13th October 2018


Bristol Live on 12th October reported on a husband and wife who arrived with 11,000 king size cigarettes and 140.5 kg of tobacco on a flight from Tenerife, 561 times more tobacco and 54 times more of cigarettes than allowed.



On 12th October, Shearman & Sterling published an article saying that the FCA has issued a report on the outcome of its thematic review into money laundering and terrorist financing risks in the e-money sector; which focuses on e-money products, including prepaid cards and digital wallets. The AML/CFT controls of 13 authorized e-money institutions and registered small electronic money institutions – but not activities that are not regulated by the FCA or money remittance services.  It found that the majority had effective AML/CFT controls in place.

The report is at –




The Finance Feeds blog on 12th October reported that Norway’s Financial Supervisory Authority has updated its guidance to virtual currency businesses regarding the implementation of the new AML rules which will also apply to virtual currency exchange businesses.  There will be a transitional period, with the registration deadline being January 15th.



Caribbean News Now on 12th October reported that a diplomatic passport holder for Antigua and Barbuda, Alex Nain Saab Morán, appointed as an “economic envoy” 4 years ago, has confirmed that 2 former employees of a company in which he was a partner, and which closed 10 years ago, have been arrested by Colombian authorities for alleged money laundering and fraud, but said that he expects them to be released shortly since the charges are not sustainable.



Stuff on 12th October reported the story of Qiannan Tang, a marketing manager at a financial services company, MCM Group, where her role also involved processing overseas money transfers, is accused of laundering more than $318,000 of drug money between December 2016 and March 2017 to overseas bank accounts.



Forbes on 12th October reported that a Kuwaiti investment fund is calling on the Kuwaiti government to clarify its position over close to $500 million of the fund’s assets in a Dubai bank, after growing concern about possible efforts by some Kuwaiti individuals to seize the money.  The money from The Port Fund was frozen while being transferred through Noor Bank in Dubai in November at the request of the Kuwaiti authorities.  The situation followed the jailing in Kuwait of Russian businesswoman Marsha Lazareva, managing director of KGL Investment (KGLI), which sponsored The Port Fund with allegations of corruption and embezzlement.



WPTV in Florida on 12th October reported that Evelio Suarez, 53, a South Florida cheque-casher had pleaded guilty to laundering cash from identity theft, health care and mortgage fraud 2013-2015.  She is said to have controlled a chain of cheque-cashing stores



Reuters reported on 13th October that Kenya’s former sports minister will be charged in relation to the siphoning of funds meant for athletes who competed in the 2016 Olympics in Brazil.  Hassan Wario, the sports minister at the time, and 5 other former senior officials have faced allegations.


The Economic Times in India reported on 13th October that the case involving Theranos, the now-defunct blood-testing start-up, could be bigger than was first thought.  The company was once valued at as much as $9 billion but collapsed amid what prosecutors describe as a massive fraud masterminded by CEO Elizabeth Holmes and former company president Ramesh “Sunny” Balwani to dupe investors, doctors and patients.  Holmes settled a SEC civil suit, while Balwani continues to fight the SEC.



Rferl on 13th October reported that an Al-Qaeda-linked militant group is using Iran as its main transit point for illegal charcoal exports from Somalia, enabling the group to earn millions of dollars in profits, a report from a UN sanctions committee claims.




The Stimson Center in the US has published in August a book containing an analysis of how drones relate to various international regulatory regimes.  This report offers a particular focus on the international Arms Trade Treaty (ATT) and examines the ways in which drone transfers and use are regulated by the ATT.  For the purposes of this paper, references to drone(s), unmanned aircraft, and unmanned aerial vehicle(s), or UAV, will be made interchangeably.  It says that UAV, more commonly referred to as drones, have become a mainstay of military operations around the world.  They can be fitted with, or used as, weapons, or used as surveillance or reconnaissance types with cameras, sensors or sophisticated electronics.  Governments may be more willing to resort to the use of lethal force via armed drones, thereby lowering the threshold for engaging in armed conflict.  It says that new technological developments – focused on miniaturising and swarming, for example – may lead to an expansion of demand and of drone capabilities.  These new technological developments may also present additional challenges related to use and control.  Regardless of their type, as drones continue to proliferate around the world, it will be important for States to assess the impact of increasing drone use and understand the mechanisms in place that regulate the transfer and use of drones.  The report explains that the ATT is the first treaty to establish legally binding standards for regulating the global trade in conventional weapons.  The ATT was adopted by the UN General Assembly in April 2013, entered into force in December 2014, and aims to increase transparency and promote responsibility and accountability in international arms transfer decisions.  The ATT covers 8 categories of conventional weapons: battle tanks, armoured combat vehicles, large-calibre artillery systems, combat aircraft, attack helicopters, warships, missiles and missile launchers, and small arms and light weapons.  Though the text of the ATT does not provide definitions for these categories of weapons, Article 5.3 requires that national definitions of these weapons systems “not cover less than the descriptions used in the UN Register of Conventional Arms” at the time of the treaty’s entry into force.  It argues that, although the ATT does not explicitly reference drones within its scope, the treaty does implicitly apply to drones.  53 UN Member States, including the US, had signed up to the declaration and agreed to begin a process to develop global standards on export and subsequent use of armed drones, and the US led a small group of states to build on the joint declaration and draft more detailed, politically-binding standards for the transfer and use of drones.  However, these efforts have stalled in the first 18 months of the Trump administration.




 In this paper I set out to consider the introduction of strategic trade controls in and by the Republic of Panama, for the purposes of non-proliferation, and the adoption of the EU list of dual-use items and establishment of a national register of businesses and facilities involved in the handling of dual-use items in Panama.  I also consider the role of, or connection to, various other documents and sources of information and guidance – including the national risk assessment published in 2017, the 2018 mutual evaluation of Panama against FATF standards, the stated purposes of UN Security Council Resolution 1540 and the UN’s 1540 Committee, the Action Plan submitted to the 1540 Committee by Panama in 2017, and the guidance on the implementation of strategic trade controls by the World Customs Organisation (WCO).


The importance of strategic trade controls to Panama cannot be overstated.  It faces threats on a number of fronts, not just the movement of goods on ships using the Panama Canal[1] (such as in the 2013 case involving the North Korean ship, Chong Chon Gang)[2], but also –

  • through export, re-export and transhipment using its 14 private ports and 14 state-owned and operated ports, with 3 major container/ro-ro terminals on the Atlantic/Caribbean coast and 2 on the Pacific coast. Cargo can be off-loaded, reloaded, and transported on via the Canal or by road or rail across the isthmus[3]. This could also involve and affect the country’s substantial logistics and storage sector;
  • through use (or abuse) of vessels on its shipping register, the world’s largest, having over 8,000 vessels;
  • through the Colon Free Trade Zone (CFZ)[4] or “Zona libre”, the second largest freeport in the world;
  • from companies established in, or administered from, Panama and involved (deliberately or unsuspectingly) in the evasion of trade controls; and
  • from the involvement of its significant banking (including the International Financial District of Panama)[5] and insurance sectors.

The Canal itself, whilst an international thoroughfare for shipping handling more than 3% of the world’s trade, is not an international shipping lane, but rather a waterway within the national territory (and territorial waters) of the Republic of Panama[6].  Thus, any goods on vessels entering the Canal, even if not offloaded at any time in the country, could be said to be “in transit” through Panama.

While 10% of Panama’s GDP is said to be due to the Canal, around 65% is attributable to exports of goods and services.  In 2013, it was reported that Panama exported $17.5 billion worth of goods – equivalent to around 42% of GDP, with services comprising a further $9.8 billion, or 23% of GDP[7].  The majority of Panama’s exported services are related either directly or indirectly to the Panama Canal and the CFZ.

The World Customs Organisation (WCO) has said that customs authorities face two strategic threat scenarios: the possibility of the supply chain being used as a delivery system for a weapon of mass destruction (WMD) – the “bomb in a box” scenario – and the possibility of the supply chain being used to transport the materials, equipment, and components needed to produce a weapon[8].  Both of these scenarios represent a real threat to Panama and, additionally, any threat to the Canal (from the “bomb in a box”) would also represent a very serious threat to the world economic framework.


These are controls placed on the import, export, transfer etc of items that may that have legitimate civilian uses, but can also be used in the production or delivery of WMD or other conventional defence-related items (hence their being termed “dual-use items”).   Whilst export controls are a vital element, they are not the only one.  The controls also complement those on the supply and movement of military goods and technology, and the enforcement of trade sanctions, arms embargoes etc imposed by the UN, the EU or other international or regional bodies, or by individual countries.

The term WMD encompasses not only nuclear and radiological weapons, including radiological dispersal devices (the so-called “dirty bomb”), but also chemical and biological weapons.  The controls form an important part of international non-proliferation efforts, and involve not just physical controls on the items themselves, but also on related activities such as brokering and financing and on intangibles, such as technology transfer.

There are a number of relevant international treaties and agreements, and UN Security Council Resolution 1540 of 2004 (UN SCR 1540) is a crucial element, requiring states to take appropriate action to prevent the acquisition and use of WMD by non-state actors (see below for more detail on UN SCR 1540).

The proper enforcement of strategic trade controls not only has the obvious benefits for regional and international security, it also helps to protect the reputation and integrity of the country and its business community, and may have direct economic benefits by improving eligibility for access to, or involvement in, high-tech or sensitive technologies, projects and business ventures.


In May 2017, Panama enacted Executive Decree 81[9] (“the Decree”) for the control of trade and dual-use material for reasons of national and international security – in other words for the purposes of preventing proliferation of WMD and their delivery systems.  The Decree formed part of the Action Plan submitted to the UN by Panama in October 2017 outlining how it intended to implement UN SCR 1540, as amended[10].  As the Action Plan stated, UN SCR 1977 (2011) had invited member states to prepare on a voluntary basis a national implementation action plan for implementing UN SCR 1540 and to submit those plans to the UN’s 1540 Committee.

The aim of UN SCR 1540 is preventing chemical, biological, radioactive and nuclear (CBRN) weapons, as well as their means of delivery and related materials, from coming under the control of non-state actors[11], terrorist groups or organised crime and it urges member states to refrain from providing them with any form of support.  It also urges member states, in accordance with their national procedures, to adopt and enforce appropriate effective laws which prohibit any non-state actor to manufacture, acquire, possess, develop, transport, transfer or use chemical, biological, radioactive or nuclear weapons and their means of delivery, and related materials, for terrorist purposes or organised crime, as well as attempts to engage in any of the activities, participate in them as an accomplice, assist them or finance them.

Panama was already party to various relevant international treaties and agreements concerned with the control of CBRN weapons and materials – the Nuclear Non-Proliferation Treaty, the Biological and Toxic Weapons Convention, the Chemical Weapons Convention, and the Convention on the Physical Protection of Nuclear Materials.

Wisely, Panama chose to frame the new law so as to target both states and non-state actors.  It was required by the Decree to adopt a list of dual-use goods[12], and to make the transport, transfer, management, trade, import, export and re-export subject to control.  The Decree also called for the developing of a system to licence such goods, as well as outreach and educational efforts, and enforcement – all of which was to be outlined in an action plan required by the Decree.


Two bodies were created by the Decree –

  • National Council on Secure Trade (NCST) – comprised of representatives from several ministries[13]; its roles include approval of the strategic trade control regulations (this is its main role), revoke licences, and manage inclusion on the national register created under the Decree; and
  • Technical Committee on Secure Trade and Transport (TCSTT) – comprised of members from the same ministries as the NCST, plus a representative of the Panama Canal Authority (PCA)[14]; its roles are to provide technical and administrative support, chiefly by drafting and updating the strategic trade control regulations and the National Control List, and developing and maintaining the licensing process. The latter role includes making decisions on the granting of licences.

Also in existence and of relevance are the –

  • Container Technical Inspection Unit – which uses radiation portal monitors (RPM) at the main coastal ports. These devices are passive, non-intrusive devices used to screen objects and persons passing through them for nuclear and radiological materials[15];
  • Inter-Institutional Risk Analysis Office – for the analysis of information in cargo manifests to determine the risk profiles of cargo, vessels, and economic agents;
  • Joint Port Control Units (JCPU) – Panama is also a party to the Global Container Control Program[16], an initiative of the UN Office on Drugs and Crime and the WCO designed to improve container traffic security by providing training and promote co-operation among member nations. One of its elements is the creation of JCPU which specialise in the inter-agency profiling of port units at select container terminals in seaports or dry ports, and in Panama JPCU have been established at Balboa which covers the Port of Balboa; and in Colon which covers Port of Manzanillo, Colón Container Terminal and Port of Cristobal;
  • National Customs Authority – responsible for administering the policies, guidelines and provisions governing the customs system. It controls and supervises customs operations and the flow of goods entering, remaining in or exiting the country and those goods covered by permanent or temporary customs regimes, customs warehouses, free trade zones and duty-free stores.  It employs a “single window” system[17], the Sistema Integrado de Gestión Aduanera (SIGA) and, since 2017, the Panamanian Marine Authority and the Panama Canal Authority implemented Ventanilla Única Marítima de Panamá (VUMPA), an electronic system that requires ships to produce required documentation in advance of their arrival so that government agencies can conduct risk assessment and be ready for inspection by a single official.  A 2016 report found that SIGA could be adapted to be used to provide a strategic goods licensing system; and
  • Panama Canal Authority (PCA)[18] – which can deny a vessel transit of the Canal if the condition or character of the cargo “is such as to endanger Canal structures”, which must be taken to include potentially dangerous cargo, or “which might render the vessel liable to obstruct the waterway”, which again might include a dangerous cargo sinking or rendering the ship uncontrollable. The Regulation on Navigation in Panama Canal Waters requires a minimum of 96-hour notice of intent to transit with dangerous cargo (and similarly, cargo comprising hazardous waste is also required to be notified to the PCA.  It also requires all vessels transporting radioactive materials through the Canal to comply with applicable requirements[19], as published in the current edition of the IMDG Code[20] and there are specific requirements for certain types of radioactive cargo[21] with, for example, 30 days’ notice of fissile material carried as cargo – for other vessels intending to arrive at Panama Canal waters all cargo carried on board must be declared at least 96 hours prior to their arrival.


The Decree requires a National Registration, Tracking, and Inventory System for Economic Agents of Dual-Use Goods.  This will entail a national register, and any “economic agent” wishing to participate in “handling”[22] dual-use goods will have to be registered.  It will be an electronic platform, managed by TCCST.

TCCST will also develop risk profiles of applicants for inclusion on the register.

At the time the Decree came into force the evidence appeared to show that Panama did not have a significant number of companies that imported or exported dual-use items.  Nevertheless, outreach and training would be needed to ensure that both officials and business was aware of the new controls, the requirement for registration when appropriate, and, in particular, the application of the controls to intangible technologies.

Panama is receiving assistance from the US Government under the Export Border and Related Security (EXBS) programme[23], with a focus on legal, licensing, and enforcement training, along with providing information systems and equipment.  There is also training and assistance provided under the Global Container Control Program[24].


Rather than compile its own list of items that should be subject to control, it was proposed that Panama should simply adopt the dual-use control list in use in the EU.  This had the advantages of complying with all the relevant international non-proliferation agreements, such as –

  • the Wassenaar Arrangement[25] on transfers of conventional arms and dual-use goods and The selection criteria for dual-use items under the Wassenaar Arrangement is that dual-use goods and technologies to be controlled are those which are major or key elements for the indigenous development, production, use or enhancement of military capabilities;
  • the Australia Group[26], the aim of which is the harmonisation of export controls, to ensure that exports do not contribute to the development of chemical or biological weapons;
  • the Nuclear Suppliers Group[27], a group of nuclear supplier countries that seeks to contribute to the non-proliferation of nuclear weapons through the implementation of two sets of Guidelines for nuclear exports and nuclear-related exports; and.
  • the Missile Technology Control Regime[28], a voluntary partnership of 35 countries to prevent the proliferation of missile and unmanned aerial vehicle (UAV or “drone”) technology capable of carrying above 500 kg payload for more than 300 km.

It is also regularly updated, and benefits from the input of all the Member States, several of which are themselves major producers of military and dual-use goods and technology.

Another useful factor is that the EU correlates the codes allocated to the dual-use items to their classification codes (“CN Codes” or commodity codes), 8-digit codes used to identify the items for customs purposes on declarations and other documentation[29].  These classification codes themselves correlate to the codes used worldwide under the Harmonised System (“HS Codes”)[30].

The 6-digit HS Code directly equates to the first 6 digits of the CN Code, allowing the items in question to be identified.  The first 2 digits identify the chapter the goods come under (e.g. Chapter 09 – Coffee, Tea, Maté and Spices).  The next 2 digits identify groupings within that chapter (e.g. 09.02 – Tea, whether or not flavoured).  The final 2 digits are even more specific (e.g. 09.02.10 – Green tea: not fermented).  Up to the 6-digit level, all countries classify products in the same way (a few exceptions exist where some countries apply old versions).

A decision was made in early 2018 for Panama to adopt the EU list.

Note that the EU uses the term “dual-use item” and not “dual-use goods”.  This emphasises that the controls and the control list deals with not just physical goods, but also software and technology – and therefore can cover intangible “exports” (such as the sending of designs or data) as well as the physical export of goods themselves.

Furthermore, since 2011 the EU Regulation prohibited exports of dual-use goods to destinations subject to an arms embargo imposed by the EU, OSCE[31] or UN.

The EU currently has in development a “recast” of the Regulation[32] which contains the dual-use list.  This recast, amongst other things, introduces a new “human security” dimension to export controls, to prevent the abuse of certain cyber-surveillance technologies by regimes with a questionable human-rights record, and use OECD-based “due diligence” guidelines to ensure that their goods cannot fall into the wrong hands.  The proposals also formally introduce standardised operational internal control programmes (ICP) as part of the assessment in the granting and control of export authorisations and licences[33] (such ICP were previously required by only some EU Member States).

It can be expected that the risk profiling and risk assessments undertaken by the Panamanian authorities would also take into account the existence and worth of such ICP.

The EU Regulation also includes a ‘catch-all clause’ for items which could be used in connection with a WMD programme but may not be included in the list of controlled items[34], and controls on brokering dual-use items and their transit through the EU[35].  It is unclear if either of these aspects are dealt with in the Panamanian law.

Under the EU Regulation, dual-use items are goods and technology which have both a legitimate civil use, but have also a use, or potential use, for military purposes, or for use in connection with weapons of mass destruction.  Goods affected include all those which can be used for non-explosive uses (as those with explosive uses would be caught by the general controls on military and paramilitary and related goods), and those relevant to the development, production or use of nuclear weapons and other weapons of mass destruction.


In December 2016, the relevant authorities in Panama approved a National Risk Assessment on Money Laundering and the Financing of Terrorism (NRA), which was published in early 2017.  The NRA identified as the main criminal that to Panama as being transnational organised crime, using Panama for the transit or flow of several activities, such as drug trafficking, human trafficking, gunrunning, etc; and that the main domestic threats for money laundering are drug trafficking, corruption, financial crimes and copyright crimes such as trademark counterfeiting and smuggling.  The export, transit or transhipment of strategic goods was not highlighted as a significant threat.  However, it did note that the most vulnerable sectors for money laundering in Panama would be the sectors related to foreign trade, such as the free trade zones, especially the Colon Free Zone.  It said that there was no clear terrorism threat in Panama (at least to Panama itself, whereas an attack on the Canal could equally be a means of damaging the US, China or other major beneficiary from its services, or as merely a “spectacle” to gain publicity).  It was the financing of terrorism that was seen as a greater threat.


In January 2018, GAFILAT, the regional FATF-style body[36], published its Mutual Evaluation Report (MER) of the Republic of Panama[37] following an on-site visit made in 2017.

One of the key findings of the MER was that illicit funds derived from threats other than tax crimes, within or without the country, as identified by the NRA (i.e. drug, gun and human trafficking, smuggling, financial crimes, corruption, and the like) were not adequately faced due to the significant vulnerabilities disregarded by the 2017 National Strategy[38] in the main risk sectors (corporate services, free zones, real estate and financial sectors).

However, the MER, like the NRA and the National Strategy focussed primarily on money laundering/ financing of terrorism (AML/CFT) risks, with little or no mention of countering proliferation financing (CPF), and with no direct reference to non-proliferation activity involving strategic trade controls.  Even then, the MER criticised the NRA, saying that while there were mechanisms in place to prevent the use of the financial system for terrorist financing (TF) and to implement targeted financial sanctions related to TF and proliferation, the NRA had in fact evaluated mainly terrorism risk (which is viewed as being low, there being no domestic, homegrown terrorism threat) and not TF risk.  The MER did call on Panama to pay greater attention for proliferation financing risks – though it did award the country a “substantial” rating for effectiveness under the relevant Immediate Outcome (target) IO.11 and “largely compliant” for the relevant FATF Recommendations 5, 6, 7 and 8.

In the section of the MER on proliferation financing, the case study used is that of the North Korean ship, Chong Chon Gang referred to in the introduction to this paper (see below).

The MER did note that the Panamanian shipping registry had cancelled the registration of 88 vessels (and published the details) linked to North Korean people or companies – which perhaps indicated a degree of proactive action on the part of the authorities in the non-proliferation field.



UN SCR 1540 imposes binding obligations on all member states to adopt legislation to prevent the proliferation of nuclear, chemical and biological weapons, and their means of delivery, and establish appropriate domestic controls over related materials to prevent their illicit trafficking.  In particular, it –

  • aims to prevent chemical, biological, radioactive and nuclear (CBRN) weapons, as well as their means of delivery (such as missile systems) and related materials, from coming under the control of non-state actors, terrorist groups or organised crime;
  • urges member states to refrain from providing such non-state actors, terrorist groups or organised crime with any form of support;
  • urges member states, in accordance with their national procedures, to adopt and enforce appropriate effective laws which prohibit any non-state actor to manufacture, acquire, possess, develop, transport, transfer or use CBRN weapons and their means of delivery, and related materials, for terrorist purposes or organised crime, as well as attempts to engage in any of the foregoing activities, participate in them as an accomplice, assist them; and
  • urges member states, in accordance with their national procedures, to adopt and enforce appropriate effective laws which prohibit the financing of CBRN weapons, their means of delivery, and related materials,

and UN SCR 1977 (2011) invites member states to prepare (on a voluntary basis) national implementation action plans for implementing UN SCR 1540 and to submit those plans to the UN’s 1540 Committee[39] (which was established pursuant to UN SCR 1540).

The UN Office for Disarmament Affairs[40] provides support for activities of the 1540 Committee, which is tasked to report to the Security Council on the implementation of UN SCR 1540 and focusing on 3 key areas –

  • facilitation of national implementation activities including through regionally co-ordinated approaches;
  • co-operation between international, regional and sub-regional organisations; and
  • effective partnerships of key stakeholders including civil society, private sector and academia.

The 1540 Committee employs what it terms the “1540 Matrix”, which has fields representing the requirements of UN SCR 1540 alongside which are the measures that member states have taken in respect of these requirements.  A matrix for each member state has been prepared by the group of experts.  The information in the matrices originates primarily from national reports provided by the member states, complemented by official government information, including that made available to intergovernmental organisations.  The matrix thus provides a snapshot view of the implementation of UN SCR 1540 by that member state.  The latest for Panama available online was last updated in September 2013[41], so is somewhat out of date when one takes into account steps taken by the country – both for the purposes of its 2017 Action Plan for implementation of UN SCR 1540, as well as for the NRA and following the MER report – some of which are mentioned in this paper.


This guide[42] was produced to provide WCO member states with practical assistance related to enforcing strategic trade controls.  It was designed to act as a guide in the development and review of a country’s Strategic Trade Control Enforcement (STCE) processes and procedures and provide a framework for training along those lines.  It is divided into two principal sections –

  • for senior customs managers and policy officials: on the importance of strategic trade controls, the role of customs, and how to establish STCE procedures and processes and create conditions for their success; and
  • for operational customs officers: on techniques and outlining the major functions that comprise the overall strategic trade control process and several related activities.

Annex II to the Guide provides a concise background on WMD that largely determine what goods are considered strategic in the international context, and Annex III provides profiles of many strategic goods, organised so as to correlate to HS Codes to enable cross-referencing.  Helpfully, Annex VI provides a glossary of terms used.


This Action Plan was lodged with the Chair of the 1540 Committee at the UN in October 2017[43].  It set out 5 basic strategic goals –

  1. to enact laws to prevent and punish the manufacture, acquisition, possession, development, transport, transfer or use of nuclear, radioactive, chemical or biological weapons and their means of delivery, and related materials, particularly for terrorist purposes, as well as attempts to engage in such activities, participate in them as an accomplice, assist them or finance them;
  2. to ensure stricter enforcement of administrative rules to discourage, detect, prevent and punish the above, including through financing; – this included adoption of a suitable national list of dual-use goods (achieved through adoption of the EU list) and the means to oversee their transit and transfer through the country. It would also include a national register of end-users of those economic operators and facilities handling dual-use goods (achieved through the national register provisions);
  3. to empower interagency co-ordination mechanisms and fora to achieve effective compliance with UN SCR 1540, UN SCR 1718 and subsequent Security Council Resolutions, in partnership with the private and academic sectors – this included putting in place arrangements for co-operation and information-sharing among the authorities responsible for security at ports, airports and frontiers and in territorial waters, so as to provide timely assessment of risks related to import, export, re-export, transit and trans-shipment of the relevant goods (and any related financing activities);
  4. to strengthen the mechanisms for timely information-sharing and international co-operation; and
  5. to organise, through the 1540 Committee and other specialised bodies, technical assistance to strengthen national capacity to fulfil the commitments made under UN SCR 1540, legislative reforms and international co-operation.


For more information on Executive Decree 81 and its path to implementation, please see “Facilitating the Implementation of Strategic Trade Controls in the Republic of Panama” (Strategic Trade Review Journal, Spring/Summer 2018)[44].

Ray Todd

12th October 2018


[1]  Which accounts for around 10% of the country’s GDP.

[2]  https://www.bbc.co.uk/news/world-asia-23324170

[3]  The Trans-American Highway also runs south as far as Panama. (where it stops, only to recommence its path from Colombia southwards).

[4]  https://www.colonfreetradezone.com/freezone-colon.html

[5]  More than 120 banks from various countries are said to comprise the International Financial District of Panama, and more than 20 participate in the financial activity of the CFZ from their offices and branches located within the Free Trade Zone commercial centre.

[6]  For which you pay a toll to use.

[7]  https://www.focus-economics.com/countries/panama

[8]  http://www.wcoomd.org/en/topics/enforcement-and-compliance/instruments-and-tools/~/media/7A05799E8D3A46C8B8355175EEBA4322.ashx

[9]  https://www.gacetaoficial.gob.pa/pdfTemp/28287_B/61296.pdf

[10]  http://www.un.org/en/sc/1540/documents/Panama_action_plan.pdf

[11]  An individual or organisation that has significant political or other influence but is not allied to any particular country or state.  In the context of UN SCR 1540 it is often used to mean terrorist and paramilitary organisations and their members, supporters and organisers.

[12]  Note that the EU Dual-use List adopted by Panama as its own uses the term “dual-use items”.

[13]  With the Ministry of Commerce and Industry being the lead ministry.

[14]  Autoridad del Canal de Panamá (or ACP) in Spanish: https://www.pancanal.com/eng/op/notices/2018/N01-2018.pdf

[15]  For some background on RPM, see this Stanford University article: http://large.stanford.edu/courses/2016/ph241/wolk1/

[16]  https://www.unodc.org/ropan/en/BorderControl/container-control/ccp.html

[17]  Such a system provides a single entry point (or “window”) – either physical or electronic – for the submission of all data and documents related to the declaration, clearance and release of goods, and managed by one agency, which then can inform any other agency required and apply or direct any necessary control action. See: http://tfig.unece.org/contents/single-window-for-trade.htm

[18]  https://www.pancanal.com/eng/index.html

[19]  As well as proof of financial responsibility and adequate provision for indemnity to third parties as a guarantee against any possible damage and/or loss.

[20]  The International Maritime Dangerous Goods Code of the International Maritime Organisation: see http://www.imdgsupport.com/free%20imdg%20code%20introduction%2037-14.pdf

[21]  See paragraph 16 of NOTICE TO SHIPPING No. N-1-2018: https://www.pancanal.com/eng/op/notices/2018/N01-2018.pdf

[22]  The Decree defines “handling” as meaning: “Any action that consolidates, deconsolidates, guards, preserves, packs, unpacks, repacks, handles, dispatches, transships, transits, transports, ensure, measure, certifies, operates, maritime, land or air terminals, remits by mail any of the goods, included in the National Control list of Dual-Use Goods.

[23]  Part of the US State Department’s Bureau of International Security and Non-proliferation (ISN), EXBS works with partner governments throughout the world seeking “to prevent the proliferation of weapons of mass destruction… by helping to build effective national strategic trade control systems in countries that possess, produce, or supply strategic items, as well as in countries through which these items are most likely to transit.” https://www.state.gov/t/isn/ecc/c27911.htm

[24]  https://www.unodc.org/ropan/en/BorderControl/container-control/ccp.html

[25]  https://www.wassenaar.org/

[26]  https://australiagroup.net/en/

[27]  http://www.nuclearsuppliersgroup.org/en/

[28]  http://mtcr.info/

[29]  http://trade.ec.europa.eu/doclib/html/155445.htm

[30]  https://unstats.un.org/unsd/tradekb/Knowledgebase/50018/Harmonized-Commodity-Description-and-Coding-Systems-HS

[31]  Organisation for Security and Co-operation in Europe: https://www.osce.org/

[32]  Council Regulation 428/2009/EC (as amended): http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1527179601283&uri=CELEX:02009R0428-20171216

[33]  For a handy summary of the ICP requirements, see https://www.steptoeinternationalcomplianceblog.com/2018/10/eu-promotes-export-controls-and-sanctions-compliance-programs/#page=1

[34]  An authorisation shall be required if, while not listed, the items in question are or may be intended, in their entirety or in part, for use” at any stage of development of chemical, biological, or nuclear weapons, or “are or may be intended, in their entirety or in part, for a military end-use, exported to countries subject to an arms embargo, or intended for use as a component of listed military items exported without authorisation; and it is the responsibility of the exporter to report to the authorities any awarenessthat the item he wants to export falls into these categories, even if non-listed.

[35]  Article 2(5) of the EU Regulation refers: “brokering services” means the negotiation or arrangement of transactions for the purchase, sale or supply of dual-use items from a third country to any other third country, or the selling or buying of dual-use items that are located in third countries for their transfer to another third country – but the sole provision of ancillary services is excluded from this definition; such ancillary services are transportation, financial services, insurance or re-insurance, or general advertising or promotion.

[36]  GAFILAT is what is termed a “FATF-Style Regional Body” or FSRB.  Modelled on the Financial Action Task Force (itself an organ of the Organisation for Economic Co-operation and Development or OECD) these are regional bodies are granted certain rights by FATF and serve as regional groupings for matters related to AML/CFT.  Their primary purpose is to promote a member jurisdiction’s implementation of comprehensive AML/CFT regimes, implement the FATF Recommendations and evaluate and report on member state’s compliance to those Recommendations.

[37]  http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/MER-GAFILAT-Panama-Jan-2018.pdf

[38]  https://superbancos.gob.pa/en/prev-cont-il-op/national-strategy

[39]  http://www.un.org/en/sc/1540/

[40]  https://www.un.org/disarmament/wmd/sc1540/

[41]  http://www.un.org/en/sc/1540/documents/Panama%20revised%20matrix.pdf

[42]  http://www.wcoomd.org/en/topics/enforcement-and-compliance/instruments-and-tools/guidelines/wco-strategic-trade-control-enforcement-implementation-guide.aspx

[43]  http://www.un.org/en/sc/1540/documents/Panama_action_plan.pdf

[44]  https://strategictraderesearch.org/current-issue-summer-2018/


On 12th October, VoA published a video report saying that a new documentary has implicated Kenyan banks in money laundering for corrupt South Sudanese leaders.  There have also been calls to deport former South Sudan army chief Paul Malong Awan, who is subject to a UN travel ban and asset freeze, said to be living in Nairobi.