U.S. Department of State Country Reports on Terrorism 2006 - Panama

The Panama Canal remains Panama's most important economic asset. Any act of terrorism that could close off the Canal would severely impact the economies of Panama, the United States, and other countries that rely heavily on the Canal for commerce. The government undertook a review of 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 makes it a transshipment point for arms, drugs, and smuggling of illegal aliens. Panama's Public Forces (PPF) closely monitored FARC activities in the Darien Province on the Colombian border. In January, the FARC kidnapped two Spanish citizens near the town of Jaque in the Darien. The group held and later released the two individuals. This incident indicated that the FARC continued to have a presence and activity in the Darien¹. Panama created a dedicated border patrol force for both the Colombian and Costa Rican borders. The Border Protection Force was a separate service 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" (HVT) of the Canal; U.S. officials praised Panama's level of support and security. The Ministry of Government and Justice (MOGJ) used classroom training, table-top exercises, and field visits to improve coordination among the PPF agencies. Panama was also 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. Fifteen nations, including the United States, participated.

The Ministry of Government and Justice, the U.S. Department of Homeland Security and the Department of Justice worked together on joint counterterrorist initiatives, including the malafide traveler interdiction operation at Tocumen Airport, Operation Firewall. Panama worked closely with DHS to finalize the Declaration of Principles for Panama's Container Security Initiative.

On October 30-31, Panama hosted a multilateral conference for Inter-American Committee Against Terrorism (CICTE) members from the United States, Panama, Colombia, and Brazil to discuss strategies and preventative measures to protect critical infrastructure from potential terrorist activities. The conference included expert presentations on topics such as telecommunications, cyber security, and international port security. The October meetings were held in preparation for the upcoming CICTE General Assembly scheduled to take place in late February 2007.

Panama is an international offshore banking center. While the government has taken extensive measures to combat money laundering, the banking system and the Canal Free Zone continue to serve as vehicles 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. The Panamanian legislature passed legislation that toughened laws on money laundering.

1 Panama's remote border region with Colombia, the Darien Province, served in the past as a rest and regrouping point for the FARC.