Week in Review February 7, 2017


Sacyr and its partners Impregilo, Jan de Nul and Constructora Urbana S.A. (CUSA) which are part of Grupo Unidos por el Canal (GUPC) called for precautionary measures before the Miami arbitration court in response to pressure from the Panama Canal Authority (ACP) after GUPC recently claimed $300 million in advances for finished work. The news was released by the newspaper “Expansión”, a Spanish newspaper that has specialized in economic issues since 1986.


With the expiration of the deadline set by a World Trade Organization (WTO) as arbitrator, for Colombia to comply with the ruling of this body in favor of Panama, which urged Colombia to withdraw the tariff on imports of textiles and footwear from the Colon Free Zone, traders of the commercial emporium indicate that the neighboring country already gave its negative answer with its last decree.


The year 2016 became the fourth consecutive year that the Colon Free Zone (ZLC) closed with negative results, according to the Comptroller’s Office. As a result, the activity of the main free zone of the country was down 36% in the last four years. From January to November 2012, total trade in the free zone reached $28,617 million, and in the same period of 2016, the amount fell to $18,318 million. That is, trade dropped by $10,299 million in those four years.


In 2016 State and mixed companies contributed $1,171.2 million to State coffers, according to a report from the General Revenue Department, an entity attached to the Ministry of Economy and Finance (MEF). The document reveals that the figure is higher by $36.2 million or 36.2% compared to the contributions recorded in 2015, which amounted to $1,134.9 million. But while it is true that there were companies that increased their contributions to the State coffers, there were others that reduced theirs, or did not contribute, such as the State Savings Bank (Caja de Ahorros) and Panama Ports Company.


At the Board meeting of the Panama Canal Authority on September 19, 2016, the issue of the Corozal port and Panama Ports Company (PPC) was discussed. The ACP argued that it did not grant PPC the Corozal area because the ACP had made a determination on what use would be given to the area, thus disqualifying the request. When the ACP responded to PPC that it could not grant it the land, it expressed the following in a missive on December 5, 2014: Within the area it requests, adjacent to its concession, are essential operating facilities for the operation of the Canal, for which it can not be used by third parties to the detriment of the operations of the Canal, and has not proposed or contemplated the transfer of those operations to another site.


The creation of the port of Corozal is the object of one of the most epic commercial struggles of modern national times. Panama Ports Company (Hutchinson) one of the largest port operators in Latin America, on the Panamanian Pacific, is not willing to lose its main customer, Maersk, the Danish cargo carrier and the main user of the inter-oceanic route, which could look favorably at the new port that the Panama Canal Authority (ACP) is pushing with frenzy supported by the maritime community.


According to official statistics, the transit of ships through the Panama Canal decreased by 6.5% up until November 2016, compared to the same period of the previous year. From January to November 2016, 11,849 ships transited through the Panama Canal, less than the 12,667 vessels of the same period of 2015, or equivalent to a decrease of 818 vessels.


Federal prosecutors in Switzerland have formally accused the two sons of former President Ricardo Martinelli Berrocal – Luis Enrique and Ricardo Alberto Martinelli Linares – with bribery of foreign officials and money laundering, which is why Switzerland has seized $22 million in bank accounts.


The Panamanian banking system was used by companies linked to the Odebrecht construction group to transfer about $59 million with accounts in Swiss banks. The Swiss authorities asked the Panamanian Attorney General’s Office to investigate these accounts in Panama. As part of the findings in Switzerland, the Federal Prosecutor’s Office has identified bank accounts in the name of Constructora Internacional del Sur in two Panamanian banks.


The more than $9 billion in contracts awarded between 2006 and 2016 in Panama by Norberto Odebrecht also reached partners and subcontractors, who are now suspected of involvement in the bribery structure confessed by the company in advanced investigations in Brazil, USA and Switzerland. Only on line 1 of the Panama Metro, which was tendered in 2010 for a total of $1,452 million, Odebrecht had 55% participated with the Spanish company Fomento de Construcciones y Contratas, SA (45%) with trains of the French company Alstom.


The Attorney General announced charges of money laundering against 17 people related to investigations of bribes made by Odebrecht because of the investigations carried out by the entity and the information obtained in judicial assistance with Switzerland and Brazil. Among those cited are three former officials, eight Panamanian businessmen, five foreign businessmen and one private banking officer.


Former manager of the liquidated Financial Pacific stock broking company (FP) West Valdés, spent his first night in the penitentiary El Renacer. Before arriving at this prison, Valdés was transferred to the Thirteenth Criminal Court to be notified of the preliminaries.


The perception of corruption in Panama has not changed significantly in the past four years. The recent survey placed the country in position 87 of 176 countries. That is, that it obtained 38 points that places the isthmus in the red color, or in the level of countries with greater corruption, a repetitive status in recent years. For example, in 2015 it was in seat 39, in 2014. 37 and in 2013 it scored 35 points.


Up until January 2017, the Ministry of Commerce and Industries (MICI) has registered some 134 multinational companies (SEM) offices in the country with an estimated investment of $820 million and creating about 5,500 jobs. This was reported by the MICI in a statement in which the deputy minister, Néstor González, pointed out that foreign direct investment in Panama grew by 17% in the third quarter of 2016 and broke records with the approval of 25 new licenses for the establishment of multinational headquarters.

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