Tuesday , 28 January 2020
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The European Union (EU) has objected to a controversial Panamanian law, recently passed, affecting current and future investments by foreign companies, believing that it violates commitments made to Europe relating to the principle of national treatment in the provisions of services.

EU objects to new Panamanian law

The commitments were made in the ‘Partnership Agreement European Union-Central America’ as well as other clauses in some ‘Investment Protection Treaties’.  These were signed between Panama and different European Member States (Germany, Spain, France, Italy, the Netherlands and the UK) among others.

Similarly, the Panama Maritime Chamber (CMP), representing more than 95% of companies serving the maritime industry, also contends that the rules cannot be applied to trading partners where Panama has a free-trade agreement.  This would include the USA, several South American and Asian countries, as well as the EU.

One of the most controversial laws is the requirement for companies providing launch services, ship chandler and transport of bunker fuel for ships to prove that 75% of the total shares (issued and outstanding) are owned by Panamanian nationals, a move which the CMP sees benefiting domestic companies.

However, such a law would restrict the number of shares a foreign company, or person, could hold in companies providing maritime auxiliary services in Panama, contrary to the current negotiated free-trade treaties.  Such a move is seen as directly affecting the country’s foreign investment and trade policy to attract overseas investment.

Commenting on the proposed new laws and raising doubts about future investment, the Dutch Ambassador in Panama, Wiebe de Boar, said that such regulations did not apply in the Port of Rotterdam, where a number of foreign companies or capital existed in the provision of services.