{"id":136822,"date":"2026-04-08T11:54:14","date_gmt":"2026-04-08T11:54:14","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=136822"},"modified":"2026-04-09T09:37:02","modified_gmt":"2026-04-09T09:37:02","slug":"panama-asset-tracing-and-recovery","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/panama-asset-tracing-and-recovery\/","title":{"rendered":"Panama: Asset Tracing &amp; Recovery"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-136822","comparative_guide","type-comparative_guide","status-publish","hentry","guides-asset-tracing-and-recovery","jurisdictions-panama"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">JMC v Asociados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/JMC-logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">JMC v Asociados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/JMC-logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Asset Tracing &amp; Recovery laws and regulations applicable in Panama<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the legal framework governing civil asset recovery in your jurisdiction, including key statutes, regulations, and international conventions that have been incorporated into domestic law?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, civil asset recovery is not built around a standalone, general \u201ccivil forfeiture\u201d statute. Instead, it is primarily structured through ordinary private-law and civil-procedure mechanisms. The Civil Code (for ownership claims, restitution, nullity and rescission, unjust enrichment, tort liability and damages), the new Civil Procedure Code adopted by Law 402 of 2023 and in force since 11 October 2025 (for interim relief, seizure-type measures, registration of claims, evidence and enforcement), and sector-specific statutes governing the legal architecture through which assets are frequently held, especially trusts and private-interest foundations.<\/p>\n<p>That framework is supplemented by transparency and traceability legislation that is highly relevant in practice to civil recovery work, including the \u201cAML framework\u201d under Law 23 of 2015, the obligation to maintain accounting records for certain legal entities under Law 52 of 2016, and the private beneficial-owner registry created by Law 129 of 2020. On the international side, the most relevant incorporated instruments include the Code of Private International Law (Bustamante Code), approved by Law 15 of 1928, and treaty-based cooperation architecture reflected in instruments such as the UN Convention against Corruption, approved by Law 15 of 2005, and the Palermo Convention against Transnational Organized Crime, approved in Panama by Law 23 of 2004.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What types of assets may be subject to civil recovery proceedings (e.g., real property, bank accounts, securities, cryptocurrencies, intellectual property, business interests or other categories of property)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a matter of Panamanian civil law, both personal and real property may be recovered, and the Civil Code expressly allows revendication not only of real property and chattels, but also of other rights. On the procedural side, interim measures may reach not just tangible assets, but also rights, credits, shares, partnership or participation interests, and negotiable instruments or similar titles. That means civil recovery in Panama can extend well beyond land and bank-facing assets to include receivables, securities, business interests, and other economic rights.<\/p>\n<p>Where assets are held through fiduciary or foundation structures, the analysis becomes more nuanced. Trust assets may consist of property \u201cof any nature,\u201d present or future, but they are statutorily segregated from the trustee\u2019s own estate; private-interest foundation assets are likewise protected as a separate assets. In both cases, however, Panamanian law preserves anti-fraud gateways, particularly where property has been transferred into the structure in fraud of creditors or to the prejudice of third parties. The core statutes reviewed do not yet establish crypto-specific or IP-specific civil recovery rules, so those assets would normally have to be pursued, if at all, through the ordinary categories of movable or intangible patrimonial rights, with proof and traceability being the main practical constraints.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the primary civil law causes of action and mechanisms available for asset recovery? Please briefly distinguish these from any criminal confiscation or forfeiture regimes.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The principal civil causes of action are conventional civil-law remedies. They include revendication by the owner of a specific asset out of possession; contractual claims leading to restitution, nullity or rescission; restitutionary claims such as undue payment and unjust enrichment; and tort claims for damages, including loss and loss of profit where legally established. These substantive claims are reinforced procedurally by robust interim relief under the Civil Procedure Code, including precautionary measures before or during the case, sequestration-type measures over credits and shareholdings, and provisional registration of the claim in the Public Registry (Official registry for corporate records and real estate), including against the corporate file where the defendant is a company.<\/p>\n<p>These mechanisms must be distinguished from Panama\u2019s criminal confiscation framework. Under the Penal Code, criminal seizure against assets is a criminal consequence directed at assets, values or instruments used in, or derived from, the offence, without prejudice to innocent third parties. The Criminal Procedure Code also allows a restorative civil action within the criminal process for return of the thing and compensation, and it expressly states that extinction of the criminal action does not prevent confiscation or civil liability. In short, Panama\u2019s mainstream asset recovery architecture is still anchored in ordinary civil actions plus criminal forfeiture, rather than a broad autonomous civil-forfeiture statute.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who has standing to initiate civil asset recovery proceedings (e.g. private parties, corporations, trustees, insolvency practitioners, receivers, or state agencies)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, standing generally follows the substantive right being asserted. That means the primary claimant will usually be the owner, co-owner, creditor, contracting party, tort victim, heir or other person with a legally cognizable patrimonial interest in the asset or claim. The Civil Code expressly gives the reivindicatory action to the owner, and the new Civil Procedure Code confirms broad access to the civil courts for those seeking judicial protection of substantive rights. Declared heirs may also exercise all real and personal actions that belonged to the deceased.<\/p>\n<p>Corporations, foundations, and other legal persons act through their legal representatives. In the trust context, the fiduciary is ordinarily central because Panamanian trust law is based on a transfer of assets to the fiduciary for the agreed purpose or beneficiaries. State entities may also sue in the civil courts where they claim a patrimonial right. Separately, victims may pursue restorative civil relief in the criminal process, or in appropriate circumstances before the civil courts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the legal status of foreign states or governmental entities bringing civil asset recovery actions? Are any limitations imposed by sovereign immunity, forum non conveniens, or other doctrines?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a matter of Panamanian positive law, there isnt a special statutory disability preventing a foreign state or governmental entity from appearing as civil claimant, provided ordinary jurisdictional connecting factors exist and the claim is properly brought through authorised representation. In practical terms, such a claimant would have to satisfy the same rules on jurisdiction, evidence, service and procedural regularity that apply to any other plaintiff. To that extent, the better view is that Panama treats a foreign sovereign plaintiff primarily as a litigant asserting patrimonial rights, not as an entity barred from access to the forum. This is, however, an inference drawn from the general jurisdictional structure and the absence of specific regulations of any kind of restriction aimed at foreign sovereign claimants.<\/p>\n<p>Panama does not appear to apply a broad general forum non conveniens doctrine in ordinary civil procedure. On the contrary, the current Civil Procedure Code states that proceedings filed in Panama as a consequence of a foreign forum non conveniens decision are to be rejected ex officio on constitutional-order grounds. Sovereign immunity, for its part, is more likely to be relevant when a foreign state is sued than when it voluntarily comes before the court as claimant.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are corporate vehicles, trusts, foundations, nominees and other intermediaries treated in civil recovery proceedings when pursuing assets held through layered structures? Are veil-piercing or analogous doctrines available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panamanian law recognises legal and patrimonial separateness, but it does not make those structures untouchable. Trust assets form a patrimony separate from the trustee\u2019s personal estate and are generally shielded from attachment except for obligations incurred, or damage caused, in the execution of the trust, and where assets were transferred into the trust with fraud and to the prejudice of third parties. Private-interest foundations receive similar statutory protection, but foundation law also preserves the right of the founder\u2019s creditors or third parties to challenge contributions or transfers made in fraud of creditors. In addition, Panama\u2019s beneficial-owner registry and accounting-record obligations materially improve the documentary basis for tracing through layered structures.<\/p>\n<p>As to corporate vehicles more broadly, Panama does not rely on a sweeping codified veil-piercing regime. The more accurate description is that abusive structures are addressed through a mix of targeted remedies such as tracing through registry entries and accounting records; revendication and restitution claims; nullity, rescission and fraud-based attacks on transfers; preservation measures over shares and credits; and provisional registration of claims against the relevant corporate file. Panamanian jurisprudence has indeed referred to lifting the corporate veil, but as an exceptional and provisional measure, particularly in connection with patrimonial precautionary relief. So, yes, analogous doctrines exist, but they are best understood as exceptional tools operating alongside conventional civil-law remedies rather than as an expansive free-standing doctrine.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the jurisdictional requirements for bringing civil asset recovery proceedings in the courts of your jurisdiction? How are conflicts of jurisdiction resolved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the current Civil Procedure Code, Panamanian courts have international jurisdiction over civil proceedings brought in Panama when there are connecting factors linking the dispute to the Panamanian judge, and also for recognition or enforcement matters governed by treaties or the Code of Private International Law. Once international jurisdiction is established, internal competence is allocated by the classic domestic factors of territory, subject matter, amount and functional stage within the civil system. Circuit-level civil courts are central in first-instance patrimonial litigation, and special rules apply in some cases where the Nation or municipalities are parties. Precautionary measures may be requested before or during the proceedings to secure the practical effectiveness of the future judgment.<\/p>\n<p>Conflicts of jurisdiction or competence are then handled through the ordinary procedural mechanisms of challenge and hierarchical judicial review. For cross-border purposes, it is also important that Panama\u2019s current procedural policy is not hospitable to forum shopping based solely on a foreign forum non conveniens dismissal, because the Code directs courts to reject such refiled cases ex officio. In practice, the most important jurisdictional questions in asset recovery tend to be nexus to Panama, location of assets, domicile of defendants, registry location, and whether urgent interim relief is needed locally even if merits litigation also exists abroad.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction recognize and enforce foreign civil judgments and orders relating to asset recovery? What are the procedural requirements and grounds for refusal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, Panama recognizes and enforces foreign civil judgments through an exequatur procedure. The Fourth Chamber of the Supreme Court is the body that examines foreign judgments and arbitral awards to determine whether they are enforceable in Panama. Once exequatur is granted, enforcement proceeds before the competent domestic court.<\/p>\n<p>The Civil Procedure Code sets out that the main requirements are: the foreign judgment must generally concern a personal action; it must not have been rendered in default without personal service, unless the defaulting party itself seeks enforcement; the obligation must be lawful in Panama; and an authentic copy must be produced. Cooperation and enforcement may also be denied where the request would contravene Panamanian law or public order. For asset recovery, the practical distinction is important: final foreign judgments are the clearest candidates for exequatur, whereas foreign procedural or evidentiary orders are more commonly channelled through letters rogatory or judicial cooperation mechanisms rather than straightforward direct enforcement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What mechanisms exist for international cooperation in civil cross-border asset recovery? How can parties obtain evidence or assistance from foreign jursidictions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama\u2019s current Civil Procedure Code expressly provides a judicial-cooperation framework based on solidarity, courtesy and controlled reciprocity. It allows Panamanian judges to process letters rogatory from foreign courts and arbitral tribunals for evidence-taking and service, provided the request is not prohibited by Panamanian law or contrary to public order. The Code also allows certain foreign notifications by mail or courier when not inconsistent with applicable treaties, accepts foreign evidence, and permits foreign law to be proven by official documents, case law, doctrine and even official websites. These tools are directly relevant to cross-border tracing, service, freezing strategy and merits proof in civil asset recovery cases.<\/p>\n<p>At the treaty level, the relevant framework includes the Bustamante Code, the UN Convention against Corruption, the Palermo Convention, the Inter-American Convention on Mutual Assistance in Criminal Matters, and multiple bilateral mutual legal assistance treaties. Panama\u2019s Attorney General\u2019s Office has publicly identified itself as the central authority for requests under several of the major UN conventions, and the Public Ministry also publishes a list of bilateral cooperation agreements. In practice, that means civil asset recovery can be supported through exequatur, letters rogatory, treaty-based cooperation and, where the facts also suggest criminal conduct, parallel recourse to criminal cooperation channels that are often more developed institutionally.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What interim measures are available to preserve assets pending resolution (e.g. freezing injunctions, Mareva injunctions, asset preservation orders, saisie conservatoire, attachments)? Please briefly summarise the requirements for obtaining such relief.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are multiple options to preserve assets; in the civil jurisdiction, seizure of assets is common and historically granted ex-parte via bonds that amount between twenty to forty percent of the value of the asset that is pretended. The bonds may be in cash, properties or certificates from insurers, making it friendly to access such injunctions in the event of short liquidity. There are also suspensive, preservation or conservative orders, that seek to maintain the status quo of a particular situation, while the process concludes, for example; maintaining a board of directors, preventing a liquidation, stop the distribution of dividends, blocking the transfer of property and so on.<\/p>\n<p>In corporate conflicts, there are special injunctions to block the effects of corporate decisions, these are free of costs, but they often need to be requested by a legitimate claimant between thirty days of the corporate decision. Additionally, a party may request to seize the administration of an entity, resulting in the appointment of a judicial administrator. The criminal jurisdiction offer more aggressive preemptive measures, but these need to be led by the prosecutors and as of march 2026 they have little judicial oversight, as long as prosecutors follow procedure and have probable cause, these orders should be sustained. Private criminal plaintiffs may request their own precautionary measures but these are not ex-parte, and they are granted by a judge.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What disclosure, tracing, and investigative tools are available in civil proceedings to assist claimants in identifying, tracing, and recovering assets (including any pre-action or in-proceedings mechanisms)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For pre action mechanisms, there are exhibitory inspections, with multiple variations, where a party may request from a judge to order the disclosure of documents or information in the possession of third or counter party. For in proceeding actions, typically judges grant parties that requests and motivate the need for any type of information regarding assets, this results in orders for private and public institutions to provide the requested information. For example, banks comply swiftly with court orders requesting bank statements, account information, etc. The Public Registry where most corporate records and all formal property titles are registered is also a swift collaborator with the courts, typically prioritizing court orders over any other private acts over the properties or entities. This institution shares updates in real time and provides official information to the public, where properties and corporate activity can be traced.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What proprietary or analogous remedies (e.g., in rem claims, restitutionary claims, vindicatory actions) are available for recovering misappropriated assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has robust remedies for recovering misappropriated assets, most of the remedies allow you to regain control or prevent dissipation of assets before having to demonstrate your claim. There is a special maritime jurisdiction, that given Panama\u00b4s central position in the maritime industry, has become worldwide competitive, \u201cin rem\u201d claims against vessel or cargo are widely accessible and relative low on cost. Within the ordinary civil process preemptive claims are numerous and efficient in using the powers of the judge to seize or regain assets. The general requirements are a title of property or legitimate claim, a potential risk of dissipation of the assets, typically demonstrated by the loss of possession or imminent loss of possession, and a bond in certain types of claims.<\/p>\n<p>Other vindicatory actions available may be found in the administrative jurisdiction that can be accessed to regain control of property from tenants or invaders, similarly within the criminal jurisdiction where judges have ample faculties to dispose, retain, assign control or possession of assets associated to a criminal investigation which can be used in favor of the victims.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the relevant limitation periods for civil asset recovery claims? Are there extensions or suspensions in cases involving fraud, concealment, or delayed discovery?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The relevant limitation periods broadly speaking are within one year if the claimant only had possession of the assets but not the property, or if the claim relates to extra-contractual affairs. The general statute of limitation for personal claims is seven years, for land assets related claims is fifteen years. There are special limitation periods for other specific claims. Concealment and bad faith does affect the limitations periods, allowing the party to act after damages are materialized. Criminal limitations for fraud of important sums or assets is ten years, and for the laundering of those assets, twelve years after the concealment or dissipation occurred.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the applicable standard of proof in civil asset recovery proceedings? How does this compare to the criminal standard, if relevant?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The typical standard of proof for civil procedure is preponderance of evidence and there is usually a judicial consensus on how a party may proof their rights over assets, such as a property title inscribed in the public registry or a share certificate noted in the share book of a company. This may lead to confusion in some cases as sophisticated fraudsters may obtain these documents via illegitimate means such as deception or forgery. This reality has made it a common occurrence that criminal action acts in parallel to civil asset recovery proceedings, the standard of proof for criminal action is reasonable doubt that operates in favor of the defendant, but the faculties of a prosecutor can go beyond the apparent good standing of documents pertaining asset ownership. As such, prosecutors tend to inquiry in the material facts that led to the issuance of documents, rather than rely solely on said documents, as their responsibility is to look into possible false representations and overall dishonesty,<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where does the burden of proof lie, and are there any evidential presumptions or burden-shifting mechanisms (e.g. in cases involving unexplained wealth or transactions at an undervalue)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the civil jurisdiction, the burden of proof lies on the party that makes a specific claim. The criminal jurisdiction sets the burden of proof in the prosecution with the exception of money laundering cases, where the party being accused of money laundering have the burden of proof to legitimize the origin of the assets. This is relevant for asset recovery cases, as fraud and theft are precursors to money laundering, so a private plaintiff can participate in the criminal prosecution to demand the taken assets and try force a favorable decision regarding the illegitimate possession of assets in general.<\/p>\n<p>High ranking public servants have the obligation to declare their assets, as such the unexplained wealth involving these public servants can automatically generate criminal investigations that may result in the forfeiture of the assets. The recovery of these assets by a third party is rare but possible, it would have to be claimed within the process or separately if the third party is able to stand as a victim of criminal conduct from the public servant that resulted in the loss of assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What defences are available to respondents in civil asset recovery proceedings (e.g., change of position, limitation, laches, good-faith purchaser for value)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are multiple defenses for respondents in Panama, good faith possession or ownership is one of the most common as many parties did engage with the assets legitimately unbeknownst that the asset was engaged in a legal dispute. Statute of limitation periods if the claimant did not act on time and others defenses particular to specific situations. Procedural defenses also include arguments such as lack of legitimacy of the claimant, for example if an alleged shareholder fails to evidence the good standing of the shares. Double jeopardy if the claimant have already made a claim in the past and is intending to repeat the same claim. Payment or fulfillment of an obligation if the claim has already been compensated or the obligation does not exist. Other specific defenses if the claimant in special procedures does not meet special requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are third-party rights protected in civil recovery proceedings? What mechanisms exist for innocent parties to assert their interests in assets subject to recovery claims?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Third parties, once constituted within a case have the same rights to intervene as any of the other parties; they have the right to claim and to prove that claim, moreover they can intervene in the procedure after it has already started, even in later stages. Panamanian law recognizes that third parties can intervene to aid a claimant or to defend against a claim. Third parties can be benefited by decisions even if they did not attended a process, whenever that process issued a general summon for interested parties that may have included that particular third party.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How does your jurisdiction classify cryptocurrencies and other digital assets for civil recovery purposes? Are they capable of being held on trust or subject to proprietary or equivalent claims?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, there is currently no regulation governing cryptocurrencies or other digital assets. Cryptocurrencies operate within a market created and used by their users. In 2018, the Superintendency of Banks of Panama issued a Public Notice stating that activities carried out through cryptocurrencies or similar instruments do not fall within its jurisdiction. This reinforced the position that crypto-assets are not regulated or supervised by any state institution.<\/p>\n<p>Although cryptocurrencies are permitted under Panamanian law, they remain outside the financial protection framework provided by Panama\u2019s regulatory system to consumers. The topic is still under discussion, as a legislative bill aimed at regulating crypto-assets with a consumer-protection approach is currently under review.<\/p>\n<p>Because of the absence of regulation, digital assets are generally not treated as formally recognized assets in legal proceedings. Accordingly, cryptocurrencies and digital assets are not currently regulated or classified for civil recovery purposes. However, they may still be held on trust and be subject to proprietary claims based on the general liability principles of the Panamanian Civil Code, which establishes that anyone who causes damage to another through fault or negligence must repair the harm caused.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What interim relief mechanisms exist for freezing or preserving digital assets (e.g., access to private keys, hardware wallets, exchange-held accounts)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the absence of specific regulation, there is generally no direct state intervention in digital assets, which largely remain peer-to-peer in nature. However, the Panamanian legal system allows precautionary measures over assets or property rights regardless of their technological form. One such measure is judicial sequestration, which consists of the seizure or immobilization of an asset to prevent the defendant from transferring, concealing, or dissipating it during the proceedings.<\/p>\n<p>A court may also issue orders directed at cryptocurrency exchanges to freeze accounts. Authorities may seize hardware wallets, computers, or other devices containing private keys. In criminal proceedings, prosecutors may request the seizure of assets linked to an alleged offense in order to prevent their disappearance or disposal. In cases involving crimes such as money laundering, corruption, drug trafficking, or illicit enrichment, the accused may be required to demonstrate the lawful origin of the assets in order to lift the measure.<\/p>\n<p>Additionally, the procedural system allows open-ended conservatory measures that give judges discretion to order atypical measures when necessary to preserve the effectiveness of the proceedings. In the context of digital assets, these may include orders prohibiting the transfer of crypto-assets, orders requiring disclosure of access credentials, preservation of transaction records, or the blocking of APIs or accounts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What disclosure and tracing, disclosure and investigative tools are available for identifying and following digital asset transactions, and what practical challenges arise in obtaining information from exchanges or service providers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama does not currently have a specific legal regime designed exclusively for the disclosure, tracing, or investigation of cryptocurrency or digital asset transactions. However, the general evidentiary and investigative mechanisms available under civil and criminal law may be applied when digital assets are involved in a dispute or investigation.<\/p>\n<p>In civil proceedings, courts may order the production or disclosure of documents when a party demonstrates that certain information is relevant to the case. Under the Panamanian Judicial Code, a judge may order the delivery or preservation of records held by the opposing party or by third parties. In the context of digital assets, this could include transaction histories, exchange account records, communications related to transactions, or other documents that help identify ownership or asset movement.<\/p>\n<p>In criminal investigations, the Public Prosecutor\u2019s Office has broader powers and may seek judicial orders to obtain financial information, electronic records, or data from digital service providers when investigating crimes such as fraud or money laundering. Parties may also rely on private blockchain forensic experts to trace transactions, analyze asset movement patterns, and potentially link wallet addresses to specific users or platforms.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are legal costs allocated in civil asset recovery proceedings? What is the general rule on costs, and what exceptions apply?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The general rule in Panama follows the principle that the losing party must bear the legal costs incurred during litigation. Costs usually include necessary procedural expenses such as court fees, notification expenses, expert fees, and, in some cases, reasonable attorney\u2019s fees determined by the court according to applicable criteria.<\/p>\n<p>The judge typically determines the allocation of costs in the final judgment once it has been established which party was unsuccessful in the proceedings. In situations of partial success, the court may divide the costs proportionally between the parties or decide that each party should bear its own expenses depending on the degree of success achieved.<\/p>\n<p>There are circumstances in which the judge may depart from this general rule. For example, the court may decide not to impose costs if there was reasonable doubt regarding the legal issue or if both parties had plausible grounds to litigate. If a party is found to have acted recklessly or in bad faith, the court may order that party to pay costs even if it did not lose every aspect of the case.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are third-party funding, contingency fees, conditional fee arrangements, or damages-based agreements, or other alternative funding mechanisms available? What are the rules on security for costs?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, alternative litigation funding mechanisms are not extensively regulated by procedural legislation, but certain arrangements are used in practice within the limits established by civil and professional regulations. Contingency fee agreements are generally accepted, allowing a lawyer\u2019s compensation to depend wholly or partially on the outcome of the case, typically calculated as a percentage of the amount recovered.<\/p>\n<p>Conditional or hybrid fee arrangements are also used in practice, combining a reduced initial payment with an additional component that depends on the success of the litigation. These arrangements rely on the principle of contractual freedom recognized under the Panamanian Civil Code, provided that the fees are not abusive and comply with professional ethical standards.<\/p>\n<p>Third-party litigation funding is not specifically regulated in Panama. While it is not expressly prohibited, there is no clear legal framework governing the participation of external funders in civil litigation. Regarding security for costs, when a party requests precautionary measures such as the attachment or sequestration of assets, the court generally requires the applicant to provide a bond or guarantee to cover potential damages if the measure is later found to have been unjustified.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do insolvency proceedings interact with civil asset recovery actions? Can tracing or proprietary claims be pursued within insolvency, and what priority do such claims receive?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If a claimant cannot establish a proprietary right over an asset and the claim is limited to a creditor\u2019s claim, the claimant will be treated as a creditor within the insolvency proceeding. In that case, the claim will be satisfied according to the priority rules established under insolvency law.<\/p>\n<p>Law 12 of 2016, which regulates insolvency proceedings in Panama, establishes a system of priority among creditors. Certain categories of claims receive preferential treatment, while unsecured creditors are generally placed in a lower position in the distribution of the debtor\u2019s assets.<\/p>\n<p>If a claimant successfully demonstrates a proprietary right over a specific asset, the asset may be excluded from the insolvency estate. In that situation, the property is not considered part of the debtor\u2019s assets available for distribution among creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are claims for the recovery of misappropriated assets treated in the insolvency of the wrongdoer or intermediary? What is the relationship between civil recovery and insolvency clawback or avoidance provisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Once insolvency proceedings begin, individual collection actions against the debtor are usually suspended or consolidated within the insolvency process in order to preserve equality among creditors and ensure an orderly administration of the debtor\u2019s assets. As a result, victims seeking to recover assets must often submit their claims within the insolvency proceeding.<\/p>\n<p>In relation to clawback provisions, insolvency law allows certain acts carried out by the debtor before or after the opening of insolvency proceedings to be challenged. Payments or legal acts of disposition carried out after the declaration of liquidation may be declared null, and the liquidator may seek their annulment through summary proceedings before the competent judge. There is also a criminal offence in the Panamanian Penal Code that penalizes fraudulent insolvency or dissipation of assets from debtors. This accessible mechanism will put pressure on the wrongdoer to find alternative conflict resolution methods with the victims.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key practical challenges facing practitioners in asset tracing and recovery (e.g., complex structures, offshore jurisdictions, banking secrecy, non-cooperative intermediaries)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are many challenges facing practitioners in asset tracking and recovery, some of the most common ones are dissipation in cash, or multiple transfers that often include innocent third parties. Offshore jurisdictions or international elements can be present in asset dissipation, in these cases, international cooperation can be effective but it is oftentimes not efficient as it can be very slow to coordinate between jurisdiction and simple answers can take months and even years to arrive. Banks are being cooperative due to international regulators; however, active prosecutors or judges are required to demand the information in a timely manner.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What strategic considerations arise when choosing between different civil causes of action or pursuing parallel proceedings? Can civil proceedings be stayed pending related criminal or regulatory actions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The parties may request a Judge to shut down a civil claim if it deems that it is pursuing or related to the same conflict as an existing one. Civil proceedings cannot be stayed pending criminal proceedings or regulatory actions, however the decision over criminal proceedings commonly generate a new opportunity for a civil claim related to damages or responsibilities derived from criminal activity. This is an important tool to reestablish a civil claim whenever there are doubts about the statute of limitations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What significant recent cases, reforms, or emerging trends have affected asset recovery practice (including developments in sanctions regimes, beneficial ownership transparency, AML rules, or cross-border enforcement)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>One mechanism for asset recovery that has been widely discussed in Panama is non-conviction based forfeiture, also referred to as extinction of domain. It has been described as a legal consequence of illicit activities through which a court declares that assets of illicit origin or use become property of the State without compensation.<\/p>\n<p>Studies by the United Nations Office on Drugs and Crime indicate that a significant portion of criminal proceeds leave the country where they were generated, which highlights the importance of international cooperation in asset recovery. Panama has procedural and substantive mechanisms that allow the pursuit of assets linked to criminal activity, and various bilateral treaties on criminal cooperation facilitate cross-border recovery efforts.<\/p>\n<p>Recent reforms have also focused on transparency and anti-money laundering measures. Law 129 of 2020 created a private registry of beneficial owners of legal entities, requiring resident agents to maintain updated information accessible to competent authorities. Law 254 of 2021 strengthened this framework by requiring companies to maintain accounting records and financial documentation and by introducing sanctions for non-compliance. These reforms contributed to Panama\u2019s removal from the FATF grey list in October 2023 and have strengthened the credibility of the country\u2019s financial system.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5420<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/136822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=136822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}