Bulletin No. 16 - Free Competition

Edition Nº 16
May, 2018












































BULLETIN





Free Competition

PANAMA











Of Our Contributors 2
Dawn Raid

Present 3
Judgement in favor of ACODECO

Project 6 Defending your freedom to compete

Diffusion on Validation of Increases
in Costs in Housing Fairs

In Numbers 7
Price Monitoring: Construction Materials

BULLETIN
Free Competition Dawn Raid
PANAMA


By: Joancy Chávez
Head of the Research Department of the Competition









The National Directorate of Free Competition (DNLC, acronym in Spanish) in accordance
with the provisions of Article 98, numeral 3 of Law 45 of October 31, 2007 (hereafter, Law
45) has the function of requesting the jurisdictional agencies to adopt precautionary
measures, the assurance of evidence and raids within the administrative investigations.


In this sense, the regulations allow evidentiary proceedings to be carried out by the
competition authority, that is, once the judicial authorization has been obtained, it is the
institution that, through the technical team made up of lawyers and economists, proceeds
with the examinations of private documents of the investigated economic agents, as well as
the taking of declarations, searches if necessary and the accomplishment of any other
measure that is requested and approved by the judge, whenever an illegal conduct typified
in Law 45 is investigated as an absolute or relative monopolistic practice to the detriment of free competition.


The judicial order that authorizes the practice of dawn raid is confidential and only disclosed to those investigated once the technical
team of ACODECO enters the facilities of the investigated economic agent in order to preserve the effectiveness of the diligence.


The personnel of the companies must collaborate at all times and allow the entity to enter the facilities immediately, without any type
of delay, and thus avoid the acquiescence that may generate greater inconveniences in the operation of the investigated economic
agent, this It does not take away the possibility that they can be assisted by a lawyer without interrupting the normal course of
collecting documents, making statements or inspecting them.


The elements of evidence gathered in an evidentiary proceeding, as well as any incident are raised through an act that is signed by
all those involved and a copy is provided to the representative of the company. All the evidence obtained is treated confidentially and
will be kept in separate booklets by economic agents under investigation.


The economic-legal analysis of the evidence obtained will determine the interposition or not of a judicial process. That is why, for the
DNLC, the assurance of evidence through dawn raids is one of the most important tools to obtain evidence of the alleged commission
of unlawful conduct contemplated in Law 45.




















2 OF OUR CONTRIBUTORS

BULLETIN
Free Competition
PANAMA
Judgement in favor of ACODECO against
customs brokers and the Union: National LAVANDERÍA Y LAVAMÁTICO VICTOR, LAVANDERÍA
HERMANOS DE LA CRUZ, LAVANDERÍA Y LAVAMÁTICO
Union of Panama customs brokers (UNCAP) KINGWA, LAVAMÁTICO CASA FU, MINI SUPER KARINA,

SUPER Y LAVAMÁTICO LA FORTUNA, LAVANDERÍA Y
The Ninth Circuit Court of the first Judiciary Circuit of Panama, LAVAMÁTICO SAN FRANCISCO, LAVAMÁTICO Y
by decision No. 31-18 April 9, 2018 declared that the LAVANDERÍA ESTELA, LAVAMÁTICO BENITO,
defendants: The National Union of Customs Brokers of Panama, LAVAMÁTICO LAS MELLAS, LAVANDERÍA Y BUHONERÍA
(UNCAP, acronym in Spanish) and eight custom brokers have ANDY, LAVAMÁTICO JIANSI CAI, LAVAMÁTICO VICTOR,
violated article 13, paragraph 1, of the law 45 of October 31, LAVAMÁTICO Y LAVANDERÍA ORIENTE y LAVANDERÍA Y
2007 by engaging in the Commission of monopolistic practice LAVAMÁTICO MARIBEL, for a possible act of an absolute
absolute consisting of the act, combination, arrangement or monopolistic practice in the paragraph 1 of article 13 of the law
agreement in order to conclude, agree or exchange information 45 of October 31, 2007 (in later law 45), consisting in the
aimed at fixing the minimum price for customs brokerage service agreement with the objective or effect of fixing, manipulate or
in the Republic of Panama. impose prices for laundry services in cold and/or hot water and
drying of clothes in the District of La Chorrera.

The decision No. 60 on August 21, 2014, the first Civil Circuit
Court of the Third Judicial Circuit of Panama declared that the
economic agents mentioned above, breached paragraph 1 of
article 13 of the law 45. Therefore, the aforementioned decision
of the Trial Court was in turn confirmed by the appeal of that
decision, by the Third Tribunal of Superior Justice of the First
Judiciary District of Panama by decision of 8 November 2017.

Therefore, ACODECO in accordance with article 104 of the law
ACODECO, on December 18, 2014 sued as a result of a 45, through administrative resolutions sanctions the laundries a
statement of the General Assembly of the UNCAP setting the sum of two thousand dollars (USD 2, 000.00), to each laundry for
minimum fee for the payment of fees for the Custom Brokers the communion of absolute monopolistic practices to the
which was published in some newspapers of national circulation. wording of the provisions in paragraph 1 of article 13 of the
Also, because through down raid authorized by the Eighth Court, law 45.
the UNCAP and businesses of some members of the Board of
Directors, ACODECO acquired evidentiary elements that
showed the commission of the act.

This decision showed that professionals and Unions are not
excluded from the application of the law 45 of 2007.







ACODECO sanctions laundries in Chorrera


By resolution No. DNLC-OGC-010-10 on June 1, 2010, an
exofficio administrative investigation procedure was ordered to
initiate ex officio against the following laundries:




PRESENT 3

BULLETIN
Free Competition
PANAMA
ACODECO sanctions Cervecería Nacional, Dawn raid in the market of sale of light

S.A. and its subsidiaries heavy equipment


By the agreement No.
PC-517-02 of December The National Directorate of Free Competition (DNLC, in
13, 2002 an ex oficio Spanish) requests to the corresponding judicial authority, an
administrative authorization for the execution of a preliminary diligence against
investigation procedure
was ordered to initiate two economic agents who participated in the public tender by
against: CERVECERÍA agreement No. 2015-1-27-0-99-LM-00138, for the supply of
NACIONAL, S.A., vehicles, buses, trucks and heavy lightweight equipment.
brewery , S.A. (now CERVECERÍA NACIONAL HOLDING,
S.A.), and its subsidiaries, DISTRIBUIDORA COMERCIAL,
S.A. (now DISTRIBUIDORA COMERCIAL GROUP, S DE R.L.), After the judicial allocation process, the application was
REFRESCOS NACIONALES, S.A. (merged with
CERVECERÍA NACIONAL, S.A., surviving the last) , and allocated to the Ninth Circuit Court of the first Judicial Circuit of
FINANCIERA PASADENA S.A (merger with DISTRIBUIDORA the Province of Panama, who through order No. 254-18 March
COMERCIAL, S.A., to surviving the last), tending towards the 19, 2018, granted the authorization of a dawn raid to ensure
confirmation of the alleged commission of a relative
monopolistic practice established in articles 5 and 14 evidence and to prove the existence of a possible absolute
(paragraph 4) of the Law 29 of February 1, 1996 (hereinafter monopolistic practice, according to the provisions of paragraph
law 29), consisting on the raise of barriers to access in the 4 of article 13 of the law 45 of 31 October 2007.
channel of distribution of the product designated beer and
preventing the permanence and input of its only direct
competitor the brewery CERVECERÍA BARÚ PANAMA, S.A. Subsequently, the DNLC proceeded to perform an assurance of
and its subsidiaries, as well as any another future business in evidence at the headquarters of the economic agents. The
the relevant market.
DNLC is currently analyzing the information gathered during the
The old CLICAC (now ACODECO), filed a formal action on dawn raid.
March 10, 2003 against economic agents mentioned previously,
for the alleged commission of a monopolistic practice relating to
the wording of the provisions of articles 5 and 14 (paragraph 4)
of the Act 29.

The Third Tribunal of Superior Justice of the First Judiciary
District of Panama, by the Tribunal’s decision on November 30,
2017, confirms the decision No. 109-15 of 22 December 2015,
issued by the Ninth Circuit Court, of the Civil branch, of the first
Judicial Circuit of the Province of Panama, in which it declared
that the economic agents incurred in a relative monopolistic
practice.

Therefore, ACODECO, through the Resolution No. DNLC-
HCE-023-18 of May 4, 2018 comes to the imposition of an
administrative sanction with of the maximum applicable amount
of fifty thousand dollars (USD 50,000) established in article 112
of the Act 29, existing at the time of the commission of
accredited behavior. CERVECERÍA NACIONAL on May 14,
2018 filed an appeal with the administrator which was
confirmed in all its parts by this higher instance.


4 4 PRESENT

BULLETIN
Free Competition
PANAMA

Training on the importance of the Improving the Impact of Market

leniency program in Panama Studies



On 24 April this year, Panama’s Superior Institute of the This was one of the topics discussed at the sessions of the
judiciary, organized a training day on issues related to Free annual International Competition Network (ICN) Conference,
Competition and Consumer Protection aimed at judges, which took place from March 21 to 23, 2018 in New Delhi, India
lawyers and academics, with the purpose of updating them on
these topics. The session focused on issues related to market research,
which are research projects carried out to gain a deep
Mitzila Rodríguez, Lawyer of the Competition Research understanding of how sectors, markets or market practices
Department of the ACODECO participated as a speaker of the work or do not work. However, market studies can demand a lot
subject "Importance of the leniency program on the eradication of resources from the agency and can impose costs on the
of absolute monopolistic practices", where she explained that in industry players, who, for example, have to pay an outside
our country it’s called Dispensing Benefit Program or Reduction lawyer to help them with the collection of information.
of Penalties, which provides exemption or reduction of the
payment of a fine which may be up to (B/.1,000.000.00), to the It was agreed that having a standardized process to carry out
first economic agent (who is not the market leader and is not the and implement market studies can ensure that they are carried
instigator of the practice) that participate in an absolute out efficiently and transparently, and that the public resources
monopolistic practice and contribute information to the invested in them are used more effectively.
competition authority. In addition, she mentioned the
requirements, benefits, confidentiality of the program and The discussion also pointed out that the market research
expressed that it’s a tool that contributes to the detection of process may include some or all of the following steps:
cartels and eradication of absolute monopolistic practices and
lawyers may advise their clients that they are being investigated − Identify and select a market to study (on the basis of
by these practices to use this helpful tool to obtain a reduction selected parameters, such as technological advances that may
of the fine or the exemption if they provide elements of tests that affect competition, recent changes in regulations and / or
help the authority to operate the courts. changes in business behavior in a specific market, the
comments of the consumers, market studies in other countries,
etc.)


− The scope and planning of a market study (establish a
core team that will work on a market study or an authority
intends to contract work with external suppliers)


− Planning of stakeholder participation (seek input from
all stakeholders on the scope of the study and types of possible
outcomes, through ex ante consultations, help the authority to
decide the scope of the study)
















PRESENT 5 5

BULLETIN
Free Competition
PANAMA

− Collection and analysis of information (considering what This project started in January of this year and is carried out by
information is available and what is needed for the purposes of the team of lawyers and economists of the UAAC with the
the market study, considering possible sources of information, support of the Department of Education of ACODECO, which
considering the time it will take to collect and analyze has the logistics and infrastructure to provide a first-class
information, reaching the public and interested parties through service to all consumers that approach the stand of the
of public workshops, call for public comments on white papers, ACODECO in fairs.
etc.)
This year the UAAC has participated in concurrent housing fairs,
− Development and obtaining results. Important practice such as Expo-Vivienda organized by the Panamanian Chamber
for the authorities to develop any result in the context of the of Construction (CAPAC acronym in Spanish) and
purpose and findings of each market study. Expo-Inmbobiliaria, of the Panamanian Association of Real
Estate Brokers and Developers (ACOBIR, acronym in Spanish).
− Evaluation of a market study. This can help the
authorities to show that the individual studies met their
objectives in a cost-effective way and with a high monetary
value.
















Our presence in the fairs has been a positive complement to all
the work that has been done, previously, through the distribution
of informative inputs to consumers and economic agents, as
well as through active participation in various media of the
country.






Diffusion on Validation of Increases in

Costs in Housing Fairs



Since it began, the Cost Increase Analysis Unit, (hereinafter
UAAC) of The Free Competition National Directorate of
ACODECO, it was thought to get closer to consumers through
housing fairs to publicize the services offered the UAAC on
validation of increments of costs and explain the clause of cost
increment that’s generally established in the contracts of
promise of purchase of new houses in Panama.






6 6 PRESENT/PROJECT

BULLETIN
Free Competition
PANAMA
Price Monitoring: in March 2018 and these prices were Other products such as stone,
compared with those of November 2017.
Construction Materials ornamental blocks, steel nails, wire and
plywood door reflected a stabilization in
In the case of gray cement, a decrease in their prices in 4 months elapsed.
the price of the 94 pound bag of -0.52%
In Panama, the construction is a sector was observed. Likewise, the sand both in The most significant increases in this
of the economy that is constantly active the bag and in the cubic yard had a 5% period, which exceeded 15%, occurred
due to the large number of works that are decrease in the same period analyzed. in steel bars in 30 'sections of different
carried out at the macro level, as well as sizes, as can be seen in the following
those works carried out by citizens either table.
in a new house or in annexes and / or
improvements to existing ones. For the
above, and in order to disclose price
information to consumers, ACODECO
periodically monitors prices of AUTORIDAD DE PROTECCIÓN AL CONSUMIDOR Y DEFENSA DE LA COMPETENCIA
Departamento de Información de Precios y Verificación
construction materials in different sectors PRICE OF SALE TO THE PUBLIC OF SOME CONSTRUCTION MATERIALS,
of the capital city so that consumers can OBTAINED IN VARIOUS COMMERCIAL ESTABLISHMENTS IN THE SECTOR OF
compare prices between different BETHANIA AND SAN MIGUELITO, IN THE CITY OF PANAMA: MARCH 2018
economic agents that are dedicated to Price Range Variation
the sale of construction materials, and in Average
passing they serve as a basis to Product Sale Unit B/. %
establish a budget when deciding to start mar-18 nov-17
the construction work.
Gray Cement ARGOS Bag of 94 Lbs. 9.58 9.63 -0.05 -0.52
Loose Gray Cement Pound 0.27 0.27 0.00 0.00
4.65
0.02
Among the main products that are Loose White Cement Pound 0.45 0.43 -0.05 -5.21
0.96
Bag
0.91
monitored in the price monitoring of Sand Cubic Yard 43.98 46.65 -2.67 -5.72
construction materials are: gray cement, Stone No. 4 Bag 0.83 0.83 0.00 0.00
white cement, sand, stone, blocks, steel Cubic Yard 40.42 40.48 -0.06 -0.15
Bag
1.07
1.03
bars, wire, base coat, nails, etc. Base Layer Cubic Yard 50.15 51.73 -0.04 -3.74
-3.05
-1.58
Block No. 4 Each unit 0.78 0.82 -0.04 -4.88
Block No. 6 Each Unit 0.94 0.92 0.02 2.17
The most recent monitoring, which is Ornamental Block Each unit 1.03 1.03 0.00 0.00
available on the ACODECO website Double wash tube Each unit 34.06 32.96 1.10 3.34
(www.acodeco.gob.pa), was carried out Single wash tube Each unit 22.40 20.10 2.30 11.44
Screw No. 2 for zinc Each unit 0.07 0.07 0.00 0.00
Wire nails No. 2, 3, 4 Pound 0.93 0.88 0.05 5.68
Steel nails No. 2, 3, 4 Pound 1.26 1.26 0.00 0.00
Steel bars Section of 20' 1.43 1.47 -0.04 -2.72
Steel bars (corrugada) Section of 30' 4.77 4.12 0.65 15.78
Steel bars (deformada) Section of 30' 8.21 7.06 1.15 16.29
Steel bars (corrugada) Section of 30' 13.25 11.30 1.95 17.26
Wire Pound 0.75 0.75 0.00 0.00
Pywood doors 2 x 7 Each unit 25.97 25.97 0.00 0.00
Plywood doors 3 x 7 Each unit 28.33 28.33 0.00 0.00
FUENTE: ACODECO
Miembro de CONCADECO (Consejo Centroamericano de Protección al Consumidor)








IN NUMBERS 7 7

BULLETIN
Free Competition
PANAMA








Panama Free Competition Bulletin reaches its edition # 16




















The National Directorate of Free Competition of the ACODECO releases every two months from September
2015 to date through the National Free Competition Bulletin of Panama, the achievements, recent goals,
investigations, presented demands, competition law, seminars between many other management activities.


The objective of this newsletter has been to promote and publicize both national and international actions in
defense of competition in Panama, as highlighted in its slogan, "Defending your Freedom to Compete".


On the other hand, an important aspect to highlight is that the editing and writing team of the articles published
in this bulletin are lawyers and economists who are actively working day by day within the Directorate.



We thank you in advance to be part of our readers.