Bill 413, introduced on July 2, 2025, by Deputy Ernesto Cedeño Alvarado of circuit 8-4, was the first legislative initiative in Panama that sought to establish a comprehensive regulatory framework for the development, deployment and use of artificial intelligence. Adopted for consideration by the Education, Culture and Sports Committee on September 24, 2025 — after being reassigned from the Government Committee — the bill was sent on October 1 to a subcommittee made up of Deputies Jorge Bloise, Graciela Hernández and Miguel Campos. It returned from review on January 21, 2026. On April 15, 2026, the committee rejected it; six days later, it was presented to the plenary but failed to secure the votes needed to move forward.

Article 1 of the bill set out its purpose as regulating the development, deployment and use of artificial intelligence in Panama in accordance with the principles of the Constitution and the international treaties signed by the country, with protections centered on dignity, human rights and personal well-being. Article 7 classified artificial intelligence systems under four levels of risk: unacceptable, high, limited and none. Unacceptable-risk systems — including real-time biometric surveillance, social scoring, emotion recognition and influence over electoral processes — were expressly prohibited under Article 15.

Article 11 established the requirement for users' informed, free and voluntary consent before assuming any risk that an artificial intelligence system could pose to their fundamental rights or to the processing of their personal data. Article 12 required those responsible for using these systems to inform data subjects that they were interacting with an artificial intelligence system. Article 20 required prior impact assessments for high-risk systems. Article 29 assigned algorithm audits to the Superintendency of Industry and Commerce, while Article 32 designated SENACYT as the regulatory body with technical and operational autonomy.

Article 14 included a novel labor provision: institutions that eliminated jobs because of automation through artificial intelligence were required to relocate the affected worker to a position with equal or better conditions for a minimum period of six months, after which current labor legislation would apply. Article 16 clarified that legal liability for harm caused by an artificial intelligence system does not rest with the algorithms, but with the public or private institutions that develop them and the entities that contract them.

The bill's rejection leaves a broad regulatory vacuum. Panama currently has no rules on algorithmic transparency in the financial sector, on the use of artificial intelligence in judicial or credit decisions, or on the protection of personal data when it is used to train automated models. Article 28 of the bill sought to apply sector-specific guidelines to health, finance, transportation, education, justice and public administration. Without that coverage, financial and government entities that adopt artificial intelligence tools operate in an environment in which no statute defines their obligations or the rights of citizens affected by their algorithmic decisions.