozen articles of Panama's Constitution, many international treaties and hundreds of laws aimed at labor, business, tax, health or other issues that include immigration components. The confusion creates opportunities for corruption.

Almost certainly the restoration of a 90-day tourist visa or something like it will be part of the package. An afterthought in a criminal law reform passed last year limited tourists, who previously could get a 90-day visa extendable to 180 days, to a 30-day visa extendable to 90 days. It has been an annoyance to those illegally living and working here on tourist visas and a hardship for certain tourism niches, particularly the "snowbirds" who like to abandon their frozen habitats to the north and spend several months per year in sunny Panama. Protests prompted government promises to review the issue.

Beyond that, however, there are many demands coming from various directions for changes in immigration laws. Our laws and practices with respect to the treatment of refugees from Colombia's warfare conflict with UN treaties to which Panama is a party. Our immigration laws discriminate against people from the non-Hispanic Caribbean, Africa, Asia and the Middle East. Antipathies toward Colombians, Chinese and Americans have expressed themselves in public demands for more restrictive immigration rules. There are barriers to the unification of families whose members include citizens and non-citizens. Present procedures to exclude criminals don't work very well. Immigration policies designed to stop the spread of communicable diseases are not well adjusted to new international health norms. Which of these matters will be taken up, and how they will be addressed, remains to be seen.