Panama's data protection law extends its applicability to entities offering goods and services to data subjects in Panama through electronic means, specifically targeting the Panamanian market.

Text of Relevant Provisions

Executive Order 285/2021 Art.2(4):

"Law 81 of 2019 and this decree will be applicable when: The data processing carried out in the context of a commercial activity - by Internet or any other means of electronic or digital communication, in accordance with Law 51 of 2008, to guarantee the protection of personal data in activities aimed at the Panamanian market."

Analysis of Provisions

The provision in Executive Order 285/2021 Art.2(4) establishes that Panama's data protection law applies to data processing activities conducted in a commercial context through electronic or digital means when these activities are "aimed at the Panamanian market". This factor extends the law's applicability beyond Panama's borders, capturing foreign entities that target Panamanian consumers.

The key elements of this provision are:

1. "data processing carried out in the context of a commercial activity" - This limits the scope to business-related data processing, excluding non-commercial activities.
2. "by Internet or any other means of electronic or digital communication" - The provision specifically targets online and digital activities, recognizing the prevalence of e-commerce and digital services.
3. "in accordance with Law 51 of 2008" - This reference to another law suggests that there may be additional requirements or definitions related to electronic commerce that businesses need to consider.
4. "activities aimed at the Panamanian market" - This is the crucial element that determines whether a foreign entity falls under the law's jurisdiction. It implies that the business must be actively targeting or marketing to Panamanian consumers.

The rationale behind including this factor is to protect Panamanian data subjects when they engage with foreign businesses online. It ensures that companies benefiting from the Panamanian market are held to the same data protection standards as local entities, regardless of where they are physically located.

Implications

This provision has significant implications for businesses operating online:

1. Foreign companies targeting Panama: Any company outside of Panama that offers goods or services to Panamanian consumers through websites or digital platforms must comply with Panama's data protection law.
2. Market targeting assessment: Businesses will need to evaluate whether their activities are "aimed at the Panamanian market." This could include factors such as:
   • Using the Spanish language or Panamanian dialect
   • Offering products or services in Panamanian currency
   • Having a .pa domain or mentioning Panama in marketing materials
   • Tailoring content or offers specifically for Panamanian consumers
3. E-commerce focus: The provision's emphasis on electronic and digital communication means that online retailers, digital service providers, and app developers are particularly affected.
4. Compliance requirements: Companies falling under this provision will need to ensure they meet all requirements of Panama's data protection law, including data subject rights, security measures, and potentially appointing a local representative.
5. Cross-border data transfers: Businesses processing Panamanian consumer data outside of Panama will need to ensure they have appropriate mechanisms in place for lawful cross-border data transfers.
6. Potential extraterritorial enforcement: Panama may attempt to enforce its data protection law against foreign entities that violate these provisions, which could lead to legal challenges or the need for international cooperation in enforcement.