This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 04 PANAMA 000325 
 
SIPDIS 
 
 
E.O. 12958: DECL: 02/05/2014 
TAGS: EWWT KNNP PTER ETTC PREL PM POL CHIEF
SUBJECT: PANAMA'S PROGRESS ON MARITIME SECURITY -- GOOD 
OVERALL BUT WORK REMAINS 
 
REF: A. 2002 PANAMA 3800 
     ¶B. 2003 PANAMA 798 
     ¶C. 2003 PANAMA 1558 
     ¶D. 2003 PANAMA 1608 
     ¶E. 2003 PANAMA 1634 
     ¶F. 2003 PANAMA 2017 
     ¶G. 2003 PANAMA 2307 
     ¶H. 2003 PANAMA 2409 
     ¶I. 2003 PANAMA 2453 
     ¶J. 2003 STATE 340550 
     ¶K. 2003 PANAMA 3298 
     ¶L. 2003 PANAMA 3300 
     ¶M. STATE 25533 
 
 
Classified By: Econ Chief, Andrew N. Bowen for reasons 1.5(d) 
 
 
¶1.  (SBU) The September 11 attacks called significant 
attention to the potential for terrorist exploitation of 
Panama,s leading maritime position. Panama has the world,s 
largest flag state registry with approximately 6300 vessels 
over 500 gross metric tons and approximately 300,000 
seafarers.  Additionally, approximately two-thirds of Canal 
traffic originates or terminates at U.S. ports, roughly 13% 
of U.S. seaborne trade.  Nearly, 27 percent of 
foreign-flagged cargo ships arriving at U.S. ports are 
Panamanian.  Moreover, approximately 150 U.S. military 
vessels, including nuclear-powered U.S. submarines ("high 
value transits"), visit Panamanian ports and/or transit the 
Canal each year. 
 
 
¶2.  Given these equities, during the past year, the Embassy, 
through its Maritime Security Working Group and in 
coordination with Washington agencies, has undertaken a broad 
Maritime Security agenda with the GOP (REFTELS). We have seen 
a strong willingness on the part of the Moscoso 
Administration for Panama to meet its responsibilities as a 
major maritime player.  Progress has been particularly good 
since President Moscoso's appointment in June 2003 of 
Panama,s Public Security and National Defense Council ("the 
Consejo") Executive Secretary Ramiro Jarvis to coordinate 
maritime security matters.  Key components of the agenda 
include: secure seafarer documents, U.S. force protection, 
port security, container security, export controls, 
proliferation security, and strengthening GoP institutions 
(REF C). Progress by the GOP has been good on all of the 
fronts and in several cases the ball is in our court; 
however, we will have to keep the pressure on the GOP to 
follow-through, in particular, on ISPS implementation and new 
seafarer documents.  The fact that this is an election year 
in Panama will not facilitate things, but should also not 
hinder progress too much. The following paragraphs provide a 
brief update of key components of our agenda, which continues 
to evolve as the USG develops its broader maritime security 
strategy. 
 
 
--------------------------------------------- --------- 
Component 1: Convince the GOP to create a secure system for 
seafarer documents, to include biometric markers, and 
verified credentials for Panama,s merchant marine. 
--------------------------------------------- --------- 
 
 
¶3.  (C) Panama,s Maritime Authority (AMP) assured the 
Embassy that the Ministry of Economy and Finance (MEF) would 
tender a public bid for creation of such a system by January 
¶2004.  MEF has allocated close to $3 million in order to fund 
the process; however, the public tender remains pending. The 
new documents will comply with requirements of the 
International Labor Organization,s (ILO) Convention 108 
(pertaining to International Identification Documentation), 
which issued directives for seafarer documents following a 
request from the International Maritime Organization (IMO). 
The GOP and ILO maintain, however, that full-blown biometrics 
are not required for this credential, although it will 
contain some security features.  The AMP is weighing the 
possibility of including a fingerprint on the document. 
Regardless of the Panamanian document's quality and improved 
controls on how such documents will be issued (Ref G), we 
remain concerned that the GoP will be challenged to conduct 
adequate background checks on seafarers.  While Consejo 
Director Jarvis has indicated that the Embassy would have 
access to the names of the applicants, we will continue to 
press the GOP to obtain unfettered access to the seafarer 
database to monitor issuance.  (Note: Corruption/graft by AMP 
officials and Panamanian Consuls in the issuance of 
seafarer,s documents has been well documented (Ref B). 
 
 
--------------------------------------------- ------------ 
Component 2: Push for the GOP to assure adequate, permanent 
facilities for National Maritime Service (SMN) bases, 
particularly at Pacific and Atlantic entrances to the Canal. 
--------------------------------------------- ------------ 
 
 
¶4.  (C) On October 9, 2003 the Interoceanic Region Authority 
(ARI) signed over title to a new facility near the Atlantic 
entrance of the Canal for the SMN.  The Consejo has also 
received an oral commitment from the Pacific-side 
concessionaire that the SMN will be granted "long term use 
rights" to a facility located on the concessionaire,s 
property.  NAS funds have been earmarked to assist the GOP in 
reconstructing its Atlantic side pier facilities for the SMN. 
 Embassy is currently working closely with the SMN to begin 
construction on the pier and associated facilities. 
 
 
--------------------------------------------- ------------- 
Component 3: Develop a force protection arrangement to cover 
Canal transits by nuclear-powered U.S. submarines. 
--------------------------------------------- ------------- 
 
 
¶5.  (C) This component focuses on force protection procedures 
for high value transits (HVTs) through the Canal.  The 
Consejo is consulting with the Panama Canal Authority (ACP) 
and security-related GOP agencies.  The GOP appears willing 
to conclude an arrangement whereby force protection 
procedures will be incorporated into ACP regulations.  A 
formal GOP reply/counter-proposal is expected by mid-March; 
we are optimistic that we can conclude some kind of agreement 
before the current government leaves office September 1, 2004. 
 
 
--------------------------------------------- ------------ 
Component 4: Support the creation of an analytical unit to 
monitor freight and container movements to enhance security. 
--------------------------------------------- ------------- 
 
 
¶6.  (SBU) Implementation of the U.S. Customs, Container 
Security Initiative (CSI) will facilitate the creation of 
such a unit.  A CSI port assessment team visited Panama 
mid-January 2004.  Post is awaiting the results of that 
assessment. (NOTE: Roughly 4 million containers (TEU) 
transited the Panama Canal in 2003; approximately 2 million 
containers (TEUs) were handled in Panama's ports; but, only 
75 thousand containers were loaded onto ships in Panamanian 
ports and ended up in the U.S. (2002 stats). 
 
 
--------------------------------------------- -------------- 
Component 5: Press the GOP to create port captaincies with 
national security/law enforcement authority or port security 
chief positions to coordinate these functions. 
--------------------------------------------- -------------- 
 
 
¶7.  (C) The GOP has designated the AMP with port captaincy 
responsibility instead of the SMN, as reflected by absence of 
authorizing text in the most recent draft of the SMN,s 
Organic Law.  However, to create a check and balance on the 
AMP, the Embassy is considering advocating that the AMP be 
required to designate a law enforcement officer from the SMN 
to be located at each port to assist the captain of the port. 
 Comment: our concern about the AMP fulfilling this role is 
twofold - first, the AMP is debilitated by graft and 
corruption; second, the AMP does not have the law enforcement 
authority or capability to serve as the port captaincy. 
 
 
--------------------------------------------- ----------- 
Component 6: Urge implementation of legislative/regulatory 
enhancements necessary for Export Controls and the 
International Ship and Port Facility Security (ISPS) Code 
--------------------------------------------- ----------- 
 
 
¶8.  (C) Export Controls: The USG through the State 
Department,s Export Control and Related Border Security 
Assistance (EX-BIS) program and the Department of Commerce,s 
Transshipment Country Export Control Initiative (TECI) is 
working with Panama to develop and improve its 
export/transshipment controls. The GOP sent a team of key 
decision-makers to Washington to work with Commerce, Customs, 
and State Department officials December 8-11, 2003 to, inter 
alia, review the legal requirements for establishing an 
export control law and to improve its export/transshipment 
controls. Based on that visit the GOP has committed to 
introducing draft legislation to control the export, 
re-export, transit and transshipment of strategic items 
through the territory of Panama by April 2004. 
 
 
¶9.  (C) ISPS: The AMP is making considerable headway in this 
endeavor, despite resistance from the powerful and 
politically motivated Panama Maritime Lawyers Association. 
After designating Phoenix Services group (a U.S. company) as 
the primary Recognized Security Organization (RSO) for 
vessels in August 2003, AMP responded to Japanese shipping 
companies, concerns by designating two additional RSO,s on 
December 15: Singapore based Singapore Technologies and 
London-based Universe Security Group. The AMP has begun 
receiving applications for ship security plans, and has 
completed the reviews of some key shipping lines like Ned 
Lloyd.  The AMP fully recognizes that it will not/not certify 
all of the required vessels in its fleet prior to the July 1 
deadline.  AMP officials note that it expects to certify all 
ships above 1500 GMTs by the deadline, but that the laggards 
will be those ships between 500 - 1500 GMTs.  AMP officials 
note that most of the Panamanian flagged fleet (approximately 
70 percent) never travel to the U.S. 
 
 
¶10.  (C) The AMP has also made the preliminary announcement 
of a second layer of "verifying RSO,s" that will physically 
match individual security plans to specific vessels. 
Unfortunately three of the designated verifying RSO,s from 
Panama appear to be USCG Priority 1, or blacklisted, on 
safety grounds.  Nonetheless, the AMP has maintained that 
including these societies was politically necessary to 
appease local industry.  AMP argues that since evaluations 
for security are distinct from those for safety, it's 
premature to discard these RSO,s.  Finally, the AMP has 
assured the USG that should any of these RSOs fail in the 
security arena, the AMP would have a "One strike and you're 
out" policy. 
 
 
--------------------------------------------- ------------ 
Component 7: Urge the passage of an organic law for the SMN 
to provide a framework for its institutional development and 
for implementation of professional programs with stability 
for key personnel. 
--------------------------------------------- ------------- 
 
 
¶11.  (C) The organic law, approved by the Moscoso Cabinet, 
was submitted to Panama's legislative Assembly for passage in 
early December 2003.  Whether ultimately passed or not, the 
organic law will at minimum take effect as a "Ley Ejecutivo." 
 The law defines the SMN's primarily law enforcement mission 
and protects the institution and personnel (Ref L).  Some 
observers have criticized the organic law as inadequate to 
meet the SMN's bureacratic needs.  However, the law gives the 
SMN greater legitimacy and could help buttress the SMN's 
bureaucratic strength, if the SMN were able to find a 
Director with better political skills than the current one. 
 
 
--------------------------------------------- ------------- 
Component 8: Negotiate a bilateral agreement on cooperation 
in homicide, kidnapping and terrorism cases on the high seas. 
--------------------------------------------- ------------- 
 
 
¶12.  (C) State's L/OES is currently preparing instructions 
containing a draft MOU proposed by USCG HQ. 
 
 
--------------------------------------------- ---------- 
Component 9: Push for control and verification of Panama,s 
maritime security and ISPS compliance by a national authority 
like the Consejo 
--------------------------------------------- ---------- 
 
 
¶13.  (C) The Consejo has been assigned the responsibility of 
inter-agency coordination of Panama,s maritime security to 
include working with Panama,s Maritime Authority (AMP) on 
ISPS compliance.  This marks a major step forward for Panama. 
 
 
--------------------------------------------- --------- 
Component 10:  Negotiation of a Proliferation Security 
Initiative (PSI) Boarding Agreement with Panama 
--------------------------------------------- --------- 
 
 
¶14.  (C) As laid out in ref K, the GOP is open to negotiating 
and concluding a boarding agreement to target ships suspected 
of carrying weapons of mass destruction (WMD), delivery 
systems and/or related materials.  However, the GOP has 
indicated its preference that the supplemental maritime 
agreement signed on February 5, 2002, between the USG's Coast 
Guard,  the GOP's National Maritime Service (SMN) and 
National Air Service (SAN), be amended to fulfill the purpose 
of a PSI agreement.  Post is optimistic that with the 
guidance provided in Ref M (dated 4 Feb 04) we will be able 
to move forward with amendment of the supplemental maritime 
agreement to fulfill USG PSI objectives. 
 
 
WATT