Country Reports on Terrorism 2011 - Panama

Overview: The most direct terrorism threat to Panama was the persistent presence of a small unit of the Revolutionary Armed Forces of Colombia (FARC), which used the remote Darien Region as a safe haven. Through the annual PANAMAX exercise, a multinational security training exercise tailored to the defense of the canal, and the exemplary stewardship of the Panama Canal Authority, the Panama Canal remained secure. The Panamanian National Frontier Service (SENAFRONT) undertook several operations against the FARC. Panama took additional steps to cooperate with Colombia and Costa Rica to secure its borders.

Legislation and Law Enforcement: The Government of Panama continued its efforts to exercise its sovereignty in the Darien through more aggressive patrolling by security forces. In January, SENAFRONT raided a FARC camp that contained explosives material as well as radios and other militarily useful items. In October, SENAFRONT captured two Colombian FARC members near the village of Matucanti, one after an exchange of fire with eight suspected FARC guerillas. Another operation in late October destroyed a guerilla camp near the town of Alto Tuira, 18 kilometers from the Colombian border. On December 13, another clash occurred in the same area after SENAFRONT discovered hideaways of food and supplies in the area.

In the fall, U.S. Customs and Border Protection installed elements of the Advance Passenger Information System at Tocumen Airport to collect data to target potentially dangerous and criminal passengers on all flights in and out of Panama. The system was operating on a limited basis at year's end. Mobile security teams at the airport supported by the United States seized numerous illicit bulk cash transfers.

Panama continued its participation in the Container Security Initiative at Balboa and Manzanillo, and the Evergreen Colon Container Terminal, and also continued to participate in the Department of State's Antiterrorism Assistance program. The U.S. Southern Command-sponsored Combating Terrorism Fellowship Program has supplemented instructional training and professional development with Mobile Training Teams and conferences.

Panama also took steps to improve security on the Costa Rican border. In October, Panama inaugurated a new border checkpoint station at San Isidrio and has remodeled several of its SENAFRONT outpost stations on the Costa Rican border.

Countering Terrorist Finance: Panama is a member of the Financial Action Task Force of South America against Money Laundering, a Financial Action Task Force-style regional body. Panama had an adequate legal and regulatory framework for countering terrorist finance. One issue in the regulatory framework, the existence of bearer share corporations, was partially addressed through the passage of legislation (Law 2 of 2011) requiring lawyers to know their clients, conduct due diligence on the beneficial ownership of corporations they establish, and share that information with the authorities upon request. Uneven enforcement of the existing anti-money laundering and terrorist finance controls, however, coupled with the weak judicial system, remained a problem. Moreover, the Colon Free Zone, the second largest free zone in the world, is viewed as particularly vulnerable to abuse for illicit finance. In addition to passage of Law 2, the Government of Panama took steps to continue to improve the legislative framework governing financial sector transparency by negotiating and signing 13 Double Taxation Treaties with Organization of Economic Cooperation and Development (OECD) members, and ratifying the Tax Information Exchange Agreement with the United States, thus achieving removal from the OECD's gray list of tax havens. The Government of Panama cooperated fully in searching for assets of persons and entities on the UN terrorist finance lists.

For further information on money laundering and financial crimes, we refer you to the 2011 International Narcotics Control Strategy Report (INCSR), Volume 2, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

Regional and International Cooperation: The United States and Panama continued to plan for incidents that could potentially shut down transit through the Panama Canal. In August, Panama co-hosted the annual PANAMAX exercise, a multinational security training exercise initiated in 2003 that focuses on canal security. The exercise replicated real-world threats and included specific exercises designed to counter terrorist attacks. Several U.S. government agencies as well as 17 partner nations participated in the exercise.

Panama participates in United Nations and regional security initiatives, such as the Organization of American States' Inter-American Committee Against Terrorism. Panama has a well-established border commission with Colombia that has been energized since the election of President Martinelli in 2009. On September 9, 2011, Panama and Costa Rica signed an agreement to create a Costa Rica-Panama Binational Border Security Commission (Combifront Panama-Costa Rica) to improve cooperation at the strategic, operational, and tactical levels. In June, Minister of Security Jose Raul Mulino met with his Mexican counterparts to discuss forming a similar binational commission.

Countering Radicalization and Violent Extremism: The United States and Panama worked together to create opportunities for the residents of the Darien region to deter local recruitment by the FARC. Local youth received vocational and technical training to better prepare them to find jobs or start their own businesses, while indigenous entrepreneurs obtained assistance to improve marketing of their crafts. Community facilities have been constructed along with sports fields to give members of the community places to meet and come together.