WORLD TRADE G/SG/N/1/PAN/1
9April 1998
ORGANIZATION(98-1468)
Original: Spanish Committee onSafeguards
NOTIFICATION OFLAWS, REGULATIONS AND
ADMINISTRATIVE PROCEDURES RELATING
TOSAFEGUARD MEASURES
PANAMA
Thefollowing communication, dated 26March 1998, hasbeenreceived fromthePermanent
Mission ofPanama.
_______________
Inaccordance withtheestablished procedures, Iamforwarding herewith thetextofthe
Panamanian legislation onsafeguard measures.
Itshould benoted thatthePanamanian legislation onsafeguard measures isincorporated in
Law29of1February 1996 enacting rules toprotect competition andadopting other measures.
InthatLawsafeguard measures aredealtwithunder thefollowing titles:
TitleIV:"Safeguard Measures" (Article 91ff.);
TitleVI:"Provisions Common tothePreceding Titles"(Article 115ff.);
TitleVII: "Administrative Procedure" (Article 118ff.).G/SG/N/1/PAN/1
Page2
LAW NO.29
1February 1996
Enacting Rules toProtect Competition andAdopting Other Measures
THE LEGISLATIVE ASSEMBLY
DECREES:
TitleIV
Safeguard Measures
Chapter I
Object
Article 91.Object. Theprovisions ofthisTitleareintended toprovide domestic products
withobjective andtemporary protection against massive imports ofidentical, likeordirectly competitive
products, asaresult ofunforeseen developments ortheeffect ofinternational obligations incurred or
unilaterally agreed measures, including tariff liberalization, which cause orthreaten tocause serious
prejudice tothedomestic industry orproduction.
Chapter II
Serious Prejudice orInjury
Article 92.Definitions. Serious injury orprejudice means asignificant overall impairment
intheposition ofthedomestic industry orproduction.
Threat ofserious injury orprejudice means thatamajor impairment intheposition ofthe
domestic industry orproduction isclearly imminent.
Adirectly competitive product isonewhich, while notbeing identical orsimilar tothatwith
which itiscompared, issubstantially equivalent forcommercial purposes inthatitisintended forthe
same useasandisinterchangeable withthelatter.
Domestic industry orproduction means theproducers asawhole ofidentical, similar ordirectly
competitive goods orthose whose collective output ofidentical, similar ordirectly competitive goods
constitutes asignificant majority ofthedomestic production ofsuchgoods intended forinternal
consumption.
Article 93.Determination ofserious prejudice orinjury. Indetermining theexistence ofserious
prejudice orinjury account shallbetaken ofthefactors ofanobjective nature having abearing on
thedomestic industry orproduction affected. These factors areasfollows:
1. Theinability ofareasonable number ofenterprises tooperate atareasonable levelofprofit;
2. significant unemployment inthedomestic industry orbranch ofproduction;G/SG/N/1/PAN/1
Page3
3. therateandamount oftheincrease inimports oftheproducts inquestion, inabsolute and
relative terms;
4. theshare ofthedomestic market taken byincreased imports;
5. anysubstantial change inthelevelofsales, production, productivity, capacity utilization, profits
orlosses, andemployment.
Article 94.Determination ofathreat ofserious injury orprejudice. Anydetermination of
athreat ofserious injury orprejudice shallbebased onfactsandnotmerely onallegation, conjecture
orremote possibility andaccount shallbetaken ofthefollowing factors ofanobjective nature:
1. Reductions insalesormarket share;
2. anincrease ininventories;
3. adecline inproduction, profits, wages oremployment;
4. theinability togenerate thecapacity necessary tomodernize capital equipment ormaintain
levels ofexpenditure onresearch anddevelopment.
Article 95.Causal link. There shallbeacausal linkifitcanbeobjectively demonstrated
thattheserious injury orprejudice orthethreat ofserious injury orprejudice isadirect andimmediate
consequence ofincreased imports oftheproduct inquestion.
Ifother factors simultaneously prejudice thedomestic industry orproduction, theprejudice
caused bythose factors shallnotbeattributed totheimports subject toinvestigation.
Chapter III
Safeguard Measures
Article 96.Definition. Safeguard measures areinstruments oftemporary protection applied
forsuchperiod oftimeasmaybestrictly necessary toprevent orremedy theserious prejudice orinjury
tothedomestic industry orproduction andtofacilitate adjustment.
Safeguard measures shallbeapplied totheproduct imported irrespective ofthecountry from
which itisimported.
Article 97.Form. Safeguard measures maytakethefollowing forms:
1. Tariff increases;
2. imposition oftariff quotas;
3. imposition ofquantitative restrictions;
4. anyother measure compatible withPanama 'sinternational obligations thatcounteracts the
material prejudice orinjury orthreat ofmaterial prejudice orinjury caused byinternational
market access obligations orbyunilateral measures.G/SG/N/1/PAN/1
Page4
Article 98.Duration. Safeguard measures shallhaveamaximum duration offour(4)years.
Thismaybeextended foranequal period if,attherequest ofaparty, itisdetermined thatthemeasure
continues tobenecessary toprevent orremedy theserious prejudice orinjury.
Article 99.Liberalization. When theduration ofasafeguard measure exceeds oneyear, it
shallbeprogressively liberalized forperiods ofoneyear, tofacilitate adjustment.
Ifasafeguard measure isextended, itmaynotbemore restrictive thanitwasattheendof
theinitial period andmust continue tobeprogressively liberalized.
Likewise, asafeguard measure shallbeliberalized ifthedomestic industry orproduction does
notcomply withtheplantoovercome thecircumstances alleged tobethecause oftheinjury orthe
restructuring planlaiddown inthefinaldecision.
Article 100.Exception. Safeguard measures shallnotbeapplied against aproduct originating
inadeveloping country Member oftheWorld Trade Organization aslongasimports oftheproduct
concerned donotexceed three percent(3%) oftotalimports, andprovided thatdeveloping country
Members oftheOrganization withlessthanthree percent(3%) import share collectively account for
notmore thanninepercent(9%) oftotalimports oftheproduct concerned. Thisprovision shallenter
intoforce from thetimeofPanama 'saccession totheWorld Trade Organization.
TitleVI
Provisions Common tothePreceding Titles
Single Chapter
Common Provisions
Article 115. Conversion ofthePrice Regulation Office andtheDirectorate forConsumer
Protection Thebudget items allocated tothePrice Regulation Office andtheDirectorate forConsumer
Protection shallbetransferred totheCommission. Suchcivilservants employed bythePriceRegulation
Office andtheDirectorate forConsumer Protection asarerequired foritsoperation shallberelocated
intheCommission; theremaining staffmembers employed bythose twoentities shallbetransferred
toother government departments where theyshallreceive thesame remuneration.
Article 116.Statutory limitation. Action toinitiate theprocedure shallbesubject toalimitation
ofthree(3)years, fromthemoment atwhich thefaulttookplace inthecaseofpractices which restrict
competition, orfromthemoment atwhich thefaultiseffectively known inthecaseofunfair trading
practices.
Similarly, thereisalimitation ofoneyearforsuchaction withrespect toconsumer protection.
Thisperiod oflimitation shall beinterrupted upon submission andnotification oftherequest in
accordance withthegeneral provisions oftheJudicial Code.
Article117.Dissemination.TheCommissionshalldisseminatethisLawthroughoutthenational
territory andshallorganize campaigns toinform thepublic oftherights andobligations ofconsumers
andeconomic agents andhowtomake usethereof. Similarly, theCommission shallcoordinate with
business andconsumer organizations thepreparation ofrecommendations forthedrawing upofcontract
documents intheareas governed bythisLaw.G/SG/N/1/PAN/1
Page5
Inconnection withtheabove provision, theannual budget oftheCommission shallinclude,
inaddition totheallocations covering thecostofitscampaigns toinform consumers, atotalamount
which shallinnocaseexceed 10percent(10%) ofitsdissemination andadvertising budget inthe
form ofatransfer todulyconstituted consumer associations recognized bytherelevant entities.
TitleVII
Administrative Procedure
Chapter I
Verification ofConcentrations
Article 118. Verification procedure. Inverifying concentrations, theCommission shallin
allcases comply withthefollowing procedure:
1. Theeconomic agent concerned shallsubmit thecorresponding notification inwriting together
withacopyofthejudicial actatissue, thenames orbusiness addresses oftheparties involved,
theirfinancial statements fromtheprevious financial year, theirshare intherelevant market
andother datarequired fortheexamination ofthetransaction.
2. TheCommission mayrequest additional dataordocumentation within aperiod oftwenty (20)
calendar daysfollowing receipt ofthenotification.
3. TheCommission shallhaveaperiod ofuptosixty (60)calendar daysfollowing thedateof
receipt ofthenotification or,where appropriate, thedateofreceipt oftheadditional dataor
documentation, toissue adecision. Ifnodecision hasbeenissued within thatperiod, the
concentration shallbeunderstood tohavebeenapproved.
4. Thedecision oftheCommission shallbedulyreasoned andsubstantiated inlaw.
5. Afavourable decision bytheCommission shallhavenobearing onother monopolistic practices
prohibited bylaw.
6. TheCommission mayreject arequest foraverification thatisobviously unjustified orwhen
ithaspreviously issued anopinion onsuchverification.
Chapter II
Conciliation Process
Article 119. Complaints. Theconsumer maysubmit acomplaint against asupplier tothe
Commission, which shallendeavour toreconcile thepositions oftheparties. Complaints shallbefiled
inwriting.
ThisArticle shallberegulated bytheexecutive body.
Article 120. Summons. Upon receipt ofthecomplaint, asummons shallbeserved onthe
supplier indicating thedate,timeandplace, andthereason fortheproceedings, which shallbenotified
nolessthantwo(2)daysinadvance.G/SG/N/1/PAN/1
Page6
Failure torespond toasummons shallnotconstitute disobedience orjustify apresumption
ofguilt.
Article 121.Conciliation. Theprocess shallbeoralandinformal. Theconciliator shallreview
thecase,inform theparties oftherelevant provisions ofthelawandseektoreach anamicable settlement
between them.
Theconciliator shallkeeparecord oftheproceedings, andifnosettlement isreached, shall
soindicate incasetheconsumer wishes toseekjudicial remedy.
Themayors oftheprovincial capitals shallbeappointed toconduct theconciliation process
initiated onwritten complaint byconsumers inaccordance withTitleVIIofthisLaw.
Chapter III
Safeguard Measures Proceedings
Section 1
Proceeding
Article 122.Initiation ofproceeding. Theinvestigation todetermine safeguard measures shall
beinitiated onapplication. TheSubstantiating Commissioner shallcarry outtheentire proceeding
andgivearuling intheformofareasoned decision, inaccordance withtheprovisions ofArticle 137
ofthisLaw.
Article 123. Entitlement. Thedomestic industry orproduction injured bytheimports subject
toinvestigation shall beentitled toinitiate aproceeding. Producers 'associations which consider
themselves injured bytheimports subject toinvestigation shallalsobeentitled toinitiate aproceeding
provided theyaccount, individually orcollectively, fornotlessthantwenty-five percent(25%) of
domestic production ofthegoods intended fordomestic consumption.
Article 124. Application fortheinitiation ofaproceeding. Theproceeding shallbeinitiated
bythesubmission ofanapplication, prepared byacompetent attorney, clearly indicating thefactual
andlegalgrounds orbasis fortherequest andaccompanied bysufficient evidence ofimports thatare
causing orthreatening tocause serious injury tothedomestic industry orproduction andofacausal
link.
Theapplication shallcontain thefollowing minimum information:
1. Particulars oftheapplicant;
2. thepercentage ofdomestic production ofgoods intended fordomestic consumption represented
bythegoods which theapplicant produces forthedomestic market;
3. detaileddescriptionandtariffheadingoftheimportedproduct,specifyingitsqualityascompared
withdomestic production andother characteristics;
4. volume andprices oftheimports subject toinvestigation andtheirimpact onthedomestic
production affected;
5. thenames andaddresses oftheimporters and,ifknown, oftheexporters;G/SG/N/1/PAN/1
Page7
6. thecountry oforigin andofexport;
7. determination ofserious injury orprejudice orthreat ofserious injury orprejudice, using the
parameters indicated inTitleIV,Chapter IIofthisLaw;
8. arestructuring planoraplantoovercome thecircumstances alleged tobethecause ofthe
serious injury orprejudice orthreat ofserious injury orprejudice, provided thatthese
circumstances arevariables which thedomestic industry orproduction concerned isableto
control.
Article 125. Procedure. Having received theapplication, theSubstantiating Commissioner
shalldetermine whether itmeets therequirements ofthisLawand,ifso,shallinitiate aninvestigation.
Iftheapplication doesnotmeettherequirements ofthisLaworif,eventhough itmeets those
requirements, theinformation submitted isnotclear, theapplicant shallberequested toamend the
application orfurnish therelevant documents within five(5)working daysofnotification. Ifthisperiod
elapses without theapplicant complying withtherequest, theapplication shallberejected andplaced
onfile,untilitisamended.
TheCommission mayreject outright applications which clearly donotcomply withthecausality
provisions orareobviously groundless.
Article 126. Public notice oftheinitiation ofaninvestigation. Once theapplication hasbeen
accepted andaninvestigation initiated, asummary oftheapplication shallbepublished inanewspaper
witharecognized national circulation.
Article127.Communication.Theapplicationsubmittedshallbecommunicatedtotheinterested
parties within aperiod offorty (40)working daysstarting seven (7)calendar daysafteritsdateof
dispatch. Likewise, acopy oftheapplication shallbecommunicated totheauthorities specified in
theinternational agreements towhich Panama isparty.
Theapplication shallbeaccompanied byaquestionnaire detailing thepoints towhich reference
should bemade inthereply.
Ifnoreply isreceived within thetimeallowed, thecompetent authority shallproceed with
theinvestigation exofficio.
Section 2
Evidence
Article 128. Evidence. Theapplicant shall adduce orsupply evidence thatimports have
increased andthatsuchincrease iscausing orthreatens tocause serious prejudice orinjury todomestic
production orindustry inaccordance withthisLaw.
TheCommission shallusesound criticism asasystem forevaluating theevidence.
Article 129. Examination oftheevidence. TheCommission shallrequire andexamine only
suchevidence asisnecessary andrelevant indetermining thetruth ofthefactsunder investigation
inaccordance withtheinformation supplied bytheparties andtheprovisions ofthisLaw, within a
time-limit notexceeding 30working daysfollowing theresponse tothecommunication.G/SG/N/1/PAN/1
Page8
Inorder toproceed better, theCommission mayatanytimerequest anykindofinformation
ortechnical parameters fromanyofthegovernment agencies, which shallberequired tosupply them.
Itmayalsorequest theinterested parties tosupply questionnaires, expert reports, opinions
ortechnical criteria asitdeems appropriate, andorder anytypeofmeasure tohelptoascertain the
alleged facts.
Article 130.Evidence abroad. TheCommission may,withaviewtoverifying theinformation
received orobtaining further details, conduct investigations andobtain evidence intheterritory ofthe
exporting country, provided ithassonotified theauthorities oftheexporting country andencountered
noobjection. Theinvestigation andexamination ofevidence mayalsotakeplace inthefacilities of
theexporting enterprise subject toprior approval.
Article 131. Access toinformation. When theauthorities oftheexporting country orthe
interested parties denyaccess tothenecessary information, refuse toprovide suchinformation within
areasonable time-period orseriously impede theinvestigation, preliminary ordefinitive conclusions
maybereached onthebasis ofthefactsavailable.
Section 3
Provisional Safeguard Measures
Article 132. Requirements. Through areasoned decision, theCommission mayrecommend
theCabinet Council orsuchentity astheLawspecifies toadopt provisional measures inorder toprevent,
during theperiod oftheinvestigation, serious andimminent prejudice todomestic industry orproduction
thatisdifficult torepair, provided theincrease inimports hasbeenfound tohavecaused orthreatened
tocause serious prejudice orinjury.
Thereasoned decision shallsetforth thearguments oftheapplicant, theevidence furnished
bytheapplicant andthearguments infavour ofimposing aprovisional measure.
Article 133.Application. Theprovisional safeguard measure shallconsist oftemporary tariff
increases. Where itisfound thattheincrease inimports hasnotcaused orthreatened tocause serious
prejudice orinjury todomestic industry orproduction, thetemporary tariff increases shallbepaid
backtotheimporters.
Theduration oftheprovisional safeguard measures shallnotexceed twohundred (200) days.
Article 134. Imposition. TheCommission shalltransmit totheCabinet Council, through the
Ministry ofTrade andIndustry, ortosuch entity asthelawspecifies, acopy ofthedecision
recommending theprovisional safeguard measures sothatitmayimpose suchmeasures inaccordance
withtheauthority granted under Article 195,paragraph 7oftheConstitution orinconformity with
thelaw.
Article135.Publication.Asummaryoftheprovisionalsafeguardmeasurethathasbeenadopted
shallbepublished inanewspaper witharecognized national circulation.G/SG/N/1/PAN/1
Page9
Section 4
Hearing andFinal Resolution
Article 136. Hearing. Having completed theexamination oftheevidence andbefore issuing
afinaldecision, theSubstantiating Commissioner shallsummon alloftheinterested parties toahearing
forthepurpose ofinforming themof,andhearing theirviews on,theessential factsunder consideration
andwhich aretoserve asabasis forthedecision whether ornottoapply safeguard measures. The
parties shallbegiven aperiod ofthreeworking daystosubmit arguments indefence oftheirinterests.
Article 137.FinalResolution. Upon receiving thearguments, theSubstantiating Commissioner
shallhave10working daysinwhich toissue asubstantiated decision, which shallinclude:
1. Ananalysis showing that:
(a) Imports ofthespecific product inquestion have increased massively owing toan
unforeseen change ofcircumstances andasaresult ofinternational obligations entered
intoormeasures agreed unilaterally, including tariff reductions, inquantities suchas
tocause orthreaten tocause serious prejudice orinjury, inabsolute orrelative terms,
tothedomestic industry orproduction ofidentical, likeordirectly competitive goods;
(b) massive imports resulting fromtheabove-mentioned circumstances cause orthreaten
tocause serious prejudice orinjury tothedomestic industry orproduction ofidentical,
likeordirectly competitive goods.
2. Where appropriate, arecommendation calling fortheapplication of:
(a) Aplantoovercome thecircumstances which, according totheapplication forinitiation
oftheprocess, arethecause oftheserious injury orprejudice todomestic industry
orproduction, provided thatthese circumstances arevariables which thedomestic
industry orproduction concerned isabletocontrol. TheCommission shallreview
theapplication oftheplanevery six(6)months untiltheperiod ofapplication ofthe
safeguard measures, which shallnotexceed fouryears andisnotsubject torenewal,
expires; or
(b) aplantorestructure theaffected domestic industry orproduction, submitted withthe
application fortheinitiation oftheproceedings, provided thatthecircumstances alleged
tobethecause oftheserious injury orprejudice totheaffected domestic industry or
productionarevariableswhichtheyareunabletocontrol.TheCommissionshallreview
therestructuring twice within theperiod ofapplication ofthesafeguard measure, which
shall notexceed four(4)years. Thefour-year period mayberenewed onthe
recommendation oftheCommission following thesecond review oftherestructuring
plan, provided thatthecircumstances which thedomestic industry orproduction are
unable tocontrol havenotvaried;
(c) failure bytheaffected domestic industry orproduction toimplement theplans described
inparagraphs (a)and(b)above shallleadtotheimmediate suspension ofthesafeguard
measures;
3. Arecommendation bytheCabinet Council orbysuchentity asthelawmayspecify toimpose
safeguard measures ontheimports ofthespecific product.G/SG/N/1/PAN/1
Page10
Otherwise, theSubstantiating Commissioner shalldisregard theapplication andterminate the
proceedings.
Article 138. Appeal andexhaustion ofgovernment remedies. Theremedy ofappeal isthe
onlyremedy against thefinalresolution, anditmust belodged andsubstantiated before thefull
Commission within ten(10)working daysfollowing notification.
Theinterested parties shallbeinformed oftheappeal within five(5)working dayssothatthey
maypresent theirarguments.
ThefullCommission shallhavefifteen (15)working daysinwhich tosettle theappeal, after
which government remedies willhavebeenexhausted, opening thewaytotheadministrative challenge
system.
Theappeal shallhaveasuspensive effect.
Article 139. Imposition ofsafeguard measures. Acopy oftheFinal Resolution shall be
transmitted through theMinistry ofTrade andIndustry totheCabinet Council ortosuchentity as
thelawspecifies sothatsafeguard measures maybeimposed inaccordance withtheauthority granted
under Article 195,paragraph 7oftheConstitution orinconformity withthelaw.
Article 140. Publication. Theoperative partoftheFinal Resolution, onceithasbeencleared
atgovernmental level, itshallbepublished intheOfficial Journal. Anysubsequently agreed amendment
thereto shallalsobepublished inanewspaper withrecognized national circulation.
FOR COMMUNICATION AND IMPLEMENTATION.
Adopted onthird reading atthePalacio Justo Arosemena inPanama Cityonthe...dayof
January 1996.
ThePresident,
Dr.Carlos R.Alvarado A.
TheSecretary General,
Erasmo Pinilla C.
__________