There are instances when a foreign court tries collecting funds from an offshore jurisdiction for purposes of collecting on child support, alimony and the like.  Court judgments are limited to a specific time frame ranging from three to about 25 years depending on the country where the judgment came from and the treaties, if there are any, signed in relation to this.  When considering Panama as an offshore haven, it is important to know that Panama is generally impervious to collection rulings from foreign courts.

Existing Rules in Panama

The country of Panama enjoys the one of the tightest bank secrecy laws.  In addition, they have no treaties (except MLAT - only for serious criminal cases - not foreign civil judgements) or agreements with another country whatsoever that calls for collection of money for whatever purpose even if the collection judgment was issued by a regular court of a foreign country.

Panama offers two sought after asset protection vehicles  The first is the anonymous bearer share corporations where ownereship is purposely protected by law.  The owner of the corporation is the person holding the share certificates.  The second alternative is the Panamanian foundation owning a Panama corporation.  The names of the owners are not publicly shown on their registry and this makes it hard for collection lawyers and agents to track a debt transferred to such entities.

Law firms which offer asset recovery services understand how offshore asset protection works.  However, their services will cost a collector an arm and a leg so, in general, collection endeavors are restricted to cases involving extremely large amounts of funds and particularly valuable assets and properties.  The asset recovery process usually gains ground only if it involves some form of criminal action – for instances, cases involving extensive fraud.  If it is only civil liability involved, asset recovery in Panama is next to impossible and excessively expensive to initiate and is thus often not worth the effort.

If an individual wishes to go after a foreign civil judgment in Panama, there are several obstacles awaiting him.  For one, Panama courts will argue that they do not have any jurisdiction on the case since the ruling was not made by a Panamanian court and the case was not filed in Panama.  Second, there are several anonymous foundations and corporations in the country with anonymous owners so it will be extremely hard to point a finger to which corporation received the funding or the assets in question. When assets are donated to a Panama foundation, it is very hard to argue they should then be undonated?  Panama courts simply don't tolerate these arguements and the case is usually dismissed.

Foundations in Panama do have protectors but these are not considered owners.  Moreover, with anonymous foundations, the key persons such as protectors and beneficiaries are not publicly named.  It is impossible to tie down an anonymous corporation or anonymous foundation to a foreign case.

Validity of Legal Service

Most countries permit the use of a national postal agency to serve a person in case of a lawsuit.  As soon as the person signs receipt of the envelope, the inidividual is considered to be legally served.  Alternatively, some countries provide for legal service via newspaper publications.  In Panama, there is only one type of legal service recognized.  A public official called an authorized process server must serve the papers in person.  This makes service difficult and many cases never get anywhere because the person can not be served.

Asset protection is best done in Panama where one is free of collection from civil judgments issued by any foreign court due to ironclad privacy and banking secrecy infrastructures and the lack of foreign collection treaties.