Lawyer Future

Monday, April 28, 2008

Trump Tower is protected from IP litigation

Newland International Properties Corp. (BVP: NEWL) has filed a US$200,000 bond with a Panama City circuit court to prevent damages from a possible lawsuit by the Jumeirah Group - owners of the sail-shaped Burj Al-Arab hotel in Dubai. The order also bars Jumeirah from continuing to send disparaging notes to Panama city permit authorities. This protective order is allowed by Judicial Code when there is a reasonable fear of damages from an unfounded lawsuit.

Law 15 of 1994 on Copyright does protect architectural designs. However, the law also states that the architect is the owner of the design, not the builder who is merely granted a license. Newland declared to the media that it received the plans from Upper Deck Properties. According to the original prospectus filed with the Panama Stock Exchange, Upper Deck is an affiliate of Newland. The original design was prepared by Colombian architects Arias, Serna & Saravia (an affiliate of Newland) for Upper Deck, which also has 2 members in the Newland board:

En el 2006, nosotros adquirimos el esquema arquitectónico preliminar para el proyecto del Trump Ocean Club de Upper Deck Properties, S.A. o “Upper Deck”, nuestra afiliada. Este esquema arquitectónico básico y preliminar fue originalmente preparado por Arias, Serna & Saravia, nuestra afiliada, e incluye los diseños y mercánica básicos para el proyecto y sus detalles arquitectónicos y especificaciones. (page 63) Upper Deck, una sociedad comercial incorporada de acuerdo a las leyes de Costa Rica y nuestra afiliada, contrató a Arias, Serna & Saravia, su afiliada, para el desarrollo de los planos y especificaciones del Trump Ocean Club en base a un contrato principal para diseño arquitectónico fechado al 30 de agosto de 2005. Subsecuentemente, nosotros adquirimos de Upper Deck los planos y especificaciones por el esquema básico y proyecto arquitectónico preliminar de Trump Ocean Club, en base a un contrato de compra venta de planos y especificaciones fechado al 3 de febrero de 2006.(80) Nuestra junta directiva esta integrada por 3 miembros, uno designado por Roger Khafif y dos elegidos por Upper Deck. (85)

Newland has not listed the matter as a material event in their Panama Stock Exchange NEWL listing.

More in http://mensual.prensa.com/mensual/contenido/2008/04/28/hoy/herald/1335288.html
.

Liechtenstein foundations become less atractive with secrecy breach

Modern private foundations (Stiftungs) are a
creation of Liechtenstein, a small Principality
nestled between two neutral countries of
Switzerland and Austria. Along with the
Establishement (Anstalt), Liechtenstein provides
structures which are used to hold assets in bank
accounts protected by legal confidentiality.

Early 2008 has shaken the confidence of the
confidentiality in Liechtenstein with the sale by
two bank officials of the names of bank account
holders to taxx authorities of Germany, Spain,
Portugal and - according to Der Spiegel - even
the U.S. http://www.spiegel.de/international/business/0,1518,537640,00.html

Former LGT-Liechtenstein Landesbank bank official
Heinrich Kieber
<http://www.spiegel.de/international/business//international/business/0,1518,535768,00.html>sold
a DVDs to the German Financial Intellegence
agents for close to €5 million ($7.4
million). Spanish investigators were after
Kieber for a 1996 fraudulent real estate deal in
Barcelona, which had earned Kieber 600,000 Swiss
francs ($553,000). He apparently fled to
Argentina before returning to Liechtenstein,
where he began working for LGT Bank in April
2001. More than half of the investors and about
3,100 foundations and establishments on the DVDs
are from abroad. Some are part of organized crime
in the Balkans and in Russia, including both
well-known and relatively unknown companies.

Unlike in Germany, where foundations serve a
specific not-for-profit purpose , the law in
Liechtenstein and Panama allows the founders of a
foundation to benefit themselves and their
dependents. Tax rates for foundations in
Liechtenstein are also very low and are exempt
from property, earned income and profit taxes.
Only an annual capital tax needs to be paid,
which amounts to 0.1 percent of the paid capital
or 1,000 Swiss francs (620 euro/$904), whichever
is greater. For capital valued between 2 million
Swiss francs and 10 million Swiss francs, the tax
rate is 0.075 percent. Capital valued above 10
million Swiss francs is taxed at a rate of 0.05
percent. Liechtenstein foundations are
available for US$3,000, while Panama Foundations
are available for US$950 and not taxed on income
from non-Panama activities (including interest from Panama bank accounts).

German tax authorities have no problem with
interest made in Liechtenstein as long as it is
declared in tax filings. To keep the money hidden
from German financial officials , according to
the DSTG, many people start foundations using a
name that doesn't identify the founder and
entrust the foundation's management to a trustee.
According to DSTG estimates, within
Liechtenstein's 160 sq km, there are roughly
80,000 letterbox companies , many of which share
an official address with many foundations. To
hide even more tracks from the tax investigators,
the foundation's capital can be deposited in a Swiss bank account.

Switzerland and especially Liechtenstein have
very strict bank secrecy . This is supposedly
part of Liechtenstein's "basic attitude and
tradition," as the country's Web site says.
Financial institutions in Liechtenstein strictly
reject all requests for account information even
from German tax investigators.

It remains to be seen how long secrecy
last. Just before the Kieber debacle, the
Liechtenstein government announced
<http://www.liechtenstein.li/en/eliechtenstein_main_sites/portal_fuerstentum_liechtenstein/fl-staat-staat/fl-staat-aussenpolitik/fl-staat-aussenpolitik-aktuell/fl-staat-aussenpolitik-aktuell-presse.htm?&show=15&pmid=94536>amendements
to the foundation law to be circulated for consultations.

Wednesday, April 23, 2008

Panama city taxi rates will be raised

New taxi rates will be in force once they are published in the Official Gazette. The zone
system is expanded to include neighborhoods of Clayton and those along Transisthmian and Panamerican Highway.

Panama City has around 19 thousand taxis - none of which seem to be available during a rainstorm.

Taxistas cumplen su sueño

http://mensual.prensa.com/mensual/contenido/2008/03/05/hoy/panorama/1285421.html

Saturday, April 19, 2008

Austria banks and Panama foundation enhance confidentiality

Austria - in the middle of Europe - provides a degree of banking secrecy which is granted by a Banking Law with the same rank as the Constitution. Unlike other financial centers - like Switzerland - which are more widely known as havens and therefore subject to higher scrutiny, Austria is known as a neutral country, headquarters to several United Nations offices. Bank accounts held by non-Austrians are not subject to Austrian taxes. Account owners can get the best of both worlds by opening Austrian bank accounts under the name of a Panama foundation, trust or corporation. Universal banks have also specialized investment staff to help with the purchase of foreign securities.
Austrian authorities have pledged their continuing support of secrecy, despite multilateral actions such as the OECD black lists and the EU Tax Savings Directive.

Austria: Bank´s Duty of Confidentiality by Michael Kutschera, Thomas Schirmer and Alexander Kramer Austrian law expressly recognises and protects a bank's duty of confidentiality (sometimes referred to as 'bank secrecy') with respect to information received by or relating to its customers. This duty is primarily governed by s 38(1) to (4) (scope and exceptions) and s 101 (criminal liability) of the Banking Act (BWG) and supplemented by several provisions of a procedural nature such as the Revenues Penal Code and the Criminal Procedure Code.
Section 38(5) of the BWG, a provision of constitutional law, affords special protection to the provisions of s 38(1) to (4) of the BWG by stipulating that an amendment of these provisions requires - similar to an amendment of a provision of constitutional law - a quorum of at least 50% and a majority of two-thirds of the deputies to the National Counsel (Nationalrat, the more powerful of Austria's two Houses of Parliament).1
Since 1 January 1994, the provisions on bank secrecy were partly amended, in particular with regard to money laundering, as Austrian law and banking practice initially permitted the opening of anonymous accounts in certain cases. In order to avoid the abuse of the Austrian banking system for the purpose of money laundering, Austrian banks in 1989 agreed on the wording of a uniform declaration, according to which each bank voluntarily undertook a number of duties to prevent such abuse.2 These duties were expanded by another declaration on additional duties of diligence in 1992, the compliance with which still was voluntary. .... The bank's duty of confidentiality Section 38(1) of the BWG reads: 'The credit institutions, their shareholders, organ members, employees, as well as persons otherwise becoming active for the credit institutions, are prohibited from disclosing or exploiting secrets which were entrusted to, or to which access was made available for, them on the basis of the business relationship with clients or on the basis of s 75 (3)5 hereof exclusively (Bank Secrecy). If, in the conduct of their official activities, organs of public authorities or of the Austrian National Bank, receive information which is subject to the Bank Secrecy, they shall maintain the Bank Secrecy as an official secret from which they may be released only in one of the cases set forth in s 38 (2). The duty of confidentiality applies without limit as to time.' Full text in http://www.mondaq.com/article.asp?articleid=31351

Austrian 1920 Constitution Article 10 [Federal Legislation and Execution] (1) The Federation has powers of legislation and execution in the following matters: 5. the monetary, credit, stock exchange and banking system; the weights and measures, standards, and hallmark system Article 20 [Administration] (3) All functionaries entrusted with administrative duties of Federation, States, and Counties are, except for differing regulations by law, pledged to secrecy about all facts of which they have obtained knowledge exclusively from their official activity and whose concealment is enjoined by the public interest or that of the parties concerned. Official secrecy does not exist for functionaries appointed by a popular representative body if it expressly asks for such information. Full text in http://www.servat.unibe.ch/icl/au00000_.html

Chancellor defends Austrian banking secrecy
Chancellor Alfred Gusenbauer has defended Austrian banking secrecy before the beginning of the EU summit in Brussels on the EU's Lisbon strategy for economic growth and employment. He said that such secrecy was good for Austria as a financial location and gave the country and its people an advantage. He added that Austria was ready to cooperate with other countries on the issue of tax-evasion but that it wouldn't make sense "to sacrifice" a good arrangement like banking secrecy because of that crime, which occurred in all countries. He said that he didn't know if the summit would discuss banking secrecy, which wasn't on its agenda. March 14th, 2008 http://www.austriantimes.at/index.php?c=2&id=4143

Bank secrecy is sacred in Austria
Both SPÖ Chancellor Alfred Gusenbauer and ÖVP Vice Chancellor and Finance Minister Wilhelm Molterer have said that there is no need to change the Austrian bank-secrecy system in the wake of the revelation of widespread tax-evasion in Germany through use of personal foundations in Liechtenstein. Gusenbauer and Molterer claimed that the Austrian system conformed to relevant EU regulations. Molterer added that Austrian law on foundations and taxes differed significantly from Liechtenstein law in those areas and that bank secrecy would not apply in criminal proceedings. The FPÖ and the BZÖ are also opposed to changes in the Austrian bank-secrecy system. FPÖ finance spokesman Lutz Weinzinger declared that "bank secrecy is a core value in Austria and part of the country's business culture" but hastened to add that he was "no friend" of tax-evasion. BZÖ national councillor Veit Schalle added that foreign access to information about Austrian accounts would be an unacceptable assault on Austrian sovereignty and would massively damage the country as a financial location. The Greens are the only party that supports changes. They said that they would consider a parliamentary initiative in that regard if the German scandal spilled over into Austria. Austrian banks are also opposed to any changes in the Austrian system. Austria is on the Organisation for Cooperation and Development (OECD)'s black list for its failure to implement an EU-wide requirement for registration of capital gains. The OECD, the German finance ministry and the NGO ATTAC (Association for the Taxation of Financial Transactions for the Aid of Citizens) have all called for better clarification of tax-evasion in Austria. February 21st, 2008 http://www.austriantimes.at/index.php?c=2&id=3470

Thursday, April 17, 2008

Property tax exemption for 20 years #3

Law 21 of 2008 to extend the number of projects with a 20-year property tax exemption was finally enacted and is in force. The law is described in Property tax exemption for 20 years, BUT ... (reloaded).

Law 21 still does not clarify which exemption applies to homes with building permits dated between September 1, 2006 and June 30, 2009.

Complaints against real estate agents

Everything is sweet-talk with your real estate agent during the purchase process: endless trips all over the city or the beach, superlatives used to describe everything about the property. You sign in the dotted line, click on that "Send" button for the transfer of funds. Next thing you learn that the property has several defects, you overpaid and - worse - "your" real estate agent all this time was being paid by the buyer to close the deal no matter what. You call the agent to face the music but then he acts as his name in Spanish implies: "corredor" (runner).

The Technical Board of Real Estate is an entity of the Ministry of Commerce which not only grants real estate agent licenses but also deals with complains against agents and those who sell real estate without a license. Complaints do not need to be filed by an attorney but they need to be in Spanish http://www.mici.gob.pa/bienes_tramites.php#cinco, so a translator is needed.

Accredited agents are listed online, although with some delay http://www.mici.gob.pa/bienes_doc.php

A Code of Ethics was enacted in 2001 (CODIGO DE ETICA DEL CORREDOR DE BIENES RAICES. RESOLUCION Nn 092-2001. (De 28 de Julio de 2001) http://www.unacobinpanama.com/doc/codigo_etica.pdf http://www.acobir.com/publicaciones/documents/Codigo%20de%20Etica%20de%20CBR.pdf which deals with several restrictions on agents.

The two real estate agent associations, ACOBIR and UNACOBIN, also take complaints against their members as a reason for expulsion, which will not get any money back but serves as a moral penalty.

Final note: There is no law which says that real estate agents must get paid 5% commission. The market rules.

Debunking the myth of extraditions from Panama

Another hoax seems to be making the rounds on the Internet:

"The MLAT has no application to civil cases such as divorce, bankruptcy, civil judgments, business litigation, any sort of civil litigation, civil tax matters etc. Taxation matters of any sort are not covered by this as far as Panama is concerned. Income tax evasion is a civil (non-criminal) offense in Panama. Switzerland cooperates on income tax cases if the return is filed falsely like all income was not declared, things were omitted or so the complaining government says. Panama has no extradition treaties. Panama passes this test." (How to Compare Offshore Jurisdictions 09th November 2006)

By MLAT they refer to a 1995 Mutual Legal Assistance Treaty http://travel.state.gov/law/info/judicial/judicial_690.html which allows judicial cooperation (subpoenas, extradition, seizures, or others) in cases between Panama and the US when it involves a crime punishable with imprisonment of more than 1 year in both countries. Until Panama penalized false statements in tax returns with 2 years of imprisonment, most US tax crimes were not subject to judicial cooperation.

Panama does have extradition treaties. The Panama Foreign Ministry lists several International extradition conventions http://www.miregobpa.info/tratados.asp?cod_materia=38&codigo_tratado=2&sw=3 as well as bilateral treaties signed with several countries.

One of the treaties is with the US. They call it "Treaty providing for the extradition of criminals. Signed at Panama May 25, 1904; entered into force May 8, 1905. 34 Stat. 2851; TS 445; 10 Bevans 673."

Those that were not hiding under a rock may have seen a little guy called Noriega being flown out of Panama in a helicopter almost 20 years ago. The 1904 extradition treaty served as legal support for the action, not that any Panama government was willing to argue the point with a larger, foreign army.

Tax cases may not be subject to extradition, but being a fugitive from an active tax case prosecution is still being a fugitive in both countries. Eddie Ray Kuhn, self-proclaimed tax protester and indicted as part of the Wesley Snipes tax case, found that the hard way in November 2006, when he was arrested by Panama authorities in an El Dorado shopping mall. Not even his Pensionado Visa helped him avoid a free flight back to "bucolic Ocala" in Florida. http://www.cbc.ca/arts/film/story/2006/11/02/snipes-taxes.html The legal argument for his deportation was that "false statements in his Panama pensionado application affidavit", which was a legal shortcut faster than a full extradition process under the MLAT. German George Schulze was also sent back to Germany for tax fraud.

Political momentum can have an effect, as several prosecutions of Panamanians fleeing to the US escaping Panama justice (yes, sometimes it actually exists) were being delayed by non-complaint US authorities. A report to Congress states: "The current extradition treaty between the United States and Panama was signed in 1904, and the Panamanian Constitution prohibits the extradition of Panamanian nationals. ... Despite its bar to extradition of nationals and an old treaty, Panama has continually demonstrated good faith efforts to surrender fugitives to the United States. Most of all, Panama has shown a willingness on numerous occasions to make use of legal alternatives to extradition (which are not reflected on the appended charts) in order to effect the return of non-Panamanians to the United States to face trial." http://www.state.gov/s/l/16162.htm The report also lists fugitives in Brazil and Costa Rica surrendered to the US for several crimes.

Lesson to the wise: Get professional advice and file truthful tax returns on time.

Arrestan en Panamá a religioso norteamericano buscado en EEUU por fraude http://www.radiolaprimerisima.com/noticias/5754
Detienen a pastor estadounidense por evasión de impuestos en EEUU http://www.terra.com/noticias/articulo/html/act634001.htm
Taxable Talk http://www.taxabletalk.com/posts/chain_1161120341.shtml
Extradition from Panama to the United States—Eddie Ray Kahn http://www.internationalextraditionblog.com/2006/10/extradition-from-panama-to-united_17.html
Eddie Ray Kahn From Wikipedia http://en.wikipedia.org/wiki/Eddie_Ray_Kahn
White Collar Crime Prof Blog http://lawprofessors.typepad.com/whitecollarcrime_blog/tax/index.html
Limitations of the Attorney-Client Privilege Under Section 7525 of the Internal Revenue Code http://www.legalinfo-panama.com/articulos/articulos_61a.htm
.