2005 ANNUAL TERRORISM REPORT

UNCLAS SECTION 01 OF 03 PANAMA 002417

SIPDIS

DEPARTMENT FOR WHA GREG SCHIFFER

E.O. 12958: N/A
TAGS: PTER ASEC KCRM EFIN KHLS KPAO PM LABOR HUMAN RIGHTSPOLMIL
SUBJECT: 2005 ANNUAL TERRORISM REPORT

REF: STATE 193439

Embassy point of contact for this report is Poloff Richard J.
O'Shea, email oshearj@state.gov, phone number (011)
507-207-7183.


1. (SBU) Summary: Panama continues to be a strong partner
with the U.S. in the global war on terrorism. The Panama
Canal is the country's most important economic asset. Any
act of terrorism that closes off the Canal could severely
impact Panama's economy, the U.S., and other countries in the
region that rely heavily on the Canal for commerce. Panama's
Public Forces (PPF) closely monitor the Revolutionary Armed
Forces of Colombia (FARC) and United Self-Defense Forces of
Colombia's (AUC) activities in the Darien Province, on the
Colombian border. The Government of Panama (GOP) has
undertaken a review of the structure of the PPF and conducts
exercises to ensure its ability to protect the Canal and
residents of Panama against a possible terrorist act. End
summary.


2. (SBU) SUPPORT IN INTERNATIONAL FORA:

The GOP signed and ratified all twelve international
counterterrorism conventions passed after September 11, 2001.
The GOP fully supports the Inter-American Convention Against
Terrorism. Panama was also one of the first countries to
join the Coalition of the Willing.


3. (SBU) SUPPORT TO THE U.S. WAR ON TERRORISM:

On May 12, 2004 Panama signed the Proliferation Security
Initiative (PSI) which allows U.S. forces to board Panamanian
flagged vessels suspected of carrying weapons of mass
destruction. Panama maintains the world's largest ship
registry, making PSI an important tool in countering
terrorism. The United States and Panama are discussing
information exchanges on various security issues.

Panama provides enhanced force protection for U.S. military
vessels, including submarines, during "high value transits"
(HVT) of the Canal. USG officials have praised the GOP's
level of support and security for HVTs. In 2005, the PPF
also supplied enhanced security for 80 ships carrying nuclear
waste or nuclear cargo through the Canal. During the recent
visit to Panama by President Bush, the GOP permitted a
sizable U.S. military presence to counter the possibility of
a terrorist act.


4. (SBU) SUPPORT TO INTERNATIONAL TERRORISM

Panama has not/not made any public statements in support of a
terrorist-supporting country on a terrorism issue. The GOP
has not/not provided any support to international terrorism,
terrorists, or terrorist groups. On the contrary, the GOP
has spoken out against terrorism in many international forums
and has signed or ratified all applicable international
agreements concerning counterterrorism. Panama currently has
no recognized domestic terrorism organizations and no known
terrorist activities occurred in Panama during 2005.


5. (SBU) TERRORIST ACTIVITIES IN BORDER REGIONS

Panama's remote border region with Colombia, the Darien
province, has been used in the past as a rest and recreation
point for the Revolutionary Armed Forces of Colombia (FARC).
In January 2003, AUC narcoterrorists killed four Panamanian
citizens in the village of Paya. Following this tragic
incident, Panama increased its border security in the Darien.
Panama has no army, however, the Panamanian National Police
(PNP) with U.S. training and assistance established a
permanent presence along the border with Colombia to prevent
narcoterrorist operations. In June 2003, Panama signed a
border security cooperation agreement (Comision Binacional
Fronteriza or COMBIFRON) with Colombia. COMBIFRON provides a
framework for sharing cross-border security information and
encourages security-force cooperation on insurgent, drug, and
illegal migrant issues. Currently Panama is reviewing its
security apparatus and is discussing the creation of a
dedicated border patrol force. The proposed Border Patrol
Force will be a separate service from the PNP and have its
own director and staff officers. Panama believes a dedicated
Border Patrol Force will result in higher professionalism as
well as improved security on the borders with Colombia and
Costa Rica. The PNP in turn will dedicate more of its
efforts to traditional police functions instead of rotating
part of its force to the border to conduct paramilitary
operations every 30 days.


6. (SBU) GOVERNMENT COOPERATION

Panama remains as a transshipment point for arms, drugs, and
smuggling of illegal aliens due to its highly developed
commercial transport sector and shared border with Colombia.
Colombia is home to the FARC and AUC, both designated as
terrorist organizations by the State Department. The GOP
continues to closely monitor FARC activities in the Darien.
Panama's National Maritime Service (SMN) works closely with
the U.S. Coast Guard (USCG) in the Prisoner Transfer program.
This program transfers mostly narcotraffickers, whose
revenues support the FARC and the AUC, to U.S. custody for
prosecution. Panamanian law enforcement authorities have
also worked jointly with the U.S. Drug Enforcement
Administration (DEA) to seize over 12 metric tons of cocaine,
approximately 140 AK-47 rifles with magazines, and 36 other
assorted weapons. The PNP also transferred 85 prisoners to
DEA for prosecution in the United States as a result of these
operations, known as renditions.

As part of a review of its security apparatus, the Panamanian
Public Forces (PPF),the GOP is conducting joint training
operations between the National Maritime Service (SMN),
National Air Service (SAN),and the PNP on how to prevent a
terrorist attack on the Panama Canal. The Ministry of
Government and Justice (MOGJ) uses classroom training,
table-top exercises, and field visits to improve coordination
between the PPF agencies. Panama is also the sponsor and
host of PANAMAX, an annual multinational exercise that
simulates the defense of the Canal. The 2005 exercise
scenario dealt with a planned terrorist attack on the Canal
and 15 nations, including the U.S., participated.

The Colon Free Trade Zone is the second largest in the world
and over 1800 companies operate there, importing and
re-exporting goods from around the world, including the
Middle East. Due to its 20% unemployment rate, high level of
poverty, and its use by drug smugglers, the adjacent town of
Colon has a critical crime rate. The GOP is concerned about
the possibility of terrorist groups exploiting Colon's
poverty and drug smuggling routes to further their goals. In
July 2005, President Torrijos announced a $24 million
infrastructure development project for Colon to attack the
root causes of Colon's problems and reduce the possibility of
terrorist groups operating from Colon.

Panama's Foreign Ministry, Council for Public Security and
National Defense, Financial Analysis Unit, and the
Superintendent of Banks are fully cooperative in reviewing
terrorism finance lists. In 2005, no terrorist assets were
discovered. The Panamanian legislature passed new
legislation restricting possession of precursor chemicals and
toughened laws on money laundering.

Panama has not made any arrests, trials, or convictions of
terrorists in 2005. The GOP did not extradite or request
extradition of any suspected terrorist to or from other
countries during 2005. The U.S. did not request Panama to
extradite any suspected terrorists in 2005. Article 24 of
the Panamanian Constitution prohibits the extradition of
Panamanian nationals for any reason and of foreign nationals
for political crimes. Also, the GOP will not extradite
anyone for a crime punishable by death, unless the requesting
country provides formal assurance that the individual will
not receive a penalty greater than Panama's maximum sentence
(for any crime) of 20 years imprisonment.

Panama remains a low-threat post for indigenous terrorism and
has recently been downgraded from "high" to "medium" on the
State Department's Security Environmental Threat List (SETL)
for transnational terrorism. The GOP maintains a high level
of cooperation in the war on terrorism.

EATON