Drug Flow/Transit.

Panama remains an integral territory for the transit and distribution of South American cocaine, heroin, and Ecstasy. These drugs are moved in a variety of modes: traffickers primarily use fishing vessels, cargo ships, small aircraft, and go-fast boats. These vehicles often refuel or exchange goods in or near Panama. Goods exchanged from sea borne mediums to land are loaded onto trucks for a northbound journey via the Pan-American Highway or placed in sea-freight containers near the Panama Canal for transport on cargo vessels. Illegal airplanes utilize hundreds of abandoned or unmonitored legal airstrips for refueling, pickups, and deliveries. Couriers transiting Panama by commercial air flights continued to move cocaine, as well as heroin, to the United States and Europe during 2004.

Domestic Programs (Demand Reduction).

CONAPRED’s five-year counternarcotics strategy identifies 29 demand reduction, drug education, and drug treatment projects to be funded between 2002 and 2007 at a cost of U.S. $6.5 million. During 2004, five projects were funded under this strategy, with a total cost of $790,000. The Ministry of Education and CONAPRED—supported by U.S. funding—promoted demand reduction through training for teachers and information programs. NAS is assisting with the implementation of an August 2003 law that created a national drug prevention education program, which mandates inclusion of drug prevention in school curriculum. CONAPRED and the Embassy’s NAS also supported the Ministry of Education’s National Drug Information Center (CENAID). The PNP Juvenile Police, with NAS funding, implemented the DARE Program in Panama City public schools.

Corruption.

Corruption emerged as one of the primary issues in the 2004 Presidential campaign. As a result of the public’s opinion on corruption, current President Martin Torrijos ran a campaign based on purging corruption from the government. The new administration made several strides towards accomplishing this goal since taking office in September 2004, including auditing government accounts, and launching investigations into major public corruption cases. The GOP has also revoked the Moscoso Administration’s implementing decree that limited public requests for government information. Panama has created a national anticorruption commission in the Ministry of the Presidency that is charged with coordinating the government’s anticorruption activities.

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 1982 Protocol, and the 1971 UN Convention on Psychotropic Substances. A mutual legal assistance treaty and an extradition treaty are in force between the United States and Panama, although the Panamanian constitution does not permit extradition of Panamanian nationals. A Customs Mutual Assistance Agreement and a stolen vehicles treaty are also in force. In 2002, a comprehensive maritime interdiction agreement between the USG and GOP entered into force. 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.

IV. U.S. Policy Initiatives and Programs

Policy Initiatives.

The United States provided crucial equipment, training, and information to enhance the performance of GOP counternarcotics, public force, and law enforcement institutions in 2004. These U.S.-supported programs are aimed at 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 Panamanian laws.

NAS is implementing a law enforcement modernization project that has the goal of professionalizing the Panamanian National Police. The key pillars of the project involve implementing community policing in Panama, expanding existing crime analysis technology and promoting managerial change to allow greater autonomy and accountability to develop best practices among local police commanders.

Years of support to the SMN, including donations of equipment and regular USCG training contributed to the 2004 SMN successes. The SMN accounted for 17 percent of Panama’s total cocaine seizures last year. Aside from equipment for the 180-foot SMN ship, NAS also continued refurbishing "go fast" boats for the SMN.

The United States has provided Panamanian Customs with training, operational tools, and a canine program that has become a linchpin of the Tocumen International Airport Drug Interdiction Law Enforcement Team. A U.S.-funded X-Ray machine also became operational at the airport during 2004.

In 2004 the USG, through the NAS, assisted the GOP in upgrading the Public Ministry’s Anti-Corruption Unit. NAS supplied computers, office equipment, and other necessary gear. NAS also purchased several vehicles for the PTJ Vetted Unit.

NAS continued to support the Ministry of Education’s teacher training programs in demand reduction.

Bilateral Cooperation.

The Torrijos Administration continues to maintain close cooperation with the U.S. by sustaining joint counternarcotics efforts with the DEA and by strengthening national law enforcement institutions. The maritime interdiction agreement has facilitated enhanced cooperation in maritime interdiction efforts, with Panama playing a vital role in facilitating the transfer of prisoners and evidence to the United States.

The Road Ahead.

The GOP continues to demonstrate its commitment to build strong law enforcement institutions and deter the flow of narcotics northward. The U.S. will continue to encourage Panama to devote sufficient resources to enable its forces to patrol fully the land borders, the Panamanian coastline, and the adjacent sea-lanes, rendering them inhospitable to illicit arms and narcotics traffic. The U.S. is encouraging the development of a multi-agency Panamanian Port Security Boarding Unit, which is scheduled to start operations in 2005.

In 2004, multinational maritime border operations yielded a 2.6MT cocaine seizure and turned around or chased 4 other go-fast boats. Continuing this operation should be a priority for 2005. The USG will continue to work with the GOP to help strengthen Panama’s ability to deter trafficking in drugs by providing training and equipment. The United States will also continue to work with the GOP to help strengthen Panama’s law enforcement and public forces institutional capacity and will provide assistance to Panama to support criminal justice reform, as well as anticrime and anticorruption efforts.

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