US embassy cable - 04PANAMA2943

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 002943 
 
SIPDIS 
 
 
STATE ALSO FOR WHA/CEN AND WHA/CCA 
 
 
E.O. 12958: DECL: 09/12/2008 
TAGS: PREL, ETTC, PGOV, EFIN, ETRD, PM, CU, POL CHIEF 
SUBJECT: PANAMA AND CUBA: NSC-DIRECTED REVIEW REGARDING 
SUSPENSION OF TITLE III OF THE LIBERTAD ACT 
 
 
REF: A. STATE 248337 
     B. PANAMA 2152 
     C. PANAMA 2176 
     D. PANAMA 1684 
     E. PANAMA 2524 
 
 
Classified By: ACTING DCM JOHN DANILOWICZ FOR REASONS 1.4 (B) AND (D) 
 
 
1.  (SBU) Embassy Panama offers the following information and 
analysis in response to Reftel A tasking. 
 
 
CUBA AND PANAMANIAN POLITICS 
----------------------------- 
2.  (C) Six days before leaving office, late on the evening 
of August 25, 2004, Panamanian President Mireya Moscoso 
pardoned four anti-Castro Cubans who had been jailed since 
November 2000 and convicted in April 2004 for conspiracy, 
possession of explosives, and endangering public security 
(Reftels B and C) in connection with an alleged plot to 
assassinate Cuban President Fidel Castro.  Three of the four 
pardoned prisoners are AmCits and traveled to Miami early on 
the morning of August 26.  The fourth, Luis Posada Carriles, 
reportedly traveled to Honduras. 
 
 
3.  (SBU) The pardons caused an immediate rupture in 
relations between Panama and Cuba.  Newly inaugurated 
President Martin Torrijos criticized the pardons in his 
September 1 inaugural address and vowed to restore relations, 
but Cuba was not willing to move quickly.  Consular relations 
were restored on November 19; the Cuban consulate re-opened 
in Panama City on December 2, according to press reports. 
 
 
4.  (SBU) In recent days, local newspapers have raised doubts 
about the legality of actions taken by former GOP officials 
-- Minister of Government and Justice Escalona, Police Chief 
Bares, and Immigration Chief Tapia, in particular -- who 
allegedly ignored certain legal requirements governing the 
travel of the four men and their exit from Panama. 
 
 
5.  (SBU) Under the Moscoso government, Panama maintained a 
largely a neutral policy toward with the notable exception of 
the August 25 pardons and with its 2003 decision to accept 
Cuban citizen Ramon Aguilar Hernandez as a refugee after his 
failed attempt to flee Cuba to the United States and his 
subsequent detention by U.S. authorities in Guantanamo Bay 
Naval Base. 
 
 
6.  (SBU) Panama has routinely supported initiatives in 
multilateral fora to promote human rights or to condemn 
abuses worldwide.  Individual GOP representatives have 
expressed specific concerns about human rights abuses in 
Cuba; however, in the recent past the GOP has not publicly 
criticized Cuba for human rights abuses.  Panama has 
consistently joined  its neighbors in the region by following 
majority decisions on sensitive Cuba issues in multilateral 
fora, like the 2003 annual UN resolution condemning the U.S. 
embargo of Cuba.  (See Reftel D.) 
 
 
CUBA AND THE PANAMANIAN ECONOMY 
------------------------------- 
7.  (SBU) Merchandise trade with Cuba is not important for 
Panama.  In 2003, according to official figures, Panamanian 
exports to Cuba amounted to less than one-tenth of one 
percent of all Panamanian exports, while imports from Cuba 
accounted for an even smaller percentage. 
 
 
8.  (C) Cuba's principal economic and financial connection 
with Panama is its use of the Colon Free Zone (CFZ), where it 
is a large customer.  (See Reftel E.)  Cuban government 
businesses bought $208 million worth of merchandise in 2003 
through the CFZ, where finance is relatively easy to arrange. 
 Overdue Cuban accounts receivable probably exceed the 
official figure of $200 million.  Panamanian businesses 
holding these large debts believe they have an interest to 
restrain local criticism of Cuban government policies, if 
only to ensure continued interest payments and to stave off a 
Cuban default.  In fact, following the late August 2004 break 
of diplomatic relations between the two countries, CFZ 
merchants immediately protested, fearing Cuba might retaliate 
by not paying its outstanding debts. 
 
 
9.  (SBU) Embassy has not been able to identify Panamanian 
investments in Cuba. 
 
 
Comment 
------- 
10.  (C) Cuba may be slow in paying its debts but, as the CFZ 
represents a lifeline, fears of a default are exaggerated. 
The chance of a default is low.  USG action against Cuban 
interests in the CFZ would affect a wide range of Panamanian 
business interests and would create a major foreign relations 
problem for the United States. 
 
 
WATT