Panama 1972 Constitution (reviewed 2004) - Page 10 of 15

Table of Contents

TITLE X. NATIONAL ECONOMY

Article 282

The exercise of economic activities corresponds primarily to private parties. But the State will guide, direct, regulate, replace or create such activities in accordance with social need and within the norms of the present Title, for the purpose of increasing National wealth and assuring its benefits to the largest possible number of inhabitants of the country.

The State shall plan economic and social development by means of special sections or departments, the organization and functions of which shall be determined by law.

Article 283

Measures which shall be established by law to accomplish the purpose dealt with in a preceding Article are:

The creation of Commissions of technicians and specialists to study the conditions and the possibilities of all types of economic activities, and to formulate recommendations for developing them;
The promotion of the creation of private enterprises that will function in accordance with the recommendations mentioned in the preceding sections, and the establishment of State enterprises and the encouragement of the formation of mixed companies with State participation. State companies shall be established to meet social needs and for public security and the public interest;
The establishment of credit and development institutions or other appropriate facilities to serve those engaged in small economic activities;
The establishment of theoretical-practical centers for teaching of Commerce, Agriculture, Cattle-raising, Tourism and Arts and Crafts, including the Manual Arts, and for the training of workers and specialized industrial managers.

Article 284

The State will intervene in any kind of private enterprise, in accordance with the regulations established by law, to ensure social justice to which the present Constitution refers and especially for the following purposes:

To regulate, through special institutions, service rates and prices of items of any nature and specially those of basic necessity;
To demand proper efficiency in services and adequate quality in articles mentioned in the preceding section;
To coordinate services and the production of goods. Articles of basic necessities shall be defined by law.

Article 285

Panamanian capital must constitute the majority invested in private undertakings of public utility that operate in the country. Exceptions shall be permitted and defined by law.

Article 286

The State shall create public utility enterprises through Autonomous or Semi-autonomous Entities, and other adequate means. In the same manner, it shall assume ownership, through expropriation and compensation, of public utility enterprises belonging to private persons, if authorized in each case by law, and when necessary for collective welfare.

Article 287

In areas or regions in which the level of social or economic development so requires, the State may establish Autonomous or Semi-autonomous National, Regional or Municipal Institutions to promote comprehensive development of the section or region. These institutions may coordinate State and Municipal programs in cooperation with Municipal or Inter-Municipal Councils. The organization, jurisdiction, financing and supervision of fiscal duties of such development institutions shall be regulated by law.

Article 288

It is the duty of the State to promote and supervise Cooperatives, and for this purpose it shall create those institutions that may be necessary. A special rule for their organization, functioning, recognition and registration, which shall be free, shall be prescribed by law.

Article 289

The State shall regulate the suitable use of land in accordance with its potential use and National development programs, in order to yield optimum benefits.

Article 290

No foreign Government nor foreign official or semi-official entities or institutions may acquire title over any part of the National territory, except for Embassies in accordance with the provisions of the law.

Article 291

No foreign natural or juridical person, nor National juridical person having foreign capital, entirely or in part, may acquire ownership of National or private lands situated at a distance less than ten kilometers from the border.

Insular territory may only be transferred for specific purpose of National development and under the following conditions:

When it is not considered a strategic area or reserved for Governmental Programs;
When it is declared an area of special development, and legislation has been prescribed for its development, provided National safety is guaranteed.

The transfer of insular territory does not affect the State ownership of properties for public use.

In the preceding cases, vested rights operating at the time this Constitution becomes effective will be respected; however, the respective property may be expropriated at any time through payment of an adequate compensation.

Article 292

There shall be no property that may not be freely transferred, nor irredeemable obligations, except what is stipulated in Article 62 and 127 hereof. Nevertheless, temporary limitations to the right of transfer and the conditions or modes that suspend or retard the redemption of the obligations shall be valid for a maximum period of twenty years.

Article 293

Only the following may engage in retail trade:

Panamanians by birth;
Individuals who, at the time this Constitution becomes effective, were naturalized and married to a Panamanian national or had children by a Panamanian national;
Naturalized Panamanians, not included in the preceding case, after three years from the date of their obtaining their final papers;
National or foreign juridical persons and foreign natural persons who at the time this Constitution becomes effective, were engaged in retail trade, in accordance with the law;
Juridical persons formed by Panamanians or by foreigners authorized to engage in it individually, in accordance with this Article, as well as those who, although not constituted in the manner herein provided, are legally engaged in retail trade at the time this Constitution becomes effective.

Foreigners not authorized to engage in retail trade may not participate in those companies which sell products manufactured by same, as well.

Retail trade is defined as engaging in sales to the consumer, acting as agent or Representative of productive or mercantile concerns, or engaging in any other activities classified by law as pertaining to such trade.

There are excepted from this rule cases in which the farmer, or manufacturer in manual industries, sells his/her own products. A system of supervision and sanctions shall be established by law in order to prevent those persons who, pursuant to this Article may not engage in retail trade, from doing so through interposed persons or in any fraudulent manner.

Article 294

As wholesale trade is understood trade which is not covered by the preceding Article, and may be engaged in by any person, natural or juridical.

When it is necessary to protect wholesale trade operated by Panamanians, the exercise of such trade by foreigners may be restricted by law. In no case shall this restriction affect the foreigners who, at the time the pertinent provisions enter into effect, are engaged legally in wholesale trade.

Article 295

Any combinations, contract or action which tends to restrict or prevent free trade and competition, and which has the effect of a monopoly to the detriment of the public, is prohibited in Commerce and Industry.

In this practice is included the operation by a single natural or juridical person of a series or chains of mercantile retail establishments in a manner that ruins or tends to eliminate the competition of small merchants or industrialists.

Any person may file a public action before the courts in order to oppose any combination, contract or action, the object of which is to establish monopolistic practices. This matter shall be regulated by law.

Article 296

Hunting, fishing and exploitation of forests shall be regulated by law, with special care in protecting and conserving the fauna and flora of the country.