The United States Corporate Transparency Act (“CTA”) of 2021
Fanny Evans, Senior Associate, Morgan & Morgan
What is the CTA?
The CTA was enacted on January 1st, 2021 as part of the National Defense Authorization Act to prevent the use of companies to evade anti-money laundering rules or to hide other illegal activities. Under the CTA companies will be required to report information regarding its beneficial owners with a beneficial ownership registry maintained by the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
When is the effective date for the CTA and regulations?
The CTA will become effective on the date that its regulations are prescribed and issued by the Secretary of the United States Treasury, which shall be promulgated within one year after the enactment of the Act- that date being January 2022.
Who must report?
Entities required to report are called “reporting companies” under the CTA. A reporting company is broadly defined under the CTA as a corporation, limited liability company or other similar entity that is created under state law or formed under laws of a foreign jurisdiction and registered to do business in the United States. It is unclear whether a similar entity includes partnerships or trusts, and it is expected that the regulations will provide some clarity in this regard.
Who is exempt from reporting?
The CTA contains the exclusion of categories of entities from the definition of reporting company. An entity that falls into one of these categories will not be required to submit beneficial ownership information to FinCEN. To review the list of the exclusions CLICK HERE.
Who is considered a beneficial owner?
An individual who exercises substantial control over the company or who owns or control at least 25% of the company, and applicants, defined as anyone who files an application to form the company or register a foreign company in the United States. The CTA does not explain what constitutes “substantial control” and it is expected that the regulations will provide some clarity in this regard.
What information on the beneficial owner will be reported?
- Full legal name,
- Date of birth,
- Current residential or business street address, and
- A unique identification number, which can be from a non-expired US passport, non-expired US or state government ID, non-expired driver’s license, or a valid foreign passport.
Every reporting corporation must file a report within one year of the beneficial ownership information changing. Changes that trigger this report include (i) a change in substantial control of the reporting company, (ii) a change in contact details for a beneficial owner or applicant, and (iii) beneficial ownership exceeding or dropping below 25%.
Who has access to the FinCEN database?
The information collected in the FinCEN database will not be publicly available; but will be available to federal agencies engaged in national security, intelligence, or law enforcement activity, state or local law enforcement if authorized by a court.
Financial institutions may also receive this information with the consent of the reporting company.
What are the deadlines to report?
a) Any reporting company that is existing at the time regulations are effective must file the report within two years of the effective date of the regulations.
b) Any reporting company created after the effective date of the regulations must file the report while forming the corporation.
What are the sanctions?
Any person who willfully provides, or attempts to provide, false or fraudulent beneficial ownership information, including a false or fraudulent identifying photograph or document, or fails to file complete or file accurate reports or fails to provide updated reports will face penalties of up to $10,000 (accruing at $500 per day that the report is outstanding) and/or imprisonment for up to two years.
Disclosing or using beneficial ownership information without authorization is also subject to a $500 per day penalty and a penalty of up to $250,000 and/or 5 years imprisonment.
For more information, we suggest you contact a suitable attorney in the United States.
Disclaimer
The information contained herein should not be interpreted, accepted, construed, or used and is not provided as legal advice and should not be treated as a substitute for legal consultations with a professional. It is merely a summary of the Corporate Transparency Act recently issued in The United States. Please note that the legislation referred to herein may be modified.
The Ministry of Health establishes measures for entry into the national territory for people coming from South America due to New Strain of COVID-19.
The Ministry of Health (MINSA), through Executive Decree No. 260 of March 29, 2021 (hereinafter the “Decree”), and due to the new strain of P1 Sars Cov-2 (COVID-19) has informed certain measures applicable to all persons coming from, who have stayed in or transited through any country in South America, as follows:
- As of 12:01 a.m. on Wednesday, March 31, 2021, all persons coming from, staying in or transiting through any South American country must bring a negative PCR or antigen test no later than 48 hours prior to arrival.
- In addition, they must undergo, at their own cost, a PCR or Antigen Test upon entry into the country.
-
- If the result is negative, the traveler must be isolated at home for 5 days or in a Covid-19 travelers’ hospital. On the fifth day, the antigen swab test must be repeated, and if the result is negative, the isolation ends.
- If the result is positive, PCR-RT test and typing test +ICGES analysis should be performed. In addition, the traveler must comply with a 14-day quarantine in a Covid-19 travelers’ hospital.
- This Decree will become effective on March 29, 2021.
Comments:
- This Decree applies to nationals, residents and tourists who come from, have stayed, or transited through any South American country, regardless of the result of the PCR or antigen test.
- The current Executive Decree No. 61 of January 8, 2021 establishes the requirement to file a negative result to enter the country or to take a PCR or antigen test at the Tocumen Airport. With this Decree, even when bringing a negative test, any person with characteristics the already indicated is obliged to take a second test at the Airport, in order to enter our country.
- Likewise, the Decree establishes mandatory isolation for all persons coming from, having stayed in or transited through any South American country, regardless of the result of the PCR or antigen test.
- The use of masks and compliance with all biosecurity measures established by MINSA is mandatory for all persons entering the country, whether by air, land or sea, using commercial or private means.
- The Civil Aviation Authority, the National Immigration Office, the Panama Maritime Authority and the Public Force can adopt any measures that they consider necessary to comply with these measures.
- Failure to comply with the provisions of this Decree will be sanctioned in accordance with Executive Decree No. 961 of August 18, 2020, as amended by Executive Decree No. 61 of January 8, 2021.
- Published in 2020, Data Protection_covid, Labor and immigration_covid
Morgan & Morgan Pro Bono program repeats international recognition
Panama, March 3, 2021. For the eight year in a row, Morgan & Morgan has received the “Leading Lights” recognition in Latin America for the firm´s Pro Bono program. In Panama, only Morgan & Morgan achieved this status, sharing honors with other high-caliber firms across the region.
This distinction is granted annually by Latin Lawyer, who, together with the Cyrus R. Vance Center for International Justice, investigates the institutionalization of the practice within the firms and the participation of their lawyers.
In 2020, the firm reaffirms its commitment to offer legal advice to more than 20 non-for-profit organizations (NGOs) who received legal guidance and training on issues related to corporate, labor, tax, intellectual property, among other areas of law, and some public interest projects.
We are very proud of the 46 lawyers of the firm who participated in this program during 2020, contributing more than 1,200 hours of their time and experience to these NGOs, and other research and social projects.
COVID-19 vaccination registration for foreigners
As of February 12, 2021, the National Authority for Government Innovation enabled the COVID-19 vaccination registration for all foreigners who are living in Panama.
To complete the registration, you must follow these steps.
Step 1. Enter the following link.
https://vacunas.panamasolidario.gob.pa/vacunas_menu/
Step 2. You must select one of the following options.
a. For permanent resident, temporary resident, or resident in process.
Foreigners who already have a registration stamp of the National Migration Service stamped in their passport.
The affiliation number is unique for each foreigner and it doesn´t change. It can be found in:
b. For foreigners without an affiliation stamp.
Foreigners who don´t have a registration stamp of the National Migration Service stamped in their passport, must select this option.
Step 3. Complete the form with the requested information.
- Published in 2020, Data Protection_covid, Labor and immigration_covid
Immigration and labor immigration regime for companies with EMMA license
Executive Decree No. 33 of February 4th, 2021 (hereinafter, the “Decree”), published in the electronic Official Gazette on February 5th, 2021, regulates Law 159 of August 31, 2020 (hereinafter, the “Law”), which created the Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing (EMMA).
In relation to the immigration and labor immigration regime, the Law and the Decree establish the following:
I. EMMA Immigration Regime:
1. EMMA Temporary Personnel Visa:
- This visa may be requested for foreign workers who provide operational or training services to the company. The visa will be granted for a term of up to two (2) extendable years and will also apply to the worker’s dependents.
- Once the resolution approving the temporary visa is issued, the Ministry of Labor and Labor Development (MITRADEL) will grant the corresponding work permit, without requesting any other additional procedure.
2. EMMA Permanent Personnel Visa:
- This visa may be requested for foreign workers who work as permanent personnel.
- The visa will be granted for a maximum term of five (5) years, extendable for the same term and will apply to the dependents of the foreign worker.
3. Permanent Residence:
- The foreign worker who has worked for one or more companies with an EMMA license, may opt for a permanent residence permit, once the term of five (5) years from the approval of the temporary or permanent personnel visas has elapsed.
- When opting for permanent residence, the foreign worker may find himself working for any company with an EMMA license, or have definitively terminated his employment relationship with it.
Comments:
- The Decree establishes the requirements for EMMA’s temporary and permanent personnel visas, as well as for the permanent residence processes.
- It is provided that applications for temporary and permanent personnel visas may be submitted before the applicants’ arrival to the country. Once they enter the national territory, they will have a term of forty-five calendar days to carry out the corresponding registration and give continuity to the process.
- The possibility that both temporary and permanent personnel may request Permanent Residence after five (5) years from the approval of the respective visas is established.
II. Work Permits for Dependents of EMMA and SEM:
- Dependents under the temporary or permanent personnel visas of EMMA, as well as under the permanent personnel visas of the Multinational Companies Headquarters (SEM) regime, may request work permits before MITRADEL, through the Single Window of the National Investment Directorate of the Ministry of Commerce and Industries (MICI), once the corresponding dependent visa has been approved.
- Dependents will be able to apply for work permits within some of the categories already existing in the country and subject to the payment of income taxes, contributions to Social Security and Educational Tax.
- For the applications of these work permits and their extensions, the requirements established in the current regulations regarding work permits must be provided.
Comments:
- It is established that the dependents of EMMA and SEM will be able to apply to the categories of work permits already existing in the labor immigration legislation, once their visas have been approved. Previously, they could not apply for work permits with the immigration status of dependents.
- MITRADEL and the National Migration Service (SNM) will exchange the information that had been provided for the processing of the respective dependent visa, by the EMMA and SEM companies.
- The institutions involved in these processes will be governed by the principle of administrative efficiency and transparency, in order to quickly and efficiently process work permit applications.
The National Immigration Authority extends the validity of documents, due to the COVID-19 pandemic
Resolution number 636 of January 27th, 2021 issued by the National Immigration Authority (“SNM”), and published in the Official Gazette on February 1st, 2021 establishes an additional extension of documents, due to the crisis of the COVID-19 pandemic, namely:
• An extension until June 30th, 2021 in the validity of any identification document issued by the SNM (Provisional Residence Cards, Non-resident Visas, Judicial Stay Cards, Immigration Regularization Cards and Tourists Stay), expired as of March 13th, 2020, without incurring fines or surcharges.
• An extension until June 30th, 2021, to the period in which Permanent Residents who are outside the national territory, can remain abroad, without this situation leading to the cancellation of the Permanent Residence.
• An extension until June 30th, 2021 to previously issued birth and marriage certificates that have expired from March 30th, 2020 to January 31st, 2021.
Comments:
• The extension established in this Resolution will allow an additional validity previously extended until January 31st, 2021, now up to June 30th, 2021.
• The Resolution includes the extension of the period in which permanent residents can be away without incurring a penalty. In this sense, article 31 of Decree Law 8 of 2008 establishes as a cause for canceling permanent residence, that the foreigner remains outside the country for more than two (2) years.
• The marriage and birth certificates will now be valid until June 30th, 2021, only if they expired between March 30th, 2020 and January 31st, 2021.
- Published in 2020, Data Protection_covid, Labor and immigration_covid
Morgan & Morgan Partners recommended by the Latin American Corporate Counsel Association (LACCA)
Panama, January 21, 2021. Partners Carlos Ernesto González Ramírez (Antitrust & Competition), and Inocencio Galindo (Banking & Finance) have been included at LACCA Approved 2021, a selection of Latin American leading lawyers in specific areas of law.
Approved lawyers have been personally recommended by members of LACCA, who are all general counsel from the top multinationals and private companies across the region.
More information on http://laccanet.com/approved/.
- Published in 2020, Carlos Ernesto Gonzalez, Inocencio Galindo, News
Morgan & Morgan promotes Kay-Linda Richardson to role of Senior Officer Manager of MMG Trust (BVI) Corp.
British Virgin Islands, January 14, 2020. Morgan & Morgan is pleased to announce the promotion of Ms. Kay-Linda Richardson to the role of Senior Officer, with the designation of Manager of MMG Trust (BVI) Corp.
The approval was granted by the British Virgin Islands Financial Services Commission, pursuant to section 19(2) of the Banks and Trust Companies Act, 1990, section 15 and Schedule 1A of the Regulatory Code, 2009 and the Guidelines for the Approved Persons Regime.
In her new role, Ms. Richardson will also assume additional team leadership responsibilities while maintaining focus on the Company´s complementary range of services and supervising the processes to comply with new international regulations for greater transparency.
With almost 30 years’ background in the fiduciary and corporate services industry, Ms. Richardson has concentrated her practice in administrative and corporate management, as well as establishing and implementing procedures and controls based on the BVI Financial Services Commission requirements. Ms. Richardson has an International Diploma in Management from the Chartered Management Institute, the level 4 Certificate in International Finance and Administration with ICSA, The Corporate Governance Institute and has attended several workshops and seminars related to corporate formation and management, trusts, compliance, and regulatory matters, among others.
About MMG Trust (BVI) Corp.
MMG Trust (BVI) Corp. was established in the British Virgin Islands in 1988 and specializes in providing service in fiduciary and corporate services for private and institutional clients, corporations, and charitable entities. The company is regulated by the BVI Financial Services Commission and holds a Class I Trust License under the Bank and Trust Companies Act, 1990.
- Published in 2020, Estate Planning, News
The Ministry of Health establishes sanitary measures for the entry of passengers
Decreto Ejecutivo N ° 61 enero 8 º , 2021 (en adelante “el Decreto”), publicado en el Boletín Oficial el mismo día, establece medidas sanitarias para los pasajeros al entrar en Panamá durante el estado de emergencia nacional.
Medidas relevantes :
- Requisitos de entrada: Todos los pasajeros deben cumplir con los siguientes requisitos para ingresar a Panamá:
- Envíe a la aerolínea un Certificado de Prueba Negativa de PCR o Antígenos con un máximo de 48 horas antes de abordar el vuelo en el país de origen.
- Las autoridades panameñas tendrán derecho a realizar pruebas de PCR o antígenos aleatorias a todos los viajeros en los puntos de entrada, las cuales serán cubiertas por el estado panameño.
- Excepciones: Estos requisitos no serán aplicables a: (i) tripulación técnica; (ii) tripulación auxiliar; (iii) mecánicos de barcos o embarcaciones; y (iv) personal humanitario.
- Será responsabilidad de los Directores Reg i onales de Salud sancionar conmulta de quinientos un dólares (US $ 501.00) hasta cinco mil dólares (US $ 5,000.00) las siguientes infracciones:
- Incurrir en reincidencia en los comportamientos descritos anteriormente.
- Violación de vallas sanitarias o puestos de control.
- Circulación de personas determinadas como sospechosas de COVID-19 que están sujetas a cuarentena y se encuentran en supermercados, estaciones de transporte o lugares y áreas de concurrencia masiva.
- Circulación de personas diagnosticadas como positivas de COVID-19 que transitan fuera del lugar de aislamiento ordenado.
- El incumplimiento de las medidas sanitarias establecidas para los nacionales, residentes o extranjeros que ingresen a la República de Panamá, mientras se encuentre vigente el Estado de Emergencia Nacional.
Comentarios:
- Se establece que toda persona que ingrese al Territorio Nacional deberá presentar Certificado Negativo de PCR o Antígenos con un máximo de 48 horas antes de abordar el vuelo en el país de origen.
- Las autoridades competentes podrán realizar pruebas aleatorias a todos los viajeros en los puntos de ingreso, las cuales correrán a cargo del estado panameño.
- Se establecieron los montos de las multas para las personas que no cumplan con ciertas medidas establecidas en este Decreto
- Se incluye como Anexo al Decreto un Flujo de Procesos para la Vigilancia Epidemiológica de Viajeros.
- The Decree abrogates Executive Decree No. 1089 of September 23rd, 2020 and modifies Article 2 of Executive Decree No. 961 of August 18th, 2020.
- The Decree will enter as of January 8th, 2021.
- Published in 2020, Data Protection_covid, Labor and immigration_covid