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Australian Federal Police - Platypus Journal/Magazine |
Panama is central to money laundering and cocaine investigations
By Federal Agent Grant Edwards, liaison officer, Los Angeles
The Panama Canal joins the Atlantic and Pacific Oceans across the Isthmus of Panama. It runs from Cristobel in the north to Balboa in the south.
The overseas assembly of liaison officers is critical to the success of the AFP's core business. With the recent expansion of the overseas network, the AFP is placed to further enhance its international reputation and commence relationships with nations not previously exposed to the AFP. One such nation is the Central American country of Panama.
Historically, Panama has been seen in AFP investigations as a source and staging point for the international distribution of cocaine, but the previous unstable political climate meant entering into law enforcement arrangements could be difficult and dangerous.
With the decline of the Noriega rgime in the early 1990s, an opportunity arose to begin relations with Colombia through liaison visits.
This relationship has more recently taken on greater significance with the establishment in October 2000 of a liaison office in Bogota, capital city of Colombia
Because of Panama's proximity to the cocaine producing area of South America and its position to the south of Mexico and the US, it has always been seen, at least by the US, as a strategic focal point in the fight against the international movement and distribution of cocaine. Recently, other nations have followed; in particular the British and Germans locating in country and the Canadian's actively participating in regular liaison visits from their Bogota, Colombia liaison base.
Historically, Panama has been a pivotal point for Australian law enforcement with respect to money laundering and the international movement of cocaine to Australia. With the recent detection of significant cocaine loads into Australia emanating from or transiting Panama, liaison was instituted to facilitate inquiries and gain an understanding and appreciation of the legal and law enforcement environment within the Central American nation. More importantly, establishing liaison has garnered information relating to the type of inquiries and intelligence that can be now undertaken in Panama by AFP liaison officers.
Panama borders Colombia, Costa Rica, the Caribbean and the Pacific Ocean. The two oceans are linked by the Panama Canal, cut into a gap between the Cordillera de Talamanca and the San Blas mountain range and stretching for more than 65km (40 miles).
Panama City, the capital, is a curious blend of old Spain, modern America and the bazaar atmosphere of the East. It is divided into two parts, the old part with its narrow cobble-stoned streets including sites such as the Plaza de Francia and the President's Palace, no doubt the most impressive building in the city.
The new Panama is a bustling eclectic urban city possessing an array of towering new buildings that house the economic and banking industries of the nation. The Panama Canal to the west of the city itself attracts many visitors where an average transit takes up to 8 hours to complete.
Coln (named after the Christopher Columbus – Columbus apparently loosely translated in Spanish means Colon) is the second-biggest city and also borders the canal. Here can be found the world's second largest economic ‘free zone' which houses a huge amount of import and export businesses and is the hub of the Panamanian container industry.
To the north of Colon is Cristobel (also named after the Christopher Columbus – Christopher apparently loosely translated in Spanish means Cristobel), a rather impoverished town, but one which is increasingly becoming of interest to Australia with regards to vessels transporting narcotics using the canal to transit from the Atlantic to Pacific oceans. The road trip from Panama City to Cristobel/Colon takes about 45 minutes, that is from one side of the country to the other.
Ships all over the world are built to fit the three sets of double locks that are an essential part of this 80km-long waterway.
The Spanish conquered Panama in 1501, ostensibly because it was a pivotal trade route and collection point for the Spanish plunder of the New World. This abundance of transient wealth also attracted many foreign pirates and buccaneers such as Henry Morgan and Sir Francis Drake. The region achieved independence as part of Gran Colombia on November 28, 1821.
Panama attempted to secede from Gran Colombia four times between 1849–1855, during which time a treaty was made with the US to build the Panama Railroad.
On November 3, 1903, Panama, with US backing, seceded from Colombia and was recognised by the rest of the world as the Republic of Panama (although not by Colombia which withheld recognition until 1921 when the US agreed to pay compensation of US$25 million).
Construction of the Panama Canal began in the same year and the Panama Canal Zone either side of the canal became an American protectorate. The canal provides easy and reliable crossings from the Atlantic to the Pacific. Ships all over the world are built to fit the three sets of double locks that are part of this 80km-long waterway, which can be visited any time. The Panama Canal was completed on August 15, 1914 and is considered to be the Eighth Wonder of the World.
Significant changes were made in the Constitution of Panama in 1904, 1941, 1946 and again in 1972.
A military coup led by General (later Brigadier-General) Omar Torrijos Herrera took place in 1968, and he effectively maintained power (despite surrendering the presidency) until his death in 1981.
Several modifications were made to the Constitution in 1983 and from 1984 to 1989 the country was effectively run by the armed forces chief, General Manuel Noriega. The General's policies, especially regarding future control of the Panama Canal, and his personal activities, including alleged involvement in drug trafficking, produced very strained relations with the country's key ally, the US.
US development aid and military assistance were cut, but with little effect to Noriega's activities.
US intervention became more likely after the presidential election of May 1989. This was a straightforward fight between the pro-government Coalicion de Liberacion Nacional (COLINA) and the principal opposition movement, the Alianza Democratica de Oposicion Civilista (ADOC). The ADOC candidate, Guillermo Endara Galimany, won with 62 per cent of the vote. However, the election was almost immediately annulled without reasonable cause. After an attempted coup in October 1989, believed to have had US backing, was quickly crushed by Noriega's forces, the only means of deposing the dictator would be by military intervention.
In December 1989, US President George Bush Snr authorised an invasion of the country. After a few days of fierce fighting, mostly in the capital, the bulk of resistance to the invasion – from troops loyal to Noriega and from the paramilitary Dignity Battalions – was suppressed. Despite the relative success of the military operation, the US forces for a while failed in one key objective: the capture of Noriega himself.
On Christmas Day 1989, after delicate negotiations, Noriega was taken into the residence of the Papal Nunciate in Panama City, where he sought political asylum. Noriega's future became the subject of elaborate diplomatic manoeuvrings between the US, the Vatican and the new Panamanian Government of President Guillermo Endara. On January 4, 1990, the General finally surrendered to US forces. He was immediately flown to the US and put on trial: in April 1992 he was convicted and sentenced to 40 years imprisonment. In Panama, President Endara was installed at the head of a new administration drawn from the ADOC coalition which had won the May 1989 election. After a low start caused by chronic lack of finance, the Endara government gradually started to put the country back on its feet. Early discontent was reflected in a number of coup attempts during 1991 and 1992, although all were easily quashed.
The evident stability of civilian government has encouraged the US to keep to its schedule regarding withdrawal from the Panama Canal Zone which, under an agreement negotiated by President Carter, vacated in 1999. (The prospect of Noriega having unrestricted control of the canal was an important reason behind the American invasion).
Endara's term ended in 1994. At the presidential election held that May, the victor was Ernesto Perez Balladares, backed by a three-party centre-left coalition under the banner of Pueblo Unido. The alliance narrowly failed to gain a majority in the Asemblea Legislativa, but is operating with the support of two small parties relatively successful to date.
Due to its position as a crossroads and transportation centre, Panama's people and culture reflect its international connections. People and cultures from all over the world meet and mix there, resulting in an atmosphere of tolerance where people know how to successfully get along with each other.
Panama is a microcosm of the Americas with a mixture of Latin, European, black and Indian populations. Sixty-five per cent of Panamanians are mestizo (European-Indian mixed) and the other 35 per cent are a combination of traditional Indians, Caribbean blacks, European and Chinese. Small but dynamic, Jewish, Arab and Hindu communities play important roles in Panama's business and political community.
The presence of a large American community in the Canal Zone for almost 100 years deeply impacted the nation's culture, especially the Panamanian-American marriages that abounded after the US presence in the country. Traditionally though, there are six different Indian cultures in Panama and each one of them practices its very own ancestral customs. Each province of Panama has a varied folklore reflected through its dances, music and cuisine. In the deeply Catholic provinces of Cocle, Herrera and Los Santos churches are found on the main town square (Plaza), as was the Spanish tradition. Nata, one of the oldest colonial cities, boasts the oldest Christian church of the American continent.
For the Panamanians, the fact that their country is divided by an American presence, has been a constant source of pain and grievance in the past, however, they are prepared, as few other countries are, to play an active role in today's global village.
Given the proximity of Panama's position between South America and the North America, the banking industry is one of the nations major sources of income. There are more than 130 foreign banks represented in Panama from varying nations. Information from local and international LEAs indicate that money laundering is a significant component of many of those banks being represented in Panama. The US Drug Enforcement Administration (DEA) devotes one agent exclusively to identifying and investigating potential money laundering activity in the area.
In October 2000, Panama created legislation to allow for the formation of the above-mentioned organisation, which in principle, is the equivalent to AUSTRAC or FINCEN in the United States. The genesis in enacting the new legislation came because of an investigation by the G8 Financial Action Task Force (FATF) which looked at countries sympathetic towards allowing the creation of off-shore tax havens and money laundering. As a result, the nation of Panama was placed on a “warning list” which notified the country that if they did not introduce appropriate measures to stop “tax haven” and money laundering activities, they (G8) would place Panama on a “black list”. In doing so, this would preclude banks and financial institutions belonging to G8 member nations from continuing or establishing further contact with Panama.
Such a move would be devastating to the economy of Panama as presently there are in excess of 80 foreign banks undertaking business from within Panama.
As a result of the FATF decree, the Government of Panama moved very quickly to comply with their request.
The Government enacted two pieces of legislation and invoked a Presidential Decree to establish the mechanisms forcing financial institutions in Panama to capture and record all financial and suspect transactions and report them to the Financial Analysis Directorate. The reporting requirements to the Directorate by financial institutions are almost identical to those currently being used by AUSTRAC and FINCEN.
In short, the new legislation ensures that Panama will fully cooperate in the fight against the capital laundering product of;
• drug trafficking;
• qualified fraud;
• illegal arms trafficking;
• human trafficking;
• kidnapping;
• extortion;
• embezzlement;
• corruption of public official;
• acts of terrorism;
• robbery; and
• international trafficking of vehicles.
It is hoped that shortly the Directora de la Unidad de Analisis Financiero, Consejo de Seguridad Publica y Defensa Nacional, Panama will commence dialogue with AUSTRAC seeking to enter into a MOU to share financial information.
The current law enforcement situation in Panama is not too dissimilar to that existing in Mexico. As in most countries, law enforcement in Panama is ultimately the responsibility of the country's president. The administration and control of law enforcement is split between the portfolios of the Ministerio Publico (Attorney-General), the Ministerio de Economia (Economic Minister), the national Security adviser, the Supreme Court and the Ministerio de Gobierno y Justica (Minister of Justice).
The main agencies with which the AFP would deal with on a routine basis are outlined below. To simplify the equation, the respective governmental department responsible for administering each unit is also identified.
The Panamanian merchant fleet is one of the largest in the world, although many of the ships registered as Panamanian are foreign owned and maintain foreign crews.
This is the agency directly responsible for counter-drug enforcement in Panama. The department consists mainly of examining attorneys who are attached to drug cases at the earliest opportunity and basically control the direction and emphasis of the investigation. They often undertake overt inquiries themselves and usually are a part of the complete investigation process.
The Fiscals are appointed by and directly responsible to the Attorney-General's office of Panama and are responsible for the overseeing all drug prosecutions in Panama, each trained in the legal profession and appointed under Panamanian Law as Attorney's. They are considered to be “examining magistrates” empowered by the Supreme Court of Panama to oversee police investigations and the gathering of evidence relating to drug matters, to determine if probable cause (sufficient evidence) against an individual is present, order arrests, order detention of an individual and issue search warrants for the purposes of gathering evidence of drug activity. Once a police investigation is complete, the Fiscal attached to oversee the case reviews all the evidence put before him and determines whether the case should go before a judge. A written case (brief of evidence) is compiled and the case is put before a judge of the Supreme Court of Panama. The Fiscal then presents the case orally to the judge, in the presence of the accused and his or her defence attorney.
There is no provision in Panamanian Law to have a matter heard before a jury. The presiding judge then determines whether the charges are proved or not, if so a period of five days is set aside to for the defence to appeal the conviction, if they don't, the judge is required to furnish a written finding and sentence the prisoner within 10 days of convicting him or her. Furthermore, the Fiscals are also responsible for undertaking inquiries and gathering evidence requested of foreign law enforcement.
Under the direction of the Fiscals is the Financial Investigative Unit, which primarily undertakes investigations into money laundering, however, where the need arises they also investigate associated financial crimes such as bankruptcy.
This group falls under the control of the Ministerio de Gobierno y Justica (Minister of Justice) and is usually responsible for undertaking general policing matters such as traffic control and matters involving complaints by the general public as well as matters involving juveniles.
The Direccion de Inform-acion e Investigacion Policial (DIIP) falls within the same control mechanisms as the national police and are akin to the detective/ investigative arm of the national police. Also falling within the control of the Minister of Justice are the following Panamanian law enforcement entities:
1. Director Mutual Legal Assistance Treaty.
2. Servicio Maritimo Nacional (SMN) which are akin to the US Coast Guard and are often called upon to assist in counter-drug law enforcement.
3. Servico Aeronautico Nacional (SAN) which were previously the Panamanian Air Force but now apparently only possesses three active helicopters and are of little strategic use.
4. Direccion de Aeronautica Civil (DAC) or more commonly known akin to the US Federal Aviation Authority or Australia's Civil Aviation Authority.
5. Centro para ia Informacion y Coorinacion Conjunta (CICC) which is an entity established solely through funding by the US Government which provided funds to establish public record data bases for access by US law enforcement.
The Policia Tecnica Judicial (PTJ) is directly responsible to the Supreme Court of the Republic of Panama. It is not influenced by, or reportable to any other government body within the Panamanian Government. They are an autonomous law enforcement body and extremely trustworthy usually used by foreign law enforcement for surveillance and investigative functions.
Much of the surveillance equipment in their possession has been provided by the DEA, UK Customs and the German BKA. Although old, the PTJ Surveillance Unit possesses excellent skills; having been trained by foreign law enforcement surveillance experts and are conversant in the standard surveillance techniques and use of contemporary equipment.
At present the following foreign law enforcement agencies are present in Panama:
• US Drug Enforcement Administration situated at the US Embassy;
• UK Customs Service Drugs Liaison office situated in the British Embassy;
• German BKA situated in the German Embassy; and
• FBI situated in the US Embassy.
The RCMP has a continual liaison presence through its liaison officer network in Bogota, Colombia. Since commencing a presence in Bogota, the AFP senior liaison officer will start coverage of Australian Law Enforcement interest in Panama.
Although the Panamanian authorities offer the AFP full and complete cooperation with inquiries, as always, caution should be exercised when dealing with any foreign agency during an ongoing operation.
Although the in situ foreign LEAs seem to have overcome security problems by identifying people and investigators within certain elements of the Panamanian law enforcement community who they consider safe and trustworthy, the potential will always exist for any sensitive information to be corruptly acted upon and inappropriately used.
The AFP is well situated to capitalise on the goodwill shown by the Panamanian law enforcement community.
Definitely, liaison in this part of Central American is crucial, especially in respect to the movement of cocaine from Central and South America to Australia.
Inquiries and action can now be requested by the AFP and obtained in a relatively quick and efficient manner when directed through the appropriate channels.
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URL: http://www.austlii.edu.au/au/journals/AUFPPlatypus/2001/12.html