Panamanian authorities recorded the transit of 2,100 people of "interest" to Washington in 2018.

• Of the 8,445 illegal migrants located in Darien (an increase of 20% in two years), 91% were from Asia and Africa, with goal mostly from reaching the US.

• The US Southern Command deployed helicopters in January and February 2019 to improve surveillance capabilities in the dense jungle area.

• Washington's awareness of the presence of AIS in the Central American migrant caravans last autumn prompts it to focus on the Darien Gap.

report SRA 2019 / Alex Puigrefagut[PDF version].

One of the best-known icons on the American continent is the Pan-American Highway: network of roads that runs from Argentina to the United States and even goes as far as Alaska. Between one end and the other, there is only one point where you have to get out of your car: 130 kilometres of dense vegetation between Panama and Colombia, which is truly impassable, even difficult to cross on foot. It is the Darién jungle, which is known as the Darién Gap.

Precisely because it blocks land transit between South America and Central America, it has traditionally been a area with little surveillance of migratory flows. This lack of monitoring, however, has led in recent years to a call effect of illegal immigration, mainly from Asia and Africa, which is of concern to the United States. Many of these immigrants are classified by Washington as Special Interest Aliens (SIAs), as they come from countries that, according to the US, show a tendency to promote, produce or protect criminal organisations, mostly terrorist organisations. If they emerge in Panama, they can easily use Central American migratory routes to the US, as has been denounced in the recent crisis of the caravans that departed from Honduras.

Panama' s National Migration Service recorded the passage through Darién of 8,445 illegal immigrants in 2018 (with December still to be counted), of which 5,400 were from Asia and 2,287 from Africa, which together accounted for 91 per cent of the entire contingent. This is an increase of 20 per cent in two years. Of these, 2,123 were nationals from countries the US sees as a potential terrorist threat: most were from Bangladesh (1,440), but also from Eritrea (418), Pakistan (151), Yemen (34), Somalia (32), Afghanistan (10), Iraq (10), Mauritania (10), Syria (7) and Egypt (2). At the end of 2017, the Panamanian National Border Service detained 26 Yemeni nationals with suspected links to terrorist groups.

This migration flow of people labelled as SIAs by Washington was already alerted in 2016 by the US Homeland Securitydepartment , which sent a memo to US border authorities to be vigilant.

With a focus on Darién, in June 2018 the US and Panama agreed to establish a Joint Migration Task Force (JMTF), goal to ensure more effective and comprehensive coordination to address illegal and uncontrolled immigration in the region. Security authorities from both administrations prioritised action against drug trafficking and other types of organised crime that could pose a threat to the security of both Panama and the US, as well as the region as a whole. In January and February 2019, the US Southern Command used helicopters for transports to improve surveillance facilities in Darién.

USA and Colombia

The main purpose of the JMTF created between the two States is that there can be exchange of information and resources to establish strategic border points and thus combat all subject of organised crime on the southern border of Panama, such as drug trafficking, arms trafficking, human trafficking and above all for the comprehensive monitoring of the possible penetration of illegal migrants considered CIS that may be effectively related to international terrorist organisations. In addition, for the proper functioning of the JMTF, the two governments agreed to meet bilaterally twice a year to effectively supervise and coordinate the border security groups.

Already in 2016, the governments of Panama and Colombia implemented further measures in the Binational Border Security Commission (COMBIFRON) to strengthen the fight against drug trafficking and organised crime, as well as illegal migration. These measures included the creation of two shared surveillance points between the two navies in order to control migratory flows along the border of both countries, especially in the Darién region. The area had historically been a place of influence for Colombian cartels and a rearguard for guerrilla forces, so the peace process with the FARC was an opportunity to seek greater state control.

The main problem in the Darién challenge in recent decades, according to some observers, was the passivity shown by Colombia, which gradually decreased patrolling and land control of its part of the border, leaving Panama with limited resources in the face of criminal groups, which led to a considerable increase in the illegal trafficking of drugs, arms and people along the border. This Colombian passivity was mainly due to the fact that the transit of illegal migrants did not create migratory pressure on Colombia, as the flows were towards the northern part of the continent. Although today both countries pay attention to the Darién, control of the area is still deficient, partly because maritime security is prioritised over land security, especially in the case of Colombia.

Central American caravans

The illegal passage through the Darién of people Washington considers "of interest" because they come from countries that may foment terrorism is part of international routes to the southern border of the United States. Ample evidence sample that the Darién Gap has become a strategic point for regional and US security.

The presence of individuals labelled as SIAs was at the centre of the discussion on the various migrant caravans that in autumn 2018 departed from Central America - emerging in Honduras and increasing in size as they passed through El Salvador and Guatemala - and headed for the US-Mexico border. According to the US think-tank Center for a Secure and Free Society (SFS), these caravans involved individuals from outside Central America, from the Middle East, Asia and Africa, some of whom entered the label of SIA. According to agreement with SFS, these individuals had a privileged attention in the development of the convoys, which could even indicate collusion between SIA networks and certain Central American migration channels. The same centre found that Guatemalan officials detected no less than 157 irregular migrants from other continents, at least 17 of whom were of "special interest" to the US because they came from countries such as Pakistan, Bangladesh and Eritrea.

It is difficult to establish how many people with profile SIAs actually transit through Central America to the US, as their identities are falsified in order to go unnoticed during their journey. On the other hand, the US president exaggerated the state of alarm over the large Central American caravans, because even if there were grounds for the alert, it should not be forgotten that the vast majority of Special Interest Aliens who enter the US and who are highly dangerous because of their direct connections to terrorism arrive by air and not by land. According to an explanatorystatement of the US Homeland Security department , average of ten people on the "terrorist watch list" are apprehended every day (3,700 in the last fiscal year), although few of them enter through the US-Mexico border.

Opportunities and challenges in Sino-Panamanian relations, one year after the establishment of diplomatic relations

In June 2016, Panama inaugurated the expansion of its Canal. In June 2017, the Panamanian government decided to establish diplomatic relations with China (Central America has been a traditional ally of Taiwan), thus giving rise to the flow of new Chinese investments in a Canal revitalized with the expansion. On the one-year anniversary of the establishment of relations, here is a review of the opportunities and challenges posed by the increased Chinese presence in the isthmus.

▲Container ship of the Chinese shipping company COSCO, making transit issue 2,000 in the expanded Canal, in September 2017 [Panama Canal].

article / Ximena Barria

In the last decade, the People's Republic of China has made efforts to increase its presence in different regions of the world. China's projection as a global power has meant that no region is alien to it and there are hardly any countries that do not actively seek commercial exchange with the Asian giant. Therefore, it is not surprising that China has wanted to increase its activity around the Panama Canal, and that this Central American country has established diplomatic relations with Beijing, breaking the traditional relationship with Taiwan.

Panama's privileged geography and its rapid economic growth in the region are two important aspects taken into account by China. The Panama Canal offers advantageous access to the Atlantic and Pacific oceans and about 6% of global maritime trade passes through it. At times there has been talk of Chinese interest in building a canal in Nicaragua, something that was never really on Beijing's diary . China sees Panama as an important geostrategic point from which to project its foreign policy in Latin America, which undoubtedly unsettles Washington.

On June 13, 2017, the Republic of Panama and the People's Republic of China announced the establishment of diplomatic relations. With this, Panama recognized the government of Beijing as the legitimate Chinese government and broke the previous diplomatic relations established with Taipei. The new Sino-Panamanian relations gave way to 19 agreements in various areas.

Chinese projects in the isthmus

In a country as open to trade and transactions of all subject as Panama is, the population of Chinese origin has always had a relative presence. The Chinese community in Panama is made up of some 135,000 people, which represents 4% of its 4 million inhabitants.

Since 1911, Panama had maintained diplomatic relations with China. However, after the defeat of the Chinese Nationalist Party and the victory of Mao Zedong's communism, the Panamanian State decided to maintain diplomatic relations with Taiwan, due to its capitalist stance, during the Cold War. Since 1949, Panama remained one of Taiwan's major allies until its rupture in 2017.  

Despite the recognition of Taipei, trade relations between Panama and the People's Republic of China have been increasing in recent years, generating a larger volume of exchange than that recorded between the Central American country and Taiwan.

Panama's most important economic engine is the Canal, which links the Atlantic and Pacific oceans and constitutes one of the most important routes for world trade. Canal revenues generate one third of Panama's Gross Domestic Product. Over the years, China has become an important customer of the Canal, becoming its second largest customer Username after the United States. The first ship to cross the expanded Canal, at the inauguration held in June 2016, was a vessel of the Chinese shipping company COSCO, which was awarded the honor by lottery.

China is the largest provider of the Colon Free Zone (CFZ), located on the Caribbean coast of Panama, next to the northern mouth of the Canal. It is the most important free zone in the Americas and the second largest in the world, with an annual volume of imports and re-exports of $16.16 billion. In the first semester of 2017, the FTZ imported $1.344 billion worth of goods from China. Likewise, important Chinese companies have sought to establish themselves in the FTZ taking advantage of the strategic advantages it offers.

China has also announced the construction of a container port at area in Colon, which will have facilities for receiving liquefied natural gas. The planned construction is estimated to cost $900 million. The construction will result in the first container terminal designed to handle Neopanamax ships, which have the maximum dimensions to transit the canal.

In the area of communications, the People's Republic of China expressed its interest in building a railway infrastructure connecting the capital of Panama and the province of Chiriqui, covering a distance of 400 kilometers. As for air transportation, the Air China airline committed to operate the Panama City-Beijing route twice a week. Panama has the most important air hub in Latin America and having a direct flight to Beijing represents an important opportunity to bring Asian markets closer to Latin America.

In addition, Panama has an important and diversified financial center that is attractive to Chinese banks as a strategic gateway to establish themselves in the region. The presence of Bank of China, with more than 30 years in the country, and future establishments of other entities such as Banco Industrial y Comercial, Exim Bank and China Development Bank will contribute to increase the flow of Chinese capital to Panama. This, in turn, will diversify and make Panama's banking sector increasingly dynamic.

The Panamanian challenge to take advantage of the opportunity

Ensuring that this increased relationship with China and the Asian market structurally benefits Panama and does not degenerate into a future status of dependence presents important challenges for a country that is in the process of development. Panama will have to increase productivity in sectors such as agriculture and industry, train more staff and create a transparent framework of financial institutions.

The agricultural sector presents marketing difficulties and a lack of agricultural policies to produce and sell crops at fair prices. In recent years, there has been a shortage of land for crop marketing purposes as a result of droughts and floods. Another challenge is food imports, since many imported foreign products are cheaper and this causes a drop in the prices of domestic products, which makes their production unprofitable for the farmer.

The increase in industrial productivity goes hand in hand with the effort of training of a better human capital. Currently, in the Panamanian republic there is a lack of preparation of people who can manage important companies. In 2015, the issue of enrolled in universities reached only a meager issue of 160,000 students. The Panamanian government should promote technical training projects and scholarships to increase this issue so that in the long term deadline there will be more staff trained for the new companies that will arrive.  

The Panamanian financial structure should also be prepared to create new legislation that will contribute to legal certainty. In order to harmonize the financial sector with international anti-money laundering conventions, the Panamanian government should establish tax reforms that promote fiscal transparency. The entry of foreign banks should be regulated more effectively. The discussion to consider classifying tax evasion as a tax crime will present an important challenge for the country to consider.

High levels of corruption in public works projects and impunity from justice in the Latin American region continue to challenge attempts to successfully eradicate fraud in government dealings   

Odebrecht, one of the most important construction and engineering companies in Brazil, confessed to offering numerous bribes to political leaders, political parties and public officials. Its major aim was to obtain contracts for major public infrastructure projects within the region. The investigation has revealed a complex network of bribery that has become one of the largest corruption scandals in Latin American history. The B budget boosts in the region, thanks to commodities' "golden decade," occurred within a weak precedent for the Rule of Law and therefore lax anti-corruption measures permitted widespread illicit profits for major government contractors and inflated costs for tax payers.

ARTICLE / Ximena Barria [English version] [Spanish version].

Odebrecht is a Brazilian conglomerate that through several operational headquarters conducts businesses in multiple industries. It dedicates to areas such as engineering, construction, infrastructure and energy. Its headquarters is located in Brazil in the city of Salvador Bahia. The company operates in 27 countries of Latin-America, Africa, Europe and the Middle East. Throughout the years, Odebrecht has concluded contracts with governments to build public works, with the majority of its projects in the Latin-American region.

In 2016, United States Department of Justice published allegations which detailed evidence of the company bribing public officials in twelve different countries, ten of them in Latin America: Argentina, Brazil, Colombia, Ecuador, Guatemala, Mexico, Panama, Peru, the Dominican Republic and Venezuela. As a result, a full investigation was launched after Odebrecht's senior executives confessed to bribery once discovered.

The corporation granted millions of dollars to local public officials from the countries previously mentioned, in exchange for obtaining public contracts to gain benefits from the projects constructed. Its purpose was to obtain a competitive advantage which permitted them to retain local governmental business in different countries.

In order to cover up illegal transactions, Odebrecht created fictitious, anonymous societies in such places as Belize, the Virgin Islands and Brazil. The company elaborated a secret financial structure to camouflage its payments. The investigation of the United States Department of Justice estimated that the bribes accounted for a total of $788 million dollars. Utilizing this illegal method, and contrary to every political and business code of ethics, the company signed one hundred projects generating $3.336 billion dollars in profits.

A weak judicial branch

This issue, also known as the Odebrecht Case, has created major divisions within Latin American societies. Its citizens consider that these acts should not remain unpunished, as countries need a stronger judicial branch to cement a strong and respected Rule of Law.

According to World Bank indicators, none of these ten Latin American countries impacted by this network of bribes hold 60% or more of the standard efficacy of the Rule of Law and control of corruption. Hence, this explains how the construction company was able to successfully bribe politicians.

The judicial independence and its efficacy are essential for the resolution of acts with these characteristics. The correct exercise of justice moulds an appropriate Rule of Law, preventing that illegal acts or other political decisions could infringe upon it. Contrary to this ideal configuration, the countries who were involved in the Odebrecht case, do not possess optimal judicial independence.  

Thus, according to the Global Competiveness Report for 2017-2018, the majority of the countries affected obtained a low score with respect to the independence of their courts. These figures indicate that the countries lack of an effective judicial system to judge the alleged suspects involved in this case. With the case of Panama and the Dominican Republic, they ranked in the places 120 and 127 respectively, according to the judicial independence of a list of 137 countries.

One of the problems suffered by the Judicial Branch of the Republic of Panama is that it has high number of pending cases awaiting trial at the Supreme Court of Justice. This congestion makes it difficult for the supreme court to work effectively. The high number of processed cases doubled between 2013 and 2016, as the Criminal Chamber of the Court processed 329 cases in 2013 and in 2016 they processed 857. Although the Panamanian Judicial Branch has expanded its budget, this has not represented a qualitative increase in its functions. These difficulties could explain the decision of the court to reject an extension of the Odebrecht investigations, although this may imply some impunity. In 2016, there were only two detainees in the Odebrecht case. In 2017, of the 43 defendants who could be involved in the acceptance of bribes valued at $60 million dollars, only 32 were prosecuted.

The Dominican Republic also faces a similar situation. According to a 2016 survey, only 38% of Dominican citizens trust their justice system. The low percentage may be a result of the fact that the Supreme Court judges who were elected are active members of political parties, something that obscures the credibility of justice and its independence. In 2016, Dominican courts only prosecuted one person related to the Odebrecht case, whereas the US Supreme Court estimated that the Brazilian company had given 92 million dollars in Dominican political bribes, one of the highest amounts outside of Brazil. In 2017, the Supreme Court of the Dominican Republic ordered the release of 9 of 10 suspects implicated in the case due to insufficient evidence.

The need for improved coordination and reform

In October 2017, public prosecutors from Latin America met in Panama City to share information on money laundering, especially related to the Odebrecht case. The officials expressed the need to not leave any case unpunished, in order to solve one of the biggest political, economic and judicial problems in the region. Some prosecutors reported having suffered threats in their investigations. The meeting was valued in a positive way, since it highlighted the need in for greater fiscal coordination and legislative harmony in Latin America. However, it is important to note that the Dominican Republic was absent from that meeting.

All awareness of the public ministries of Latin America is essential in view of the correlation observed among the countries affected by the Odebrecht bribes and their poor position in the indices provided by different international organizations and research centers. The ineffective Rule of Law shows in the lack of control over corrupt companies like Odebrecht, where they succeeded in their bribery policy to obtain a competitive advantage.

The shortcomings of the judicial systems in countries such as Panama and the Dominican Republic make it possible for public officials to go unpunished for the crimes they committed. In addition, the Odebrecht case has a great impact in the region, and could still impede the judicial process if effective reforms are not taken in each country.

High levels of corruption and impunity in the region make it difficult to eradicate millionaire bribes in public procurement contracts

The confession of the construction and engineering company Odebrecht, one of the most important in Brazil, of having delivered large sums as bribes to political leaders, parties and public officials for the awarding of works in various countries in the region has been the biggest corruption scandal in the history of Latin America. The B budget increase during the "golden decade" of raw materials occurred in a framework of little improvement in the effectiveness of the rule of law and control of corruption, which led to high levels of illicit deviations in public contracts.

article / Ximena Barría [English version].

Odebrecht is a Brazilian company that conducts business in multiple industries through several operating sites. It is engaged in areas such as engineering, construction, infrastructure and energy, among others. Its headquarters in Brazil are located in the city of Salvador de Bahia. The business operates in 27 countries in Latin America, Africa, Europe and the Middle East. Over the years, the construction company has participated in public works contracts in most Latin American countries.

In 2016, the U.S. Justice department published a research denouncing that the Brazilian company had bribed public officials in twelve countries, ten of them Latin American: Argentina, Brazil, Colombia, Ecuador, Guatemala, Mexico, Panama, Peru, Dominican Republic and Venezuela. The research was developed from the confession made by Odebrecht's own top executives once they were discovered.

The company provided officials in these countries with millions of dollars in exchange for obtaining public works contracts and benefiting from the payment for their execution. The business agreed to submit millions of dollars to political parties, public officials, public candidates or persons related to the Government. Its purpose was to have a competitive advantage that would allow it to retain public business in different countries. 

In order to cover up these illicit capital movements, business created fictitious corporations in places such as Belize, the Virgin Islands and Brazil. The business developed a secret financial structure to cover up these payments. The research of the U.S. Justice department established that bribes in the aforementioned countries totaled US$788 million (almost half in Brazil alone). Using this illegal method, contrary to all business and political ethics, Odebrecht obtained the commissioning of more than one hundred projects, the execution of which generated profits of US$ 3,336 million.

Lack of an effective judiciary

This matter, known as the Odebrecht case, has created consternation in Latin American societies. Its citizens consider that in order for acts of this nature subject not to go unpunished, countries must have greater efficiency in the judicial sphere and take more accelerated steps towards a true Rule of Law. 

From agreement with World Bank indicators, none of the ten Latin American countries affected by this bribery network reaches 60% of effectiveness of the rule of law and corruption control. This would explain the success of the Brazilian construction company in its bribery policy.

Judicial independence and its effectiveness is essential for the resolution of facts of these characteristics. The proper exercise of justice shapes a proper rule of law, preventing the occurrence of illicit acts or other political decisions that may violate it. Although this is the ideal, the countries involved in the Odebrecht case do not fully comply with this due judicial independence.

Indeed, according to the Global Competitiveness Report for 2017-2018, most of the affected countries obtain a leave grade regarding the independence of their courts, which indicates that they lack an effective judiciary to judge the alleged people involved in this case. This is the case, for example, with Panama and the Dominican Republic, ranked 120th and 127th, respectively, in terms of judicial independence, out of a list of 137 countries.

One of the problems suffered by the Judicial Branch of the Republic of Panama is the high issue of files handled by the Supreme Court of Justice. This congestion makes it difficult for the Supreme Court to work effectively. The high number of processed files doubled between 2013 and 2016: the conference room Criminal Court processed 329 files in 2013; in 2016 there were 857. Although the Panamanian Judicial Branch has improved its budget, that has not represented a qualitative increase in its functions. These difficulties could explain the Court's decision to reject an extension of the research, even though this could mean some impunity. In 2016, there were only two detainees for the Odebrecht case. In 2017, of the 43 defendants who could be involved in the acceptance of bribes valued at US$60 million, only 32 were prosecuted.

The Dominican Republic is also at a similar status . According to a survey of 2016, only 38% of Dominicans trust the judicial institution. This low percentage may have been contributed to by the fact that active members of political parties were elected to serve as Supreme Court judges, something that tarnishes the credibility of the judiciary and its independence. In 2016, Dominican courts only inquired about one person, when the U.S. Supreme Court estimated that the Brazilian business had given $92 million in political bribes, one of the highest amounts outside Brazil. In 2017, the Supreme Court of the Dominican Republic ordered the release from prison of 9 out of 10 allegedly involved in the case due to insufficient evidence.

Need for greater coordination and reform

In October 2017, public prosecutors from Latin America met in Panama City to share information on money laundering, especially in relation to the Odebrecht case. Officials expressed the need to leave no case unpunished, thereby contributing to solving one of the biggest political, economic and judicial problems in the region. Some prosecutors reported having suffered threats in their investigations. All of them valued positively the meeting, as it highlighted the need for greater fiscal coordination and legislative harmony in Latin America. However, it is important to note that the Dominican Republic was absent from meeting.

Any awareness of public ministries in Latin America is essential given the correlation observed between the countries affected by Odebrecht bribes and their poor ranking in indexes provided by different international organizations and centers of research. Ineffective rule of law and lack of control of corruption enable companies like Odebrecht to succeed in their bribery policy to gain a competitive advantage. 

The shortcomings of the judicial systems in countries such as Panama and the Dominican Republic, in particular, may make it possible for public officials to go unpunished for crimes committed. In addition, the Odebrecht case, of great magnitude in the region, could further congest judicial activity if effective reforms are not made in each country.