Panama

Panama is a Central American nation bordering the Caribbean Sea and the North Pacific Ocean, between Colombia to the south and Costa Rica to the north. Panama is a major cocaine transshipment point and primary money-laundering center for narcotics revenue, especially in the Colòn Free Zone. Although monitoring of financial transactions is improving, official corruption remains a major problem and hinders anti-money-laundering efforts. Panama has a history of corrupt political figures involved in drug-trafficking activities. Most notably, former President Manuel Noriega was a high-level drug trafficker until his 1989 capture by the U.S. military.

Although Panama is not a major drug-producing nation, it has relatively high rates of cocaine and marijuana use. Based on United Nations (UN) estimates for people age 15 to 64, 1.2 percent of [Page 628]Panamanians are annual cocaine users and 4.0 percent are marijuana users. Recently, observers note increasing use of amphetamine-type stimulants and ecstasy.

The United States has remained heavily involved in the governmental efforts to control the drug trade in Panama, even after transfer of control of the Panama Canal to Panama and withdrawal of U.S. forces. The 1989 capture of Noriega was a reversal of long-standing U.S. policy to turn a blind eye to the dictator's involvement in drug smuggling because of his strong anti-communist credentials. In 1989 the Cold War ended, and so did American support for the anti-communist drug smuggler. The capture of Noriega failed to slow the drug trade. Nine years later, when the United States and Panama cooperated in seizing Colombian drug lord Jose Castrillon Henao, the drug lord was surprised that his arrest was more than a token because he had bought immunity by contributing generously to Noriega's successor in the 1994 presidential campaign. In 2007 Panama arrested a former head of the National Maritime Service on corruption charges and arrested Colombian trafficker Jose Nelson Urrego Cardenas, confiscating his Panamanian assets.