P 212102Z NOV 08
FM AMEMBASSY PANAMA
TO SECSTATE WASHDC PRIORITY 2677

UNCLAS PANAMA 000881 
 
 
FOR INL/LP - Crook AND INL/AAE - LYLE 
 
E.O. 12958: N/A 
TAGS: SNAR PM
SUBJECT: DRAFT 2008-2009 INTERNATIONAL NARCOTICS CONTROL STRATEGY 
REPORT (INCSR) FOR PANAMA: PART I, DRUGS AND CHEMICAL CONTROL 
DIVERSION CONTROL 
 
REF: STATE 137250 
 
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Summary 
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¶1.  By virtue of its geographic position and well-developed maritime 
and transportation infrastructure, Panama is a major logistics 
control and trans-shipment country for illegal drugs to the United 
States and Europe.  Major Colombian and Mexican cartels as well as 
Colombian FTOs such as the Revolutionary Armed Forces of Colombia 
(FARC), and paramilitary remnants of the United Self-Defenses of 
Colombia (AUC) use Panama for drug trafficking and money laundering 
purposes.  The Torrijos Administration has cooperated vigorously 
with the U.S. and, to a lesser extent, with its regional neighbors 
on counter-narcotics operations. In 2008, seizure levels remain very 
high with over 40 tons of Cocaine having been seized so far this 
year. U.S. support to Panama's counter-narcotics efforts, including 
developing an effective community policing model to help control a 
nascent gang problem, is crucial to ensure fulfillment of agency 
missions. Panama is a party to the 1988 United Nations Drug 
Convention. 
 
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Status of Country 
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¶2.  Panama's geographic proximity to the South American cocaine and 
heroin producing countries makes it an important trans-shipment 
point for narcotics destined for the U.S. and other global markets. 
Panama's four major containerized seaports, the Pan-American 
Highway, a rapidly growing international hub airport (Tocumen), 
numerous uncontrolled airfields, and relatively unguarded coastlines 
on both the Atlantic and Pacific all facilitate drug movement. 
Smuggling of weapons and drugs continues to take place, particularly 
between Colombia and the isolated Darien region, the Azuero 
peninsula and the sparsely populated Caribbean coastal areas.  The 
flow of illicit drugs has contributed to increasing domestic drug 
abuse and gang violence, and Panamanian authorities attributed the 
majority of murders to revenge killings between traffickers. Panama 
is not a significant producer of drugs or precursor chemicals. 
However, limited amounts of cannabis are cultivated for local 
consumption. 
 
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Country Actions Against Drugs in 2008 
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¶3.  Country Actions Against Drugs in 2008: 
 
--Policy Initiatives: The Torrijos Administration is strongly 
committed to counter-narcotics and anti-crime cooperation with the 
U.S.  Panama participated in the U.S.-Central American Integration 
System (SICA) security dialogue.  Panama passed a law reforming the 
criminal system from a written (inquisitorial) system to a largely 
oral (accusatorial) system. The accusatorial system will be 
implemented over a several year period. The first province to switch 
will be Cocle in late 2009, and Panama will be the last province to 
adopt the new system in 2014. The GOP passed laws by decree in 
August that reformed the organization of the security apparatus, 
eliciting strong opposition from some media, civil society and 
opposition political leaders, who claimed the government was 
attempting to "re-militarize" the country. Among the reforms was the 
merger of the National Air Service (SAN) and the National Maritime 
Service (SMN) into one "Coast Guard"-like service to be called the 
National Aero-Naval Service (SENAN) that will become official on 22 
November and require heavy investment to make the new service 
operational. The GOP also passed a reform that separates the 
frontier police from the National police (PNP), as of November, 
creating an independent National Frontier Service (SENAFRONT). This 
reform will be less traumatic, as the frontier force already existed 
as a separate force (DINAFRONT). Early in 2008, another reform 
folded the Technical Judicial Police (PTJ) into the National Police 
investigative division, creating the new Division of Judicial 
Investigations (DIJ).  A separate intelligence directorate known as 
DIP still remains a separate function under the PNP. The forensic 
investigation responsibilities remained with the Public Ministry and 
Attorney General's office.  In 2008, Panama for a second straight 
year, carried out a successful table-top exercise (Panamax Alpha) to 
address asymmetrical threats to the Panama Canal. 
 
--Accomplishments: USG law enforcement agencies continued to enjoy a 
cooperative relationship with GOP counterparts in narcotics-related 
criminal matters.  Cocaine seizures are over 40 tons in 2008 and 
arguably are the most significant in the region. International 
drug-related arrests also remain strong.  Our extradition 
relationship with Panama is efficient and fluid.  Several sensitive 
vetted units continue to operate with impressive results. 
 
--Law Enforcement Efforts: Drug Enforcement Administration 
(DEA)-monitored statistics for 2008 indicate seizures of over 40.5 
metric tons (MT) of cocaine, 17 kg of heroin, and 126 arrests for 
international drug-related offenses.  Several USG-supported GOP 
sensitive units were fortified with equipment and increased 
personnel in 2008.  The SMN cooperates with the U.S. Coast Guard 
(USCG) requests for ship registry data, and provides officers to 
serve aboard USCG cutters as "ship riders," allowing USCG to patrol 
Panamanian waters under Panamanian control.  The SAN also provides 
excellent support for counter-narcotics operations within its 
limited means, including patrolling and photographing suspect areas, 
identifying suspect aircraft.  The newly formed "ICE vetted unit" 
began operating in the summer of 2008. The unit will focus on 
international crimes other than drug trafficking. So far they have 
assisted in capturing U.S. fugitives, pedophiles and other criminals 
escaping justice from the US and other countries. The Government of 
Panama has staffed the U.S.-funded Guabala checkpoint (inaugurated 
in early 2006) on the Pan-American Highway, and the national police 
deploy mobile road blocks throughout the country targeting land 
based movements of drugs. 
 
--Corruption: President Torrijos's administration, through its 
National Anti-Corruption Commission, charged with coordinating the 
government's anticorruption activities, continued to audit 
government accounts and launch investigations into major public 
corruption cases.  Several government ministries established 
transparent, automated procedures to minimize opportunities for 
corruption (e.g., for registering a business, preparing a shipment 
for export).  Despite the Torrijos Administration's public stance on 
corruption, few high-profile cases, particularly involving political 
or business elites, have been acted upon. Currently, one high-level 
police commissioner is under investigation for fraud and other 
charges. A USG-funded "Culture of Lawfulness" program, designed to 
encourage officers to fight against corruption within the police, 
has produced 10 trainers with the National Police, and Post 
anticipate training 10 more in the coming year. This program is 
being combined with an aggressive effort to implement a community 
policing program with the PNP. Sixty-seven different police 
districts in Panama City are each going to develop a "citizen's 
security" group that will work with police, evaluate their 
performance and address security issues within their communities. 
The first group is being developed in the San Miquelito District 
which is one of the higher crime areas in Panama. 
 
--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 OAS and is a party to the 
Inter-American Convention on Mutual Assistance in Criminal Matters 
and the Inter-American Convention Against Corruption.  Panama is an 
active participant in the U.S.-SICA security dialogue. 
 
--Cultivation and Production: There have been no confirmed reports 
of cocaine laboratories in Panama since 1994. 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 some chemicals transit 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 2005. 
The new legislation created a chemical control unit.  With the new 
precursor chemical control legislation in place, focus shifted in 
2007 towards capacity building to implement the new laws.  A working 
visit by DEA officials and participation in DEA's operation "seis 
fronteras" has assisted Panama in identifying a list of suspicious 
companies from approximately 675 chemical handlers.  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 2008. So far 
though, no significant seizures or violations have been reported. 
 
--Drug Flow/Transit: Panama remains an important territory for the 
transit and distribution of South American cocaine and heroin, as 
indicated by the more than 40 MT of cocaine seized thus far in 2008. 
Drugs were moved in fishing vessels, cargo ships, small aircraft, 
and go-fast boats.  Illegal airplanes utilize hundreds of abandoned 
or unmonitored legal airstrips for refueling, pickups, and 
deliveries. Panama's coastlines are used to store drugs for 
continued shipment towards Mexico and to store fuel and supplies for 
go fast boats making the runs. Couriers transiting Panama by 
commercial air flights also moved cocaine and heroin to the U.S. and 
Europe during 2008. 
 
--Domestic Programs/Demand Reduction: Through CONAPRED, the GOP is 
implementing a five-year counter-narcotics strategy that includes 29 
demand reduction, drug education, and drug treatment projects for 
2002 through 2007.  The GOP has budgeted a total of $6.5 million to 
fund the projects during the five-year period.  MEDUCA and CONAPRED, 
with USG support, promoted anti-drug training for teachers, 
information programs, and supported the Ministry's National Drug 
Information Center (CENAID). 
 
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U.S. Policy Initiatives and Programs 
------------------------------------ 
 
¶4.  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; improving Panama's border security; and 
ensuring strict enforcement of existing laws.  The Narcotics Affairs 
Section (NAS), DHS, Office of Defense Cooperation (ODC) and USCG 
provided resources for modernization and upkeep of SMN and PNP 
vessels and bases, and assisted the SAN with training personnel and 
maintaining key aircraft for interdiction efforts.  The USG provided 
training and operational tools to the multi-agency Tocumen Airport 
Drug Interdiction Law Enforcement Team.  NAS coordinated training 
for Tactical Law Enforcement procedures, internal affairs and 
Anti-Corruption investigations and crowd controls procedures. NAS 
and CBP continue to organize operational evaluation teams of Border 
Patrol Agents who work in the border areas with National Police. NAS 
continues to develop a major law enforcement modernization project 
with the PNP to develop its police leadership and implement 
community-based policing procedures. The program focuses on many 
pillars including proven community policing tactics, expansion of 
existing crime analysis technology, and promotion of managerial 
change to allow greater autonomy and accountability. NAS provided 
computers, office equipment, and other necessary gear to several 
offices within the Public Ministry. 
 
--Bilateral Cooperation: The Torrijos Administration continued to 
sustain joint counter-narcotics efforts with DEA and USCG, and 
worked to strengthen national law enforcement institutions with 
assistance from NAS.  Maritime cooperation continued to be 
excellent. 
 
--The Road Ahead: The USG encourages Panama to devote sufficient 
resources to enable its forces to patrol land borders along Colombia 
and Costa Rica, its 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 continue to offer the GOP expertise and resources to strengthen 
Panama's ability to safeguard its citizens, confront drug 
traffickers, and ensure that law enforcement efforts are anchored in 
democracy.  The USG will also continue to support law enforcement 
modernization through improved equipment, maintenance, strategic 
planning, decentralization of decision making, and 
community-oriented policing philosophies. 
 
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Statistical Tables 
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¶5.  Drug Seizures and Arrests in Panama: Our 1996-2007 statistics 
table was provided separately (emailed to INL/LP).  2008 statistics 
will be provided by e-mail as well. 
 
Stephenson