Panama has launched a major legal offensive against digital criminals with a new law that compels private companies to fortify their cybersecurity defenses. Law 478 of 2025, which took effect in late 2024, represents the most significant overhaul of the nation’s digital crime framework in years. The legislation imposes stricter penalties for cyber offenses and introduces unprecedented obligations for businesses to preserve digital evidence and collaborate with authorities.
The updated legal framework specifically escalates punishments for attacks targeting critical infrastructure sectors. Financial institutions, healthcare providers, energy distributors, and telecommunications firms now face heightened legal consequences when cyberattacks compromise their operations. This strategic focus on vital services underscores the government’s intent to shield the country’s economic and social pillars from digital threats.
“This law represents the most profound change in digital matters since the approval of Law 81 of 2019 on the Protection of Personal Data,” said Francisco Javier Vanegas, a senior lawyer at EY Law. [Translated from Spanish] Vanegas warned that the legislation presents an unprecedented compliance challenge for both local and multinational companies operating within Panama.
Corporate legal departments are now scrambling to interpret the new mandates. The law expressly penalizes digital identity theft, interference with computer systems, and the unauthorized disclosure of sensitive information. These provisions force organizations to conduct comprehensive reviews of their system usage policies, identity management protocols, and digital traceability measures. Legal experts confirm that negligence in these areas could now lead to significant corporate liability.
Regional Cybersecurity Investment Trends
Panama’s legislative shift aligns with a broader regional trend of escalating digital defense spending. According to the EY Global Cybersecurity Leadership Insights Study, Latin American organizations invested between $10 million and $49 million in strengthening their systems between 2023 and 2024. Approximately half of all companies in the region increased their cybersecurity budgets to counter increasingly sophisticated threats.
The financial motivation for this investment is clear. A separate report by the Boston Consulting Group titled “When Cybersecurity Becomes Cyber Strategy” calculated the average cost of repairing a cybersecurity breach at $52 million. Companies typically require 258 days to fully contain a serious digital intrusion. The financial, healthcare, and telecommunications sectors remain the most vulnerable targets for these costly incidents, a reality that explains their special designation under Panama’s new statute.
This regional context shows why when cyberattacks occur, the consequences now extend far beyond immediate financial loss. National security and economic stability are increasingly at stake.
The Spyware Epidemic in Latin America
The new law addresses a rapidly evolving landscape of digital threats, particularly the proliferation of malicious software designed for economic gain. Security researchers identify spyware as a dominant threat vector currently plaguing the region. This software secretly collects information and records user activity, with stolen data often sold on digital black markets or used directly for fraud.
“Spyware secretly collects information and records user activity. This information is then sold or used for fraud,” explained Fabiana Ramírez C., a security researcher at ESET Latin America. [Translated from Spanish]
Recent data from ESET paints a stark picture of the regional spyware map. Banking trojans overwhelmingly dominate the threat landscape. The Spy.Banker family alone accounts for 65.9 percent of all detections, specializing exclusively in stealing online banking credentials. The Spy.Guildma variant represents 14.4 percent of detections and focuses on establishing remote access and control of infected devices.
Spy.Agent ranks third with 9.9 percent market share, frequently used for identity theft and personal data extraction. It is followed by Spy.LummaStealer at 6.2 percent, which focuses on stealing passwords and browser cookies. The Spy.AgentTesla variant rounds out the top five with 3.6 percent prevalence, known for its ability to log keystrokes and perform corporate espionage. Together, these five variants constitute 100 percent of the top spyware detections across Latin America.
Ramírez confirmed that Panama follows similar regional trends, with Spy Banker and Spy Agent representing the majority of local detections. She did, however, acknowledge the country’s progress in establishing foundational digital security institutions like the National Cybersecurity Center and the National Cybersecurity Strategy 2021–2024. These initiatives, developed by the National Authority for Government Innovation, provide a crucial framework for coordinating public and private sector responses to cybercrime.
Expanded Corporate Responsibilities and Legal Exposure
Perhaps the most consequential aspect of Law 478 is its expansion of corporate criminal liability. The legislation introduces a new Article 338A into the Criminal Procedure Code, granting the Public Prosecutor’s Office authority to order companies to retain computer data for up to 90 days. This preservation order can be extended under certain circumstances, creating a mandatory chain of custody for potential digital evidence.
Businesses must now establish formal protocols for the preservation and secure delivery of this information to judicial authorities. These procedures must operate in accordance with the existing personal data protection law, guaranteeing confidentiality and traceability throughout the process. This integration of privacy and security mandates represents a fundamental shift in corporate governance requirements.
“Privacy and cybersecurity are now integrated. Data protection is no longer just about confidentiality: it also includes criminal compliance,” Vanegas explained. [Translated from Spanish]
Legal experts at EY Law recommend that organizations immediately focus on three critical actions. First, companies must develop robust protocols for the secure preservation and delivery of data, ensuring full traceability and rigorous validation of all judicial requests. Second, mass training of staff is essential to educate employees about newly defined digital crimes like impersonation and cyber harassment. Third, businesses need to update their privacy policies and notices to explicitly inform employees and customers that their data may be shared with judicial authorities under legal mandate.
The law fundamentally reshapes corporate leadership dynamics. While it does not mandate the creation of new formal organizational structures, it imposes direct responsibility on boards of directors and senior management. Cybersecurity can no longer remain siloed within IT departments. Active oversight by the board is now a mandatory function, as negligence could directly trigger corporate criminal liability. This elevated risk profile makes the role of the public prosecutor significantly more relevant to C-suite executives.
Vanegas suggests that companies should immediately begin developing a digital criminal risk map. They also need to establish tight coordination between the Chief Information Security Officer, the legal department, and the Data Protection Officer. This collaborative approach ensures a rapid and legally compliant response to any digital security incident, particularly those involving sophisticated spyware or data breaches. The era of treating cybersecurity as a purely technical issue has definitively ended in Panama.