2005-2006 INTERNATIONAL NARCOTICS CONTROL STRATEGY

UNCLAS SECTION 01 OF 04 PANAMA 002375

SIPDIS

DEPT FOR INL/LP AND WHA/CEN
JUSTICE FOR OIA, AFMLS, AND NDDS
TREASURY FOR FINCEN
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL

E.O. 12958: N/A
TAGS: SNAR PM NAS
SUBJECT: 2005-2006 INTERNATIONAL NARCOTICS CONTROL STRATEGY
REPORT (INCSR)FOR PANAMA: PART I, DRUGS AND CHEMICAL CONTROL
DIVERSION CONTROL

REF: State 209560
Panama

I. Summary
By virtue of its geographic position and well-developed
transportation infrastructure, Panama is a major transshipment
point for narcotics from the Andean Region to the United States
and Europe. Cooperation between United States and Panamanian law
enforcement agencies to stem this flow of narcotics, illegal
firearms, and money, is excellent. The Torrijos Administration
has built upon its predecessor's policies of close cooperation
with the United States and its other neighbors on security and
law enforcement issues. Panama's law enforcement agencies are
being restructured to enhance their ability to fulfill their
respective missions. Assistance provided by the United States
remains crucial to ensuring effective Panamanian law enforcement.
Panama is a party to the 1988 United Nations drug convention.
II. Status of Country
Panama's geographic proximity to the Andean cocaine- and heroin-
producing regions makes it an important transshipment point for
narcotics destined for the United States. Although security in
the Darien region bordering Colombia has improved in recent
years, smuggling of weapons and drugs between the two countries
continues. Over the last year, Panamanian authorities have paid
increased attention to security along Panama's border with Costa
Rica. Panama is also a major drug-transit hub due to its
containerized seaports, the Pan-American Highway, an
international hub airport, numerous uncontrolled airfields, and
vast unguarded coastlines on both the Atlantic and Pacific
oceans. The steady flow of cheap illicit drugs has taken a toll
on Panamanian society by increasing domestic drug abuse,
particularly among young people. The lucrative drug trade has
also contributed to pervasive public corruption and has
undermined the GOP's criminal justice system. Panama is not a
significant producer of drugs or precursor chemicals, however,
cannabis is cultivated for local consumption, primarily within
the Pearl Islands in the Gulf of Panama.
III. Country Actions Against Drugs in 2005
Policy Initiatives. Since taking office in September 2004, the
Torrijos Administration has adopted a broad policy of enhanced
inter-agency coordination related to narcotics interdiction and
related law enforcement activities. This "integrated security"
policy has led the government to look at ways of restructuring
the security forces in order to enhance their effectiveness in
countering narcotics trafficking and other transnational crime.
Accomplishments. Culminating a process begun in 2001, Panama's
model chemical control legislation was approved in April 2005
(see below). Panama was an active participant in the Central
American "IDEC" and participated in the DEA-organized "Operation
Contralado" between August and October 2005. In the most
significant operation of the year, Panama's National Police
seized four tons of cocaine in September 2005 from an area along
the Atlantic Coast.
Law Enforcement Efforts. USG law enforcement agencies enjoy a
healthy and cooperative relationship with GOP counterparts in
every aspect of narcotics-related criminal matters. DEA-
monitored statistics through mid November 2005 indicate seizures
of 10,284.5 kilograms of cocaine, 37.6 kilograms of heroin,
9,547.9 kilograms of cannabis $10,316,148 in currency seizures,
and 259 arrests for international drug-related offenses. Heroin
seizures declined slightly since last year, while MDMA tablets
and amphetamines were last seized in 2003, and Pseudoephedrine in

2004. Seizures of cocaine, cannabis and currency have risen
considerably over the past year. International drug-related
arrests have increased slightly since last year. As in recent
years, many narcotics operations are intelligence-driven
movements and are usually cooperative ventures between the GOP
and the USG.
The Public Ministry's Drug Prosecutor's Office (DPO) remains a
respected entity for combating narcotics-related crimes and a
principal coordinator of Panama's Public Forces' counternarcotics
investigative resources. DPO cooperation with U.S. law
enforcement agencies is excellent and extensive. The PNP's
Directorate of Information and Intelligence (DIIP) and its Anti-
Drug Sub-Directorate (DAD) are effective drug investigative
units.
The NAS-funded and DEA-supported Public Ministry/PTJ sensitive
investigative unit, with authority to conduct investigations
relative to major drug and money laundering organizations,
continues to grow and regularly carries out operations. The PNP
Mobile Inspection Unit and Paso Canoas Interdiction Enhancements,
the International Airport Drug Task Force, and the Canine Unit
continue to operate with USG support and have fielded major
arrests and seizures.
The National Maritime Service (SMN) enjoys good relationships
with USG counterparts. The SMN responds to USG requests for
boarding and interdictions, assisting the U.S. Coast Guard (USCG)
with verifying ship registry data, and transferring prisoners and
evidence to Panama for air transport to the United States.
Despite the SMN's successes and cooperation, operations are
threatened by a lack of resources, particularly fuel. There is
concern that without USG assistance the SMN operational status
may erode significantly. The SMN and National Air Service (SAN)
have positive relations and annually team together to eradicate
cannabis fields in the Pearl Islands.
Despite limited air assets, the National Air Service (SAN)
provides excellent support for counternarcotics operations when
their resources are available. An example was the SAN's
participation in Operation Sombra III, which was intended to
identify clandestine airstrips. Another example was the SAN's
involvement in an October 2005 seizure of 1880 KG of Cocaine 25
miles north of Porvenir, Colon. The SAN unit involved utilized
warning and disabling shots to immobilize the suspect go-fast
pending the arrival of maritime forces. The SAN continues to
respond to U.S. law enforcement requests to over-fly and
photograph suspect areas and to identify suspect aircraft in
flight or on the ground. The SAN provides logistical support in
the transfer of detainees and drug evidence through Panama to
U.S. jurisdiction.
The SAN-SMN relationship continues to grow in a positive
direction. The Government is currently exploring the possibility
of merging the two forces into a "Coast Guard." The PNP are
also in the process of developing a specialized border force.
Overall, Panama's Public Forces will receive modest budgetary
increases in 2006.
Cultivation and Production. Joint DEA-SAN aerial reconnaissance
efforts indicate small-scale coca cultivation. There have been
no confirmed reports of cocaine laboratories in Panama since 1993-

94. GOP resource constraints, triple-canopy jungle, and the
presence of heavily armed Colombian insurgents in the region have
prevented crop eradication. Limited cannabis cultivation,
principally for domestic consumption, exists in Panama,
particularly in the Pearl Islands. The SMN, SAN, and PNP
cooperate effectively to eradicate these crops.
Precursor Chemicals. Panama is not a significant producer or
consumer of chemicals used in processing illegal drugs. However,
it is believed that a significant volume of chemicals transits
the Colon Free Zone for other countries. Legislation to
strengthen Panama's chemical control regime was approved by the
National Assembly and signed by President Torrijos in April 2005.
The last known seizure of pseudoephedrine in January 2004 totaled
3,006,430 tablets. With the new precursor chemical control
legislation in place, focus has shifted towards capacity building
to assist in implementation of the new laws.
Drug Flow/Transit. Panama remains an integral territory for the
transit and distribution of South American cocaine, heroin, and
Ecstasy. These drugs are moved in a variety of modes: traffickers
primarily use fishing vessels, cargo ships, small aircraft, and
go-fast boats. These vehicles often refuel or exchange goods in
or near Panama. Goods exchanged from sea borne mediums to land
are loaded onto trucks for a northbound journey via the Pan-
American Highway or placed in sea-freight containers near the
Panama Canal for transport on cargo vessels. Illegal airplanes
utilize hundreds of abandoned or unmonitored legal airstrips for
refueling, pickups, and deliveries. Couriers transiting Panama by
commercial air flights continued to move cocaine, as well as
heroin, to the United States and Europe during 2005. European
law enforcement agencies have detected an increase in cocaine
trafficking via direct flights from Panama City to Madrid.
Domestic Programs (Demand Reduction). CONAPRED's five-year
counternarcotics strategy identifies 29 demand reduction, drug
education, and drug treatment projects to be funded between 2002
and 2007 at a cost of U.S. $6.5 million. In 2005,CONAPRED funded
seven demand reduction projects with a total cost of $924,700
(Somos Triunfadores with MEDUC and First lady Office $475,000,
MIDES Anti-Drug and Violence projects $29,500, Treatment projects
with Centro Juvenil Vicentino CEJUVI $30,500, Instituto de Salud
Mental $30,000, Cruz Blanca $59,700, Hogares Crea $250,000,
Centro Nueva Vida $50,000). CONAPRED also funded law enforcement
projects with the Drug Prosecutors' Office (Kuna Yala , Darien)
$734,560, SMN $452,273 and training for the JICC $49,890. The
Ministry of Education and CONAPRED-supported by U.S.
funding-promoted demand reduction through training for teachers
and information programs. NAS is assisting with the
implementation of an August 2003 law that created a national drug
prevention education program, which mandates inclusion of drug
prevention in school curriculum. CONAPRED and the Embassy's NAS
also supported the Ministry of Education's National Drug
Information Center (CENAID). The PNP Juvenile Police, with NAS
funding, implemented the DARE Program in Panama City public
schools.
Corruption. Corruption emerged as one of the primary issues in
the 2004 Presidential campaign. As a result of the public's
opinion on corruption, President Martin Torrijos ran a campaign
based on purging corruption from the government. The new
administration made several strides towards accomplishing this
goal since taking office in September 2004, including auditing
government accounts, and launching investigations into major
public corruption cases. Panama's national anticorruption
commission is charged with coordinating the government's
anticorruption activities. With USAID assistance, the anti-
corruption commission developed a strategic plan in 2005. A NAS-
funded "Culture of Lawfulness" program is also being developed
with the Ministry of Education, the National Police, and PTJ.
In 2005, the head of the PTJ anti-narcotics unit was arrested and
charged with involvement in narcotics trafficking.
Agreements and Treaties. Panama is a party to the 1988 UN Drug
Convention, the 1961 UN Single Convention on Narcotics Drugs, as
amended by the 1982 Protocol, and the 1971 UN Convention on
Psychotropic Substances. A mutual legal assistance treaty and an
extradition treaty are in force between the United States and
Panama, although the Panamanian constitution does not permit
extradition of Panamanian nationals. A Customs Mutual Assistance
Agreement and a stolen vehicles treaty are also in force. In
2002, a comprehensive maritime interdiction agreement between the
USG and GOP entered into force. Panama has bilateral agreements
on drug trafficking with the United Kingdom, Colombia, Mexico,
Cuba, and Peru. Panama is a party to the UN Convention Against
Transnational Organized Crime and its three protocols, and is a
signatory to the UN Convention Against Corruption. Panama is a
member of the Organization of American States and is a party to
the Inter-American Convention on Mutual Assistance in Criminal
Matters and the Inter-American Convention Against Corruption.
IV. U.S. Policy Initiatives and Programs
Policy Initiatives. The United States provided crucial equipment,
training, and information to enhance the performance of GOP
counternarcotics, public force, and law enforcement institutions
in 2005. These U.S.-supported programs are aimed at improving
Panama's ability to intercept, investigate, and prosecute illegal
drug trafficking and other transnational crimes; strengthening
Panama's judicial system; assisting Panama to implement domestic
demand reduction programs; encouraging the enactment and
implementation of effective laws governing precursor chemicals
and corruption; improving Panama's border security; and ensuring
strict enforcement of existing Panamanian laws.
NAS is implementing a law enforcement modernization project that
has the goal of professionalizing the Panamanian National Police.
The key pillars of the project involve implementing community
policing in Panama, expanding existing crime analysis technology
and promoting managerial change to allow greater autonomy and
accountability to develop best practices among local police
commanders.
Years of support to the SMN, including donations of equipment and
regular USCG training contributed to the 2005 SMN successes. The
SMN accounted for approximately 18 percent of Panama's total
cocaine seizures last year. Aside from equipment for the 180-foot
SMN ship, NAS also continued refurbishing "go fast" boats for the
SMN.
The United States has provided Panamanian Customs with training,
operational tools, and a canine program that has become a
linchpin of the Tocumen International Airport Drug Interdiction
Law Enforcement Team. During 2005, the canine program was
dramatically expanded, allowing it to operate outside the
confines of the airport.
In 2005 the USG, through the NAS and DHS/ICE, assisted the GOP in
upgrading the Public Ministry's Anti-Corruption prosecutor's
office. NAS supplied training, computers, office equipment, and
other necessary gear.
Bilateral Cooperation. The Torrijos Administration continues to
maintain close cooperation with the U.S. by sustaining joint
counternarcotics efforts with the DEA and by strengthening
national law enforcement institutions. DEA Administrator Karen
Tandy visited Panama in June 2005, and FBI Director Robert
Mueller visited in October. The maritime interdiction
agreement has facilitated enhanced cooperation in maritime
interdiction efforts, with Panama playing a vital role in
facilitating the transfer of prisoners and evidence to the United
States.
The Road Ahead. The GOP continues to demonstrate its commitment
to build strong law enforcement institutions and deter the flow
of narcotics northward. The U.S. will continue to encourage
Panama to devote sufficient resources to enable its forces to
patrol fully the land borders, the Panamanian coastline, and the
adjacent sea-lanes, rendering them inhospitable to illicit arms
and narcotics traffic. The U.S. is encouraging the development of
a risk assessment group within Customs, which should begin
operation in 2005.
The USG will continue to work with the GOP to help strengthen
Panama's ability to deter trafficking in drugs by providing
training and equipment. The United States will also continue to
work with the GOP to help strengthen Panama's law enforcement and
public forces institutional capacity and will provide assistance
to Panama to support criminal justice reform, as well as
anticrime and anticorruption efforts.
EATON