Disputes - international:
organized illegal narcotics operations in Colombia operate within the remote border region with Panama
Trafficking in persons:
current situation: Panama is a source, transit, and destination country for women and children subjected to sex trafficking and forced labor; although some Panamanian women and girls are subjected to sex trafficking in other countries in Latin America and in Europe, most Panamanian trafficking victims are exploited within the country; commercial sexual exploitation of children was greater in rural areas; Panamanian children, mostly young girls, are subjected to domestic servitude; most foreign trafficking victims are adult women from Colombia, neighboring Central American countries, and the Dominican Republic; some victims migrate voluntarily to Panama to work but are subsequently forced into prostitution or domestic servitude
tier rating: Tier 2 Watch List - authorities established a commission which drafted comprehensive anti-trafficking legislation to bring anti-trafficking laws in line with the 2000 UN Trafficking in Persons (TIP) Protocol; the government identified at least 43 trafficking victims and prosecuted five sex trafficking offenders, and in partnership with civil society and foreign governments, provided training to Panamanian officials; however, Panama continued to lack prohibitions against forced labor in its penal code, and authorities did not convict any trafficking offenders; specialized victim services, particularly for adult victims, remained limited, and authorities did not report using proactive procedures to identify trafficking victims among detained migrants (2011)
Illicit drugs:
major cocaine transshipment point and primary money-laundering center for narcotics revenue; money-laundering activity is especially heavy in the Colon Free Zone; offshore financial center; negligible signs of coca cultivation; monitoring of financial transactions is improving; official corruption remains a major problem