A Sad Tale of Peter & The . . . Bank

This is an interesting story, about which there is quite a lot of conversation in Panama, and indeed throughout the world as people consider the possibility of transferring residence and assets to Panama. I don’t know anything about the details, other than those which appeared in the following story, published in Spanish in a local paper, LA ESTRELLA DE PANAMA in the Finance section earlier this week.

My own experience with HSBC has been varied. In the US both at Beverly Hills and Seattle, I have had good experiences. When I initially had trouble withdrawing from my US HSBC account in Panama, the US HSBC IT people bent over backwards to help me, unlike the Panama HSBC folks who just ran me in circles . . . I had no issues with HSBC US until they started charging me 3% to withdraw my own money!  [We will forget about the fact that after driving to David to use HSBC for two years, and having a sizeable account, that when HSBC finally opened a branch in Boquete and threw a big party at Valle Escondido, where I live, and invited everybody in Valle Escondido - whether they had an account or not - BUT me . . . and then just blamed the omission on Valle Escondido . . . And when I got pissed about being snubbed and started moving accounts to a great local bank called Banistmo, HSBC bought Banistmo! But we'll forget about all that . . . ]

Here’s the link to the LA ESTRELLA story . . . I tried a computer translation, and it was, well, a computer translation, but you could get the gist of the story. You can do your own computer translation, or if you read Spanish good for you.

The gist, as I understand it, is that Peter Gordon had a bad experience with HSBC and went on line to vent his displeasure, whereupon he cancelled his accounts, and, perhaps, although this isn’t clear to me, encouraged some others to do the same? [Panama does NOT have "freedom of speech" like in the US.] At any rate I guess HSBC didn’t like it so took action against him and while the case makes its way through the courts (way longer process in Panama than in the US), HSBC supposedly has sequestered $5 Million of Gordon’s money, some of which was in a Foundation, supposedly immune to such suits.

Anyhow, as I understand it, that’s where the case stands, and Gordon claims he now has no access to the money he has in the bank. If someone from HSBC’s PR department wishes to clarify, please do so, and I will gladly include the comment.  While they are at it the PR folks might also explain how this whole case helps HSBC, because, frankly, I don’t get it! Especially since, according to the article, “Some 24 thousand private foundations have been established in Panama and their numbers are increasing every month.”

According to LA ESTRELLA,

“The case has the potential to cause much more damage to Panama that the comments by Peter Gordon could have done to HSBC. “The laws are broad [regarding seizure of assets] in Panama,” said one foreign observer whose profession is to deal with the national economy. “This case demonstrates how easy it is to invoke them. Whatever happens, the assets have been tied up for two years. It’s a horror film to scare potential investors. “

It certainly does give potential investors and expats already in Panama pause.

And since we’ve got a business and finance blog going here . . .

I found this from My Panama Lawyer interesting . . . .

Levin – Obama Bill seeks to end confidentiality of US corporations

Panama attorneys are required by Panama “know-your-customer” laws to keep confidential files on who are the beneficiaries of the corporations, private foundations and trusts for which they provide resident agent services. However, the information can only be released to Panama prosecutors when a criminal investigation is conducted by the authorities or when assisting foreign authorities in non-civil cases.

When said KYC laws were enacted back in 1994, Panama attorneys warned the authorities that the bad guys would only head for Delaware, Nevada and Wyoming, where incorporators sell corporations online in 24 hours to anybody with a number from a stolen credit card and a mail drop to receive the corporate papers. In the end it was good for the Panama incorporation business because it served to weed out bad clients and improve the financial center.

13 years later, Senator Levin proved right this prediction by sentencing that “criminals are hiding behind U.S. corporations while committing all sorts of crimes — from terrorism to money laundering, fraud and tax evasion.”

Senators Obama, Levin and others have sponsored the “Incorporation Transparency and Law Enforcement Assistance Act” which is not making Resident Agents in the US very happy. The bill would be the equivalent of submitting shareholder records of privately-held corporations to the Public Registry.

And finally . . . Internet Woes, Yet Again

One of the biggest hassles for me when we moved to Boquete four years ago was getting reliable Internet service. The “high speed Internet service” advertised, wasn’t yet a reality in Valle Escondido. When we finally, after almost a year, did get Internet service it was from a newly minted local company called Baranca. Four, count them, four, young guys arrived to install my Internet. They had boxes of manuals, which they constantly consulted midst much discussion in Spanish. They were here about seven hours to jerry rig an antenna of sorts, and a little black box with a cord that must have been eaten off by an animal and was taped together with electricians tape. But I finally had Internet . . . sort of. It was as slow as molasses in January and was continually up and down. When we had fog, which we frequently do in the mountains, we’d lose connectivity. Then whenever it rained . . . we live in a rain forest! . . . we’d lose connectivity. Have an electrical storm . . . a regular occurance . . . and the tower on Volcan Baru would go out and someone would have to climb up to 11,400 feet to push the button to reset the transmitter or whatever. When you did have a problem, there was no one to call.

Then some friends of mine formed their own company and started shooting a signal into Valle Escondido competing with Baranca. Their service was $95 a month, $20 of which was taken by the developer, but it worked pretty regularly and by comparison was lightning fast. Some folks switched, others stayed with Branaca. Three months ago Cable came to Boquete and Valle Escondido with television and Internet so most folks switched. We didn’t because we’re moving as soon as our house in Palmira is finished.  Since most people switched to cable it didn’t make sense for my friends to continue their service, and at the end of June they pulled out, turning their customers, including me, over to Baranca.

So we’re back where we started . . . back to intermittent Internet connectivity. So, until we move . . . and heaven know what the Internet will be like there! . . . please be patient with me. I will try to keep up my blogs.  Yesterday: no Internet.  Today: 699 kbps. That is all small case.