Country Reports on Terrorism 2007 - Panama

The Panama Canal remained Panama's most important economic asset. An act of terrorism that would close off the Canal would severely affect the economies of Panama, the United States, and other countries that rely heavily on the Canal for commerce. The Panamanian government continued to review the structure of its Public Forces and conducted exercises to ensure its ability to protect the Canal and residents of Panama against a possible terrorist act.

Panama's highly developed commercial transport sector and shared border with Colombia made it a transshipment point for arms, drugs, and smuggling of illegal aliens. The Revolutionary Armed Forces of Colombia (FARC) continued to be active in Panama's Darien Province and although they committed no significant terrorist acts, Panama's Public Forces (PPF) closely monitored its activities. Panama created a dedicated border patrol force for both the Colombian and Costa Rican borders, and took the first steps toward creating a stand-alone border protection force with its own command and headquarters under direction of the Panamanian National Police (PNP).

Panama provided enhanced force protection for U.S. military vessels, including submarines, during "high value transits" of the Canal; U.S. officials praised Panama's level of support and security. The Ministry of Government and Justice used classroom training, tabletop exercises, and field visits to improve coordination among the PPF agencies. Panama was the sponsor and host of the annual PANAMAX exercise, a multinational civil and military forces training exercise tailored to the defense of the Panama Canal. The exercise replicated real world threats to the Canal in order to develop appropriate responses and guarantee safe passage through the waterway. Seventeen nations, including the United States, participated. On the margins of PANAMAX, Panama, for the first time, hosted a tabletop exercise specifically designed to examine its ability to address asymmetric threats.

Panama worked closely with the U.S. Department of Homeland Security to sign a Container Security Initiative agreement and to launch its activities, beginning with two operational scanners at two ports. Panamanian Public Force Counterterrorism units continued to benefit from the second year of SOUTHCOM-funded training provided by Navy Special Warfare South personnel.

In February, Panama hosted the General Assembly of the Inter-American Committee Against Terrorism (CICTE) multilateral conference. Subsequently, Panama headed this committee, whose work focused primarily on infrastructure security.

Panama is an international offshore banking center. While the government has taken extensive measures to combat money laundering in the banking system, the Colon Free Trade Zone served as a vehicle for illicit finance. Panama's Foreign Ministry, Council for Public Security and National Defense, Financial Analysis Unit, and the Superintendent of Banks were fully cooperative in reviewing terrorism finance lists.