Country Reports on Terrorism 2008 - Panama

The Panamanian government approved a reform of its security forces that touched off a controversy over whether the government intended to "re-militarize." The government justified these security reforms by pointing to the need to protect the Canal from possible terrorist attacks. An act of terrorism that closed off the Panama Canal would severely affect the economies of Panama, the United States, and other countries that rely heavily on the Canal for commerce.

The reforms fused the National Maritime Service (SMN) and the National Air Service (SAN) into a new, coast guard-like National Aero-Naval Service (SENAN). It also created a legal framework for the country's intelligence service, now called the National Intelligence and Security Service (SENIS). Finally, it broke off the National Frontier Directorate or the Panamanian National Police (PNP) to form a new independent security service, called the National Frontier Service (SENAFRONT). The reforms also made it possible for uniformed officers to lead all these services, something previously prohibited by law. The creation of the SENAFRONT was publicly justified by the need to keep a police force permanently deployed on the border to protect against "irregulars" and drug traffickers. Major investments will be required before these changes can be expected to have a serious improvement on operational capability. Some investments in improved equipment, such as new and refurbished helicopters, were underway at year's end.

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 Panama's Public Forces (PPF) closely monitored its activities. The PPF captured six members of the FARC in a boat off the village of Jaque in the Darien in February, after the occupants of the boat opened fire on the PPF. There were several reports of FARC members entering villages in the Darien and stealing supplies. A shoot-out occurred between the PPF and the FARC in the village of Manene in the Darien in December. The PFF wounded and captured at least one member of the FARC. The FARC was believed to have had links to several kidnappings in Panama.

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 PPF agencies. Panama co-hosted the annual PANAMAX exercise, a multinational security training exercise tailored to the defense of the Canal. The exercise replicated real world threats to the Canal to develop appropriate responses and guarantee safe passage to the approaches to the Canal and through the waterway. Twenty nations participated, including the United States. On the margins of PANAMAX, Panama once again hosted a tabletop exercise specifically designed to examine its ability to address asymmetric threats.

Panama continued to participate in the Container Security Initiative (CSI) at two ports. CSI activities at a third port will be operational shortly, as a third scanner has just been installed in the Colón Free Trade Zone. Additionally, the Department of Energy's Megaports Radiation Portals became functional at the ports of Manzanillo and Balboa.

PPF Counterterrorism units in the police and frontier forces continued to benefit from the third year of counterterrorism training funded by United States Southern Command (SOUTHCOM) and provided by U.S. Navy Special Warfare South personnel.

Panama is an international offshore banking center. While the government has taken extensive measures to combat money laundering in the banking system, the Colón 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.