PRESS RELEASES 2007

March 2007

International Narcotics Control Strategy Report 2007

The 2007 International Narcotics Control Strategy Report (INCSR) is an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act. It describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2006. Volume I covers drug and chemical control activities. Volume II covers money laundering and financial crimes.

Volume I: Drug and Chemical Control - Panama Report
Volume II: Money Laundering and Financial Crimes

Panama Report

I. Summary

By virtue of its geographic position and well-developed transportation infrastructure, Panama is a major drug transshipment point to the United States and Europe. The Torrijos Administration has cooperated closely with the U.S. and its other neighbors on security and law enforcement issues. U.S. support to Panama’s law enforcement agencies, including assistance in restructuring their organizations, remains crucial to ensure fulfillment of agency missions. Panama is a party to the 1988 United Nations Drug Convention.

II. Status of Country

Panama’s geographic proximity to the South American cocaine and heroin producing countries makes it an important transshipment point for narcotics destined for the U.S. and other global markets. Panama’s containerized seaports, the Pan-American Highway, a rapidly growing international hub airport, numerous uncontrolled airfields, and unguarded coastlines on both the Atlantic and Pacific facilitate drug movement. Smuggling of weapons and drugs continues, particularly between the Darien region and Colombia. Over the last year, Panamanian authorities have paid greater attention to security along the border with Costa Rica, inaugurating a border check post in Guabala in May 2006. The flow of illicit drugs has contributed to increasing domestic drug abuse, encouraged public corruption, and undermined the Government of Panama’s (GOP) criminal justice system. Panama is not a significant producer of drugs or precursor chemicals. However, cannabis is cultivated for local consumption.

III. Country Actions Against Drugs in 2006

Policy Initiatives. The Torrijos Administration considers counternarcotics and anti-crime cooperation with the U.S. and combating corruption key priorities. A legal reform proposal currently before Congress will modify the criminal system from a written (inquisitorial) to an oral (accusatorial) system. The GOP has also drafted legislation to merge the current National Air Service (SAN) and National Maritime Service (SMN) into a Coast Guard.

Accomplishments. USG law enforcement agencies enjoy a cooperative relationship with GOP counterparts in narcotics-related criminal matters. International drug-related arrests have increased slightly since last year. A three-year investigation by the Drug Prosecutors Office (DPO), the Public Ministry’s Technical Judicial Police (PTJ), and several other law enforcement agencies in the region culminated in the May 2006 arrest in Brazil of Pablo Rayo Montano, a Colombian-born drug kingpin. Assets located in Panama belonging to his criminal cartel were among those seized by the GOP following his indictment by a U.S. federal court in Miami.

Law Enforcement Efforts. Drug Enforcement Administration (DEA)-monitored statistics for 2006 indicate seizures of 36,635.5 kilograms (kgs) of cocaine, 107.24 kgs of heroin, 4,276.9 kgs of marijuana, $8,324,761.39 in currency seizures (to include seized diamonds and gold), 299 arrests for international drug-related offenses, and seven extraditions for such offenses. In 2006, U.S. Immigration and Customs Enforcement (ICE) developed a joint strategic bulk cash smuggling initiative with Panamanian Customs called Operation Firewall, which resulted in seizures of approximately 40 kgs of gold (valued at approximately $900,000), $357,100 in U.S. currency, and 26,000 Euros.

Several USG-supported GOP units grew and expanded operations in 2006- the PTJ Sensitive Investigative Unit (SIU) responsible for investigations of major drug and money laundering organizations; as well as the Panamanian National Police (PNP) Mobile Inspection Unit and Paso Canoas (Costa Rica border) Interdiction Enhancements, the Tocumen International Airport Drug Task Force, and the Canine Unit made major arrests and seizures.

The SMN responds to USG requests for boarding and interdictions, assists the U.S. Coast Guard (USCG) with verifying ship registry data, and transfers prisoners and evidence to Panama for air transport to the United States.

The SAN provides excellent support for counternarcotics operations, for example, seizing 500 kgs of cocaine and a stolen aircraft, and apprehending two Mexican traffickers in April. The SAN also participated in the interdiction of several go-fast targets in cooperation with JIATF South, and seized a twin engine King Air B-90 when traces of drugs were detected through an IONSCAN machine donated by the USG. The SAN patrols and photographs suspect areas, identifies suspect aircraft, and provides logistical support in the transfer of detainees and drug evidence through Panama to U.S. jurisdiction.

The GOP has begun to draft legislation (requiring passage by Congress) to merge the SMN and SAN into a “Coast Guard.”

Corruption. President Torrijos’s administration, through its National Anti-Corruption Commission, which is charged with coordinating the government’s anticorruption activities, made strides towards purging corruption from government, including auditing government accounts and launching investigations into major public corruption cases. Despite the Torrijos Administration’s public stance on corruption, few high-profile cases, particularly involving political or business elites, have been acted upon. A USG-funded “Culture of Lawfulness” program has trained officials from the Ministry of Education, the PNP, and the PTJ, and a separate initiative to train twelve PNP officers as certified polygraphers has resulted in improved PNP candidate selection.

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 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. A mutual legal assistance treaty and an extradition treaty are in force between the U.S. and Panama, although the Constitution does not permit extradition of Panamanian nationals. A Customs Mutual Assistance Agreement and a stolen vehicles treaty are also in force. In 2002, the USG and GOP concluded a comprehensive maritime interdiction agreement. 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.

Cultivation and Production. There have been no confirmed reports of cocaine laboratories in Panama since 1993-94. Limited cannabis cultivation, principally for domestic consumption, exists in Panama, particularly in the Pearl Islands.

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 (CFZ) for other countries. The Panamanian agencies responsible for chemical control are the National Drug Control Council (CONAPRED) and the Ministry of Health. Legislation to strengthen Panama’s chemical control regime was signed by President Torrijos in April 2005. With the new precursor chemical control legislation in place, focus shifted in 2006 towards capacity building to implement the new laws. The new legislation created a chemical control unit, which is co-located with the Joint Intelligence Coordination Center (JICC), a multi-agency intelligence information center manned by members of all public forces and the PTJ with direct access to over 25 databases. The Chemical Control Unit worked closely with DEA Diversion Investigators to initiate investigations on suspicious companies. The Chemical Control Unit identified 20 companies that need to be monitored on a regular basis and conducted administrative inspections at several company sites. The Chemical Control Unit also coordinated with the PNP Narcotics Unit to conduct the necessary enforcement operations. The GOP also improved its ability to combat precursor chemical diversion through training and by conducting joint investigations with the DEA in 2006.

Drug Flow/Transit. Panama remains an integral territory for the transit and distribution of South American cocaine and heroin demonstrated by 2006 seizures in Panama of over 36 metric tons (MT) of cocaine and over 100 kilograms (kgs) of heroin. The drugs were moved in fishing vessels, cargo ships, small aircraft, and go-fast boats. Illegal airplanes utilized hundreds of abandoned or unmonitored legal airstrips for refueling, pickups, and deliveries. Couriers transiting Panama by commercial air flights also moved cocaine and heroin to the U.S. and Europe during 2006.

Domestic Programs (Demand Reduction). Through CONAPRED the GOP is implementing a five-year counternarcotics strategy that includes 29 demand reduction, drug education, and drug treatment projects for 2002 through 2007. The GOP has set aside $6.5 million to fund the projects. In 2006, CONAPRED funded seven prevention and/or treatment projects with a total cost of approximately $1.05 million. The Ministry of Education and CONAPRED, with USG support, promoted anti-drug training for teachers, information programs, and supported the Ministry of Education’s National Drug Information Center (CENAID).

IV. U.S. Policy Initiatives and Programs.

Policy Initiatives. USG-supported programs focus on 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 laws.

The Narcotics Affairs Section (NAS) in the U.S. Embassy provided crucial equipment and training support for the Fluvial (riverine) division of the PNP, one of the major success stories of the GOP’s interdiction efforts. The NAS Department of Homeland Security (DHS), and USCG provided resources for modernization and upkeep of SMN boats and bases, and began assisting SAN in providing air patrol platforms for drug interdiction efforts. The USG provided Panamanian Customs with training, operational tools, and a canine program that has become a linchpin of the Tocumen Airport Drug Interdiction Law Enforcement Team.

A major NAS law enforcement modernization project to professionalize the PNP involves implementing community policing, expanding existing crime analysis technology, and promoting managerial change to allow greater autonomy and accountability. Work is nearly complete on the initial phase of the national crime tracking and mapping system (INCRIDEFA), which will enable the PNP to track criminal incidents in real time. Training to achieve police management change has been developed with the Miami-Dade Police Department and the University of Louisville Southern Police Institute.

In 2006 the USG also assisted the GOP in upgrading the Attorney General’s Anti-Corruption Prosecutor’s Office. The USG supplied training, computers, office equipment, and other necessary gear.

Bilateral Cooperation. The Torrijos’ Administration continued to sustain joint counternarcotics efforts with the DEA and to strengthen national law enforcement institutions. The maritime interdiction agreement has facilitated enhanced cooperation in interdiction efforts, with Panama playing a vital role in facilitating the transfer of prisoners and evidence to the U.S. enabling USG assets to remain on patrol in theater.

The Road Ahead. The USG encourages Panama to devote sufficient resources to enable its forces to patrol land borders along Colombia and Costa Rica, coastline, and the adjacent sea-lanes, and to increase the number of arrests and prosecutions of major violators, especially in the areas of corruption and money laundering. The USG will work closely with the GOP on the development of a new Panamanian Coast Guard, and support law enforcement modernization through improved equipment maintenance, strategic planning, decentralization of decision making, and community oriented policing philosophies.

* Includes 8 interdiction/seizure events in international waters resulting from PCO information/coordination.

+ Includes U.S. currency value of seized diamonds and gold.