Payments

1. Requirements that must fulfill the clearance certificates (income tax and social security contributions) submitted along with the supplier’s invoice:

• The name of the contractor described in the clearance certificates must meet the same name described in the invoice and the purchase order or contract.
• The Panamanian tax identification number (RUC) and check digit (DV) described in the certificates must meet the same RUC and DV described in the supplier’s invoice.

2. Procedure for submission of clearance certificates

• The contractor must submit the originals and a copy of both certificates along with the invoice. The certificates must be in effect at the moment the invoice is submitted.
• The original certificates will be returned to the contractor once they are matched with the copies

The Panama Canal Authority shall make a payment within thirty (30) calendar days after the submission of a complete invoice and delivery of the object of the contract or purchase order.

Calculation of the thirty (30) day-period will begin the day after the latest of these dates:

1. Date in which the proper invoice (along with the clearance certificates and any other document required by the Authority) is actually received by the designated billing office.
2. Date in which the office designated in the contract or purchase order as “Ship To” actually receives the goods or services object of the contract.
3. Date in which the office designated in the contract or purchase order as “Ship To” actually accepts the goods or services object of the contract, when the contract or purchase order includes an inspection and acceptance clause.

* When a purchase order or contract includes an inspection clause, such clause must specify the number of days required for the inspection of the goods. The days established for the inspection will not be taken into account within the 30-day period to calculate the due date for payment. In those cases, the acceptance date shall constitute the goods delivery valid date.

The 30-day period shall be reduced if the contractor offers to the Authority a prompt payment discount.

Examples of payment due date calculations:

First example: Goods were received in the latter date.

Invoice and other documents received date
5-JAN-2004
Goods received date
8-JAN-2004
Payment due date
7-FEB-2004
Second example: Invoice and additional documents were received in the latter date.

Goods received date
15-JAN-2004
Invoice and other documents received date
20-JAN-2004
Payment due date
19-FEB-2004
Delays in the payment attributable to the Authority

When a delay occurs in the payment process attributable to the Authority, interest estimated shall be recognized and paid automatically for the delay period at the LIBOR rate at three (3) months, valid at the beginning of each quarter.

The Authority shall accept a request from a contractor for assigning payments due or to become due under a contract to a financial or governmental institution. A payments assignment contract must fulfill the following requirements:

• Must be for the total amount of the contract or purchase order. The Authority shall not accept payment assignments for individual invoices.
• Assignments must be directed to only one institution.

The payment assignment contract must be submitted with the following documents:

• A written notice to the Contracting Officer, signed by the authorized representative of the assignor, requesting the payment assignment.
• Authorization of the assignor Board of Directors to carry out the payment assignment contract.
• Public Registration Certificates of the assignor and assignee (or equivalent in case of foreign companies)
• Authorization of the insurance company or any other entity guarantor of the contract.
• Copy of the personal identification documents of the assignor and assignee legal representatives. If any of these individuals were not resident of the Republic of Panama, the personal identification documents submitted must be acceptable to the parties.
• Valid clearance certificates issued by the Ministry of Economics and Finance, (Internal Revenue Directory) as well as by the Social Security Institution, for assignees and assignors domiciled in the Republic of Panama.

The payments assignment contract must:

• Make reference to the contract or purchase order whose payments are being assigned to a third party.
• Include a statement indicating that the payments assignment contract is for all payments due or to become due under a purchase order or contract.
• Indicate that all parties (assignor and assignee) release the Authority of any liability resulting from the execution of such payment assignment contract.
• Upon acceptance of the payment assignment by the Authority, the contractor must write the following wording on each invoice submitted for payment:

“Invoice corresponds to a contract with a payment assignment”

The Authority shall make a payment within thirty (30) calendar days after the contractor submits a complete invoice along with any required documents and delivers the goods or services, object of the contract or purchase order.

To reduce the 30-day period to make a payment, the Authority accepts the offering of prompt payment discounts. Discounts will be taken whenever they are proven to be economically beneficial for the Authority.

A prompt payment discount may be offered before, during or after a supplier invoice is submitted. Furthermore, discounts may be offered for a single invoice or for all invoices submitted to the Authority by the contractor. In doing so, the contractor must send, by fax, a written notice offering the prompt payment discount. See an example of the notice.

Calculation of a discount payment date:

To calculate a discount payment date the following parameters have to be taken into consideration:

The latest of the dates established by the Authority for processing the payment. Refer to Payment Terms.
The discount offered.
Examples of discount payment date calculations:

Discount Offered: 2% in 15 days, net 30.

First example: Goods were received in the latter date.

Invoice and other documents received date
5-JAN-2004
Goods received date
8-JAN-2004
Discount payment date (2% in 15 days)
23-JAN-2004
Payment due date
7-FEB-2004
Second example: Invoice and additional documents were received in the latter date.

Goods received date
15-JAN-2004
Invoice and other documents received date
20-JAN-2004
Discount payment date (2% in 15 days)
4-FEB-2004
Payment due date
19-FEB-2004
Important notice: The acceptance of a discount does not exempt the contractor from complying with the Invoice Requirements and the Payment Terms.

For additional information feel free to contact the Accounts Payable Unit, Accounting Division, at 272-4300, 272-4306 or 272-4316.