[Senate Executive Report 104-3]
[From the U.S. Government Publishing Office]



104th Congress                                              Exec. Rept.
                                 SENATE

 1st Session                                                      104-3
_______________________________________________________________________


 
       TREATY WITH PANAMA ON MUTUAL ASSISTANCE IN CRIMINAL MATTERS

                                _______


      May 5 (legislative day, May 1), 1995.--Ordered to be printed

_______________________________________________________________________


   Mr. Helms, from the Committee on Foreign Relations, submitted the 
                               following

                              R E P O R T

                   [To accompany Treaty Doc. 102-15]
    The Committee on Foreign Relations, to which was referred 
the Treaty Between the United States of America and the 
Republic of Panama on Mutual Assistance in Criminal Matters, 
With Annexes and Appendices, signed at Panama on April 11, 
1991, having considered the same, reports favorably thereon, 
and recommends that the Senate give its advice and consent to 
ratification thereof subject to two provisos as set forth in 
this report and the accompanying resolution of ratification.
                                Purpose

    The Treaty Between the United States of America and the 
Republic of Panama on Mutual Assistance in Criminal Matters, 
With Annexes and Appendices, hereinafter ``The Treaty,'' 
provides for the sharing of information and evidence related to 
criminal investigations and prosecutions, including drug 
trafficking and narcotics-related money laundering. Both 
parties are obligated to assist in the investigation, 
prosecution and suppression of offenses in all forms of 
proceedings (criminal, civil or administrative).

                               Background

    On April 11, 1991, the United States signed a treaty with 
the Republic of Panama on mutual assistance in criminal matters 
and the President transmitted the Treaty to the Senate for 
advice and consent to ratification on October 24, 1991. In 
recent years, the United States has signed similar mutual legal 
assistance treaties (MLATs) with many other countries as part 
of an effort to modernize the legal tools available to law 
enforcement authorities in need of foreign evidence for use in 
criminal cases. There are twelve mutual legal assistance 
treaties currently in force in the U.S.
    Negotiation of the Treaty spanned several years and talks 
were renewed almost immediately after the restoration of a 
democratic government to Panama and the entry into office of 
the elected government of Guillermo Endara in December, 1989. 
Early drafts of the Treaty were vigorously opposed by the 
banking and legal communities in Panama, apparently because 
they feared it would neutralize the benefits of the bank 
confidentiality laws which have enabled Panama to attract money 
in competition with other offshore financial centers in the 
region, such as the Bahamas and the Cayman Islands.
    In late March, 1991, the United States and Panama agreed to 
renew negotiations on a treaty using a draft text essentially 
identical to the mutual legal assistance treaty which the 
United States signed with the Bahamas in 1989. An 
``understanding'' was prepared to accompany the draft Treaty 
and clarify its terms. The negotiations were successfully 
concluded, and as a result, the mutual assistance Treaty, with 
the ``understanding'' included as an annex, was signed April 
11, 1991. The Legislative Assembly of Panama approved the 
mutual assistance treaty on July 15, 1991, at a special session 
convened by President Endara exclusively for that purpose. 
President Endara signed the law ratifying the Treaty on July 
22, 1991, and it was published July 25, 1991 in the ``Official 
Gazette.''
                            Major Provisions

    MLATs generally impose reciprocal obligations on parties to 
cooperate both in the investigation and the prosecution of 
crime. MLATs are increasingly extending beyond their role as 
vehicle for gathering information to include ways of denying 
criminals the ``fruits and instrumentalities'' of their crimes. 
This includes such things as money or other valuables either 
used in the crime or purchased or obtained as a result of the 
offense. Below are key provisions of this Treaty.
    Article 1 sets out the obligations of the Parties to 
mutually assist in the investigation, prosecution, and 
suppression of covered offenses and in related proceedings. 
This article makes clear that all requests are to be executed 
in accordance with the laws of the Requested State.
    Article 3 permits a Requested State to deny assistance if: 
(1) the request relates to a political offense, (2) execution 
of the request would prejudice the security or essential 
interests of the Requested State, (3) the evidence relates to a 
trial of a person for an offense for which the person has 
previously been acquitted, convicted, or otherwise put in 
jeopardy, (4) there are substantial grounds to believe that the 
request would facilitate prosecution on account of race, 
religion, nationality, or political opinion, or (5) there is a 
lack of sufficient evidence that a crime has been committed and 
that the information sought relates to the offense.
    Article 8 prohibits a requesting State from using evidence 
or information provided under the Treaty, or any information 
derived from information or evidence provided under the Treaty, 
for purposes other than those stated in the request unless the 
Requested State consents.
    Article 9 permits a State to compel a person in the 
Requested State to testify and produce documents there. Such 
persons are compelled to provide testimony or evidence over 
objections that the testimony would be improper under the law 
of the Requesting State. Such objections are to be noted for 
later resolution of authorities in the Requesting State.
    Article 11 does not permit the compelled appearance of a 
person in a Requesting State for testimony regardless of 
whether the person is in custody or out of custody. A witness 
may be invited to appear and the Requested State is to inform 
the Requesting State promptly of the invited witness' response.
    Article 14 sets out forfeiture assistance provisions. This 
MLAT goes beyond merely requiring a State to inform the other 
party to the Treaty when proceeds of criminal offenses are 
believed to be there, but does limit notification obligations 
to fruits and instrumentalities of ``serious offenses such as 
drug trafficking.''
    Article 16 provides for assistance in locating a person 
described in a request, requiring each party make its best 
efforts. The Treaty limits assistance to locating persons who 
are needed in connection with the investigation, suppression, 
or prosecution of a covered offense.
                           Committee Comments

    The Committee on Foreign Relations recommends Senate advice 
and consent to ratification of the Treaty with Panama on Mutual 
Assistance in Criminal Matters. If ratified, the Treaty will be 
an effective legal tool to assist both Governments in the 
prosecution of a wide variety of modern criminals, including 
members of drug cartels, ``white collar criminals,'' and 
terrorists. However, the Committee supports a proviso, as 
provided in all other MLATs with Latin American countries, that 
makes clear that the United States must deny any request for 
assistance by the Panamanian Government when a senior 
government official with access to the information provided 
under the Treaty is engaged in or facilitates the production or 
distribution of illegal drugs. To permit a request for 
assistance under such circumstances would undermine the purpose 
and effectiveness of the Treaty. The resolution of ratification 
also contains a proviso that states that the Treaty does not 
require or authorize legislation or action prohibited by the 
United States Constitution.
    The Treaty covers a broad range of offenses, except pure 
cases of tax evasion. Narcotics-related money laundered or tax 
cases involving unreported income acquired through drug 
trafficking are considered offenses under the Treaty. The 
Parties agree to mutual assistance in the investigation, 
prosecution and suppression of specified offenses and in all 
related proceedings. The Treaty provides for various forms of 
assistance, including the provision of documents, records and 
evidence; the execution of requests for search and seizure; the 
immobilization of forfeitable assets; and the obtaining of 
witness testimony. The Treaty does not provide for assistance 
in response to requests from private or other third parties.
    The use of MLATs as a means of international legal 
assistance is propelled by an explosion of transnational crime, 
particularly illegal drug trafficking. Crime, in part conducted 
abroad and culminating in the United States, as well as certain 
types of acts, such as terrorism, committed wholly abroad 
against U.S. interests and nationals, has given rise to a need 
for expanded U.S. criminal jurisdiction. The Committee notes 
that as law enforcement increasingly is focused on activities 
and assets abroad, the limitations of traditional methods of 
obtaining evidence, such as letters rogatory, and other 
assistance in foreign countries are more apparent.
    The Committee supports ratification of the Treaty as a 
positive step to bring to justice criminals that act 
transnationally to harm U.S. interests and nationals. Panama is 
a major transhipment point for cocaine destined for the United 
States and Europe. Panama continues to be a haven for narcotics 
related money laundering because of its numerous banks and 
trading companies, dollar-based economy, and traditional 
laissez-faire attitude toward the movement of money. The 
Government of Panama has taken strides to combat crime in these 
areas, criminalizing drug-related money laundering, mandating 
reporting of suspicious transaction reporting, and extending 
cash transaction reporting obligations to non-financial 
institutions. This Treaty will be an important step in further 
soliciting the strengthening Panamanian cooperation in 
combatting narco-trafficking and money laundering. The 
Committee therefore recommends that the Senate grant early 
advice and consent to ratification.

                            Committee Action

    The Committee on Foreign Relations held three public 
hearings to consider ratification of the Treaty. On May 6, 
1992, in a hearing before the Subcommittee on Terrorism, 
Narcotics and International Operations, testimony was received 
from R. Grant Smith, Principal Deputy Assistant Secretary, 
Bureau of International Narcotics Matters at the Department of 
State, and David Kriskovich, Director of the International 
Criminal Investigative and Training Assistance Program at the 
Department of Justice. On April 20 and 21, 1994, the 
Subcommittee heard testimony during two days of hearings in 
tandem with testimony regarding recent developments in 
transnational crime affecting U.S. law enforcement and foreign 
policy.
    The Committee considered the Convention at its business 
meeting on May 2, 1995, and voted by voice vote with a quorum 
present to report it favorably to the Senate for its advice and 
consent.
                      Article-by-Article Analysis

                    article 1--obligation to assist

    The first article of the Treaty provides for assistance in 
all matters involving the investigation, prosecution, and 
suppression of offenses and in proceedings connected therewith. 
The term ``offenses'' is defined in Article 2 of the Treaty, 
and further defined in the Annex. That definition must be kept 
in mind in reading this paragraph. The Treaty could be invoked 
in matters where no criminal prosecution or investigation is 
pending, such as a civil forfeiture proceeding involving assets 
acquired through a criminal offense covered by the treaty.
    The second paragraph of the article lists the major types 
of assistance specifically considered by the negotiators of the 
treaty. Each of the items listed in the second paragraph is the 
subject of an article later in the treaty which describes in 
detail the procedure and conditions for that kind of 
assistance. Thus, the second paragraph serves as something of a 
``table of contents'' to much of the remainder of the treaty. 
This list of types of assistance, however, is not intended to 
be exhaustive, as indicated by the word ``include'' in the 
first clause, and by subsection 2(i), which permits assistance 
for any other matter mutually agreed upon by the Contracting 
Parties.
    The third paragraph provides that the Treaty is solely a 
statement of the rights and obligations between the Government 
of the United States and the Government of the Republic of 
Panama, and that the treaty is not intended to be utilized by 
individuals or nongovernmental entities in either State. Thus, 
private parties may not invoke the treaty in order to obtain 
evidence from the other country. Both negotiating delegations 
agreed that the purpose of this treaty is to enhance the 
effectiveness of criminal law enforcement authorities, not to 
provide alternative methods of evidence gathering for others, 
such as criminal codefendants or litigants in civil matters. In 
this regard, it is anticipated that any efforts by civil 
litigants to obtain evidence from Panama for use in civil cases 
will continue to be made by letters rogatory.\1\ The phrase 
``or third parties'' was included in the second sentence 
because the Panamanian delegation wanted the treaty to show 
clearly that it is not a vehicle by which states who are not 
parties to it can obtain access to evidence from one or the 
other of the Contracting States. Thus, the United States could 
not ask Panama under the treaty to provide evidence for use by 
a third country.
    \1\ See Article 18(1), which specifically provides that the treaty 
does not affect or disturb other methods of international assistance.
---------------------------------------------------------------------------
    The fourth paragraph provides that all requests shall be 
executed ``in accordance with and subject to the limitations of 
the laws of the Requested State''. The delegations made it 
clear that the primary purpose of this provision is to 
recognize the Constitutional limitations of the Contracting 
States. The Panamanian authorities stated that the treaty is 
subject to all the limitations of Panamanian domestic law, but 
there is nothing in the treaty which is in direct conflict with 
Panamanian law.
    Panama currently has no law specifically addressing the 
execution of requests under a treaty of this kind. However, 
Panamanian officials stated that the treaty will become 
Panamanian law, with full force and effect, immediately upon 
its entry into force, and that no implementing legislation is 
needed or anticipated, because the treaty contains all the 
authority needed to give it immediate effect. This is reflected 
in paragraph 3 of the Annex to the treaty, which states:

          This treaty provides the necessary legal authority to 
        carry out and fully implement all of its provisions to 
        their fullest scope (to the extent this legal authority 
        does not already exist) for all competent authorities 
        within the Governments of the respective Contracting 
        States; provided however, that as indicated in Article 
        1(4) nothing herein is intended to affect the 
        constitutional provisions of either State.

No implementing legislation is needed or anticipated for the 
United States.
                         article 2--definitions

    Article 2 defines the term ``offenses'' as used in the 
treaty. The definition of this term clarifies the scope of the 
obligation to assist, and hence of the treaty itself.
    The first paragraph of Article 2 states that ``offenses'' 
includes all conduct punishable as a crime under the laws of 
both the Requesting and Requested States. Extradition treaties 
frequently condition the surrender of fugitive criminals on a 
showing of ``double criminality,'' and this paragraph is to be 
interpreted by both Parties in much the same manner as an 
extradition treaty provision. In extradition cases, ``double 
criminality'' can exist even when the countries call the crime 
by different names, or place the crime in different categories, 
or penalize it by different punishments. The double criminality 
rule ``does not require that the name by which the crime is 
described in the two countries shall be the same, nor that the 
scope of liability shall be coextensive, or in other respects 
the same . . .'' \2\ The test is whether the conduct which is 
believed to have been committed in the requesting state would 
constitute some criminal offense if committed in the requested 
state.\3\ Thus, the double criminality test, properly applied, 
would permit assistance in many United States offenses which 
appear not to have exact statutory counterparts in Panama.\4\ 
The Parties will give a liberal interpretation to Article 
2(1)(a) in order to aid one another in as many cases as 
possible.
    \2\ Collins v. Loisel, 259 US 309, 312 (1922); Brauch v. Raiche, 
618 F.2d 843 (1st Cir. 1980). See also In Re Suarez-Mason, 694 F. Supp. 
676 (N.D. Cal. 1988); United States v. Carlos Lehder-Rivas, 668 F. 
Supp. 1523 (M.D. Fla. 1987).
    \3\ United States v. McCaffery [1984] 2 All E.R. 570; Req. v. 
Governor of Pentonville Prison, ex Parte Budlong and another [1980] 1 
All E.R. 701; Shapira v. Ferrandina, 478 F.2d 894 (2d Cir. 1973).
    \4\ For example, ``racketeering'' in violation of Title 18, United 
States Code, Section 1962, is a crime which does not have a precise 
counterpart in Panamanian statutory law. However, racketeering charges 
always involve a pattern of criminal activity including two or more 
``predicate acts'' of criminal behavior. Panamanian authorities asked 
to assist us under the treaty in a racketeering case will be expected 
to look to the predicate acts allegedly committed by the offender and, 
if those acts would be criminal in Panama, the double criminality rule 
will have been satisfied. Similarly, United States laws on insider 
trading have no exact counterpart in Panama's laws, but the United 
States was assured that treaty assistance would be granted if the 
conduct of the offender would be treated as fraud in Panama.
    One common problem in this area was specifically discussed 
during the negotiations with the Bahamas, and the language used 
in the U.S.-Bahamas Treaty to address it is also used in the 
treaty with Panama. Certain United States federal offenses are 
described in statutes which call for proof of certain elements 
(such as use of the mails or interference with interstate 
commerce) to establish jurisdiction in the federal counts. 
Foreign judges generally have no similar requirement in their 
own criminal law (since few countries have the kind of federal 
system we do), and on occasion have denied extradition of 
fugitives on this basis. This problem should not occur under 
Article 2(1)(a) of this treaty, since it is understood that the 
Requested State will disregard elements of an offense required 
solely for the purpose of establishing federal jurisdiction \5\ 
and will not be misled by mere differences in the terminology 
used in defining the offense under the laws of each country.
    \5\ See United States v. Herbage, 850 F.2d 1463 (11th Cir. 1988); 
United States v. McCaffery, supra note 4.
---------------------------------------------------------------------------
    Representatives of the United States and Panama discussed 
Article 2(1)(a) of the treaty in some detail, and it appears 
that most major criminal prosecutions in the United States 
except pure tax cases would qualify for assistance under the 
double criminality test, properly applied.
    However, Panamanian and United States laws do differ 
significantly in some respects, and for this reason strict 
adherence to the double criminality rule alone might render 
assistance unavailable to the Requesting State in some areas in 
which no public policy in the Requested State would call for 
such a restriction. Therefore; in order to accommodate each 
country's investigative and prosecutive needs, the treaty 
permits assistance to be granted in five specific areas without 
regard to double criminality. For crimes which fall within 
these categories, it is enough that the conduct under 
investigation ``arises from, relates to, results from, or 
otherwise involves'' a crime punishable by more than one year's 
imprisonment in the Requesting State.
    The phrase ``arises from, relates to, results from, or 
otherwise involves'' is intentionally broad. It includes crimes 
such as attempting or conspiring to commit an offense on the 
list as well as actually committing such an offense; it also 
includes racketeering charges which rely upon a listed offense 
as a predicate offense, or tax crimes involving funds acquired 
through the commission of a listed offense, if the conditions 
of Article 2(2) are met.
    Article 2(1)(b) lists five kinds of crimes for which double 
criminality is unnecessary:
          1. Crimes relating to illegal narcotics trafficking. 
        Panama has extensive anti-drug trafficking legislation, 
        and it appears that most significant criminal narcotics 
        investigations or prosecutions in the United States 
        would fall comfortably within Article 2(1)(a). However, 
        due to the importance of the treaty in reinforcing 
        bilateral anti-narcotics efforts, this provision 
        insures that double criminality will not be a barrier 
        to cooperation. In the annex which accompanies the 
        treaty, the parties state that, ``The traffic in drugs 
        is a serious problem to both countries, and it is 
        intended that this treaty will be a valuable tool to 
        enhance investigations aimed at halting these offenses. 
        Both the United States and Panama are parties to the 
        Single Convention on Narcotic Drugs, 1961 as amended by 
        the 1972 Protocol, which obliges the signatories to 
        provide assistance to each other in narcotics 
        investigations. The obligation undertaken here is 
        consistent with that set out in these multilateral 
        conventions, since neither the Single Convention nor 
        the Amending Protocol conditions the obligation to 
        provide assistance on double criminality.''
          2. Theft;
          3. A crime of violence. In the annex which 
        accompanies the treaty, the Parties state that this 
        language was intended to cover ``Crimes of violence, 
        such as bank robbery, extortion, or terrorism-related 
        crimes,'' like the similar language in the U.S.-Bahamas 
        Treaty;
          4. Fraud or the use of fraud, including the obtaining 
        of money or property by false pretenses, 
        representations, or promises and including the 
        commission of embezzlement, and all conduct which has 
        the effect of defrauding the government or its citizens 
        or the ability to conduct their affairs free from 
        fraud, false statements and deceit. The annex explains: 
        ``This subparagraph would include mail or wire fraud, 
        most securities laws violations involving fraud or 
        fraudulently obtained profits . . .'' However, the 
        annex also makes it clear that ``the subparagraph would 
        not include tax evasion cases not related to other 
        offenses covered by this Treaty . . .'' The treaty with 
        the Bahamas requires assistance in investigations or 
        prosecutions involving the operators of large scale tax 
        shelter frauds,\6\ but it is not clear from the 
        negotiations with Panama whether the treaty with Panama 
        requires similar assistance, and it is anticipated that 
        such requests will be assessed on a case by case basis;
    \6\ These, or course, are the cases in which gullible victims are 
persuaded by fraud artists to pay money for ``investments'' which are 
advertised as having been structured to result in the victims' avoiding 
or substantially reducing his federal income tax. Then the offenders 
often simply pocket the money, and provide the victim with fraudulent 
documents purporting to reflect the investment. Since the Internal 
Revenue Service usually disallows any tax benefits based on 
participation in the scheme, the victim actually loses twice--he loses 
the money he paid to the tax shelter promoter to invest on his behalf, 
and he also fails to obtain the tax benefits for which he paid.
          5. Violations of a law of one of the contracting 
        states relating to currency or other financial 
        transactions as an integral element contributing to the 
        commission of any offense within the meaning of the 
        foregoing provisions of this paragraph. Since the fight 
        against money laundering is a major United States law 
        enforcement priority, it was important that the treaty 
        provide for assistance in money laundering 
        investigations. The annex states: ``This subparagraph 
        should cover most violations of Title 31, United States 
        Code, and is focussed on crimes involving money 
        laundering or other violations of the currency or 
        financial transaction reporting laws which contribute 
        to drug trafficking or other offenses.'' It is 
        important to note that money laundering is treated as a 
        crime for which double criminality is not necessary, 
        because at present Panamanian law only covers the 
        laundering of drug proceeds,\7\ while United States 
        money laundering legislation is much more extensive. 
        The Panamanian authorities assured the United States 
        that this clause permits Panama to provide assistance 
        in United States investigations of the laundering of 
        money derived from any crime covered by the Treaty, 
        even in circumstances in which there would be no money 
        laundering prosecution possible under current 
        Panamanian law. However, the United States request must 
        show that the money allegedly laundered was obtained 
        from an offense covered by the Treaty, either under 
        Article 2(1)(a)'s ``double criminality'' or Article 
        2(1)(b)'s exceptions to double criminality.\8\ An 
        investigation into the laundering of money acquired 
        through a tax offense unrelated to any other crime 
        would fall within the exclusion in Article 2 (2).
    \7\ Law 23 of December 30, 1986.
    \8\ The Panamanian delegation stated that it is not necessary that 
the money launderer actually knew that the money was the fruit of a 
crime covered by the treaty so long as the money is in fact the result 
of such a crime.
    Article 2(2), like Article 3(1) of the U.S.-Cayman Treaty 
and Article 2(2) of the U.S.-Bahamas Treaty, permits denial of 
assistance when the matter is one which relates directly or 
indirectly to the regulation of taxes, including the 
imposition, calculation, and collection of taxes. The annex 
states: ``The subparagraph specifically notes that exceptions 
to this restriction exist where the monies involved in the tax 
matter were derived from any activity covered by Article 
2(1)(a) or 2(1)(b). For example, a criminal tax prosecution in 
the United States involving unreported income acquired through 
illegal drug trafficking could qualify as an offense for which 
assistance could be provided under the Treaty.''
    Article 2(3) defines the kinds of proceedings in aid of 
which treaty requests can be made.
    Article 2(3)'s first subparagraph states that criminal 
trials in either country, or pretrial motions in connection 
with such trials, may be the basis for request for assistance.
    The second subparagraph states that United States grant 
jury proceedings can be the basis of requests. The 
corresponding legal process in Panama is called a preliminary 
investigation, and the subparagraph specifies that these too 
can be the basis of treaty requests.
    Article 2(3)(c) states that the Treaty will be available in 
judicial or administrative hearings involving the forfeiture of 
the fruits or instrumentalities of drug trafficking. This is 
fully consistent with the provisions of Article 14 of the 
treaty, which is discussed in more detail below.
    Under United States law, there are some civil or 
administrative proceedings which could impose sanctions on an 
offender in connection with a criminal matter in the United 
States. For instance, the Securities and Exchange Commission 
can order a securities trader to disgorge unlawfully obtained 
profits, or surrender stock obtained in violation of the law; 
the Commodities Futures Trading Commission can bar a trader 
from the United States commodities market; and any United 
States court can order restitution to the victims of an 
offense. The United States believes that the imposition of 
sanctions of this kind sometimes can be as important in 
deterring unlawful activities as criminal prosecution. 
Therefore, Articles 2(2)(d) and 2(2)(e) permit the Central 
Authority, in his discretion, to apply the treaty to a request 
involving proceedings of this kind.
    Both delegations agreed that the provisions of Article 2 
generally do not authorize assistance to investigations in 
either Contracting State which are not being pursued by 
prosecutorial authorities. This is consistent with all other 
United States mutual legal assistance treaties, and reflects 
the fact that the courts in the United States have ruled that 
United States law does not permit such assistance.\9\
    \9\ See In Re Letter of Request to Examine Witnesses From the Court 
of Queen's Bench of Manitoba, Canada, 59 F.R.D. 625 (N.D. Cal. 1973), 
aff'd 488 F.2d 511 (9th Cir. 1973).
                  article 3--limitations on compliance

    Article 3(1) specifies classes of cases in which assistance 
may be refused under the Treaty.
    Article 3(1)(a), like the similar provision in other 
treaties of this kind, permits assistance to be refused if the 
assistance would prejudice the security or ``essential public 
interests'' of the Requested State. The United States intends 
to apply this provision sparingly, and views ``essential public 
interests'' as those ancillary to national security. The 
Panamanian delegation agreed, but did point out that in 
exceptional cases the phrase could include essential interests 
unrelated to national military or political security. It is 
clearly understood that ``public interest'' will not be 
interpreted in a manner to convert the treaty's mandatory 
provisions into discretionary ones, and that the need to 
nurture bank confidentiality, standing alone, will not be cited 
as the kind of ``essential public interest'' authorizing a 
denial of assistance.
    This provision would be invoked if the execution of a 
request would violate essential United States interests related 
to the fundamental purposes of the Treaty. One fundamental 
purpose of the Treaty is to enhance law enforcement 
cooperation, and attaining that purpose would be hampered if 
sensitive law enforcement information available under the 
Treaty were to fall into the wrong hands. Recent cases in 
various countries demonstrate that Government officials are not 
immune to the temptation posed by the enormous profits offered 
by criminal syndicates or drug traffickers. The United States 
Central Authority would invoke Article 3(1)(a) to decline to 
provide sensitive or confidential drug related information 
pursuant to a request under this Treaty whenever it determines, 
after appropriate consultation with law enforcement, 
intelligence, and foreign policy agencies, that a senior 
foreign government official who will have access to the 
information is engaged in or facilitates the production or 
distribution of illegal drugs and is using the request to the 
prejudice of a United States investigation or prosecution.\10\
    \10\ This is consistent with the sense of the Senate as expressed 
in its advice and consent to ratification of the mutual legal 
assistance treaties with Argentina, Uruguay, Spain, and Jamaica, on 
July 2, 1992, and with Mexico, Canada, Belgium, Thailand, the Bahamas, 
and the United Kingdom Concerning the Cayman Islands. See Cong Rec 
13884, October 24, 1989. See also Mutual Legal Assistance Treaty 
Concerning the Cayman Islands: Report by the Comm. on Foreign 
Relations, 100th Cong., 2nd Sess. 67 (1988) (Testimony of Deputy 
Assistant Attorney General Mark M Richard).
    Article 3(1)(b) permits the Central Authority of the 
Requested State to deny a request if it relates to a political 
offense. Similar restrictions are found in other mutual legal 
assistance treaties.
    Article 3(1)(c), like Article 3(1)(c) of the U.S.-Bahamas 
Treaty, permits the Requested State to deny a request if the 
evidence requested is to be used to try a person in the 
Requesting State on a charge for which that person has already 
been acquitted or convicted in that State, or a charge for 
which the person was in jeopardy of being convicted, as 
jeopardy is defined in the law of the Requesting State.
    Article 3(1)(d), also inspired by the U.S.-Bahamas Treaty, 
permits a request to be denied if the Central Authority 
determines that there are substantial grounds for believing 
that granting the assistance would facilitate the prosecution 
or punishment of the person identified in the request on 
account of his race, religion, nationality, or political 
opinions. This provision was of special importance to Panama, 
because it has a multiracial society and because the free 
expression of political opinion was ruthlessly suppressed under 
General Manuel Noriega's dictatorship. The United States 
understands the term ``on account of'' to limit the application 
of this provision to cases in which the race, religion, or 
political opinion of the offender is the governing motive for 
the prosecution, as opposed to the desire to punish criminal 
offenses. Where a request to the United States Central 
Authority will ask the Department of State to assist in 
determining whether the request should be denied on this basis.
    Article 3(1)(e) is based on Article 3(2)(c) of the U.S.-
Cayman Treaty and Article 3(1)(e) of the U.S.-Bahamas Treaty, 
and permits the Central Authority of the Requested State to 
deny a request if it finds that the request fails to contain 
reasonable grounds to believe that a crime was committed, or 
that the information sought in the request is not relevant to 
that crime, or that the requested information is not in the 
territory of the Requested State. The phrase ``reasonable 
grounds to believe'' is not the equivalent of a prima facie 
case, and it certainly is not intended to require either State 
to prove the guilt of the suspects beyond a reasonable doubt. 
Since many requests will be made at the investigative stage, it 
is unreasonable to oblige the Requesting State to prove the 
case before the evidence has been assembled against the 
suspects. The phrase ``reasonable grounds to believe'' also 
does not equate to the ``probable cause'' requirement in United 
States law for the issuance of a search or arrest warrant. 
Rather, the phrase was intended to require only that each State 
support each request with a precise, rational explanation for 
its belief that a crime covered by the Treaty has occurred or 
will occur. This will usually involve describing facts 
indicating the offense has occurred, and setting forth the 
justification for seeking the evidence. This provision thereby 
assures the Requested State that the request is not a ``fishing 
expedition.'' It is anticipated that neither State will allow 
challenges to the credibility of statements in the request, nor 
demand that the Requesting State supply ``evidence'' or 
affidavits to support the request. Instead, the Central 
Authority of the Requested State has the discretion to reject a 
request if it is convinced that the information in the request 
(which is presumed to be true) fails to make out a case for 
producing the evidence.
    Finally, Article 3(1)(f) permits the Central Authority to 
deny assistance if the request does not conform to the Treaty. 
This would include requests which fail to contain all of the 
requisite information.
    Article 3(2) is similar to Article 3(2) of the U.S.-Swiss 
Treaty, and permits the Requested State to impose appropriate 
conditions on its assistance in lieu of denying a request 
outright. For example, either State might request information 
from the other which could be used either in a routine criminal 
prosecution or in a prosecution not covered by the Treaty. This 
paragraph would permit the Requested State to provide the 
information on the condition that it be used only in the 
routine criminal case. It is anticipated that the Requested 
State would notify the Requesting State of proposed conditions 
before actually delivering the evidence, thereby according the 
Requesting State an opportunity to indicate whether it is 
willing to accept the evidence subject to the conditions. If it 
does accept the evidence, it must respect the conditions 
specified by the Requesting State with respect to the evidence.
    Article 3(3) states that a request for assistance need not 
be executed immediately where execution would interfere with an 
investigation or legal proceeding in progress in the Requested 
State. The Central Authority of the Requested State will 
determine when to apply this provision. The Central Authority 
of the Requested State may, in its discretion, take such 
preliminary action as it deems advisable to obtain or preserve 
evidence which might otherwise be lost before the conclusion of 
the investigation or legal proceeding taking place in that 
State. If this is done, the Requesting State should not be 
seriously disadvantaged by having to wait until the conclusion 
of the proceedings in the Requested State.
    Article 3(4) effectively requires that the Central 
Authority of the Requested State promptly notify the Central 
Authority of the Requesting State of the reason for denying or 
postponing execution of the request. Thus, when a request is 
refused or only partly executed, the Requested State will 
provide some explanation for not providing all of the 
information or evidence sought. This will eliminate 
misunderstandings which can arise in the operation of the 
Treaty, and enable the Requesting State to better prepare its 
requests in the future.

                     article 4--central authorities

    Article 4 of the Treaty provides that each State shall 
designate a ``Central Authority.'' The United States Central 
Authority will make requests to Panama on behalf of federal 
agencies, state agencies, and local law enforcement authorities 
in the United States, and Panama's Central Authority will make 
all requests emanating from the authorities there. It is 
understood that some discretion will be exercised by the 
Central Authority of the Requesting State as to the form and 
content of requests, and as to the number and priority of 
requests. The Central Authority of the Requested State is 
responsible for receiving each request from the other, 
transmitting it to the appropriate federal or state agency, 
court, or other authority for execution, and ensuring that a 
timely response is made.
    Article 4(2) provides that the Attorney General will be the 
Central Authority for the United States, as is the case under 
all United States mutual legal assistance treaties. The 
Attorney General has delegated his duties as Central Authority 
under mutual assistance treaties to the Assistant Attorney 
General in charge of the Criminal Division under 28 C.F.R. 
Sec. 0.64-1.\11\
    \11\ The Assistant Attorney General for the Criminal Division has 
in turn redelegated his authority to the Deputy Assistant Attorneys 
General and to Director of the Criminal Division's Office of 
International Affairs. Directive No. 81, 44 FR 18661, March 29, 1979, 
as amended at 45 FR 6541, January 29, 1980; 48 FR 54595, December 6, 
1983.
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    Article 4(3) states that the Minister of Government and 
Justice of Panama will serve as the Central Authority for 
Panama. Panamanian authorities said that the Minister of 
Government and Justice will review requests from the United 
States under the treaty and forward them to the Panamanian 
Attorney General or other competent authority for prompt 
execution. The Panamanian authorities explained that in Panama 
the Attorney General is not a part of the executive branch of 
Government, and hence is not politically accountable to the 
President in the same way that the Minister of Government and 
Justice is accountable. For this reason, the Panamanian 
Government believes it is appropriate that it be the Minister 
of Government and Justice, not the Attorney General, who 
considers and exercises the discretionary bases for denial of 
requests outlined in Article 3. Once the request has passed 
this policy level review by the Minister of Government and 
Justice, it generally will be the function of the Attorney 
General to make the actual arrangements for execution of the 
request when compulsory process is necessary to carry out a 
request. In other instances, the Ministry envisions sending 
requests directly to the appropriate Panama Government office 
for execution (e.g., to the Public Registry for corporate 
records checks, or the Technical Judicial Police for criminal 
records checks).
         article 5--Contents of Requests for Mutual Assistance

    This article is similar to Article 29 of the U.S.-Swiss 
Treaty, which, in turn, is based on Article 14 of the European 
Convention on Mutual Assistance in Criminal Matters.\12\
    \12\ Council of Europe Convention No. 30 (United States not a 
party) 472 UNTS 185.
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    The first paragraph requires that requests be made in 
writing if compulsory process--judicial subpoenas, search 
warrants, or the like--are necessary for execution, or if the 
Requested State has indicated that a written request is 
necessary. In an emergency, an oral request could be made, but 
it must be confirmed in writing ``forthwith.''
    Article 5(2) lists information which is deemed crucial to 
efficient operation of the agreement, and so must be included 
in each request. Article 5(3) outlines the kinds of information 
which should be provided ``to the extent necessary and 
possible.'' In keeping with the intention of the parties that 
requests be as simple and straightforward as possible, there is 
no requirement under the Treaty that a request be legalized or 
certified in any particular manner.
    Because this article of the Treaty is based on Article 5 of 
the U.S.-Bahamas treaty, no specific mention is made of the 
language in which the requests are to be presented by the 
parties. However, the language issue was discussed by the 
negotiators, and it was mutually agreed by Panama and the 
United States that requests for assistance under the treaty 
will be submitted in the language of the Requested States 
unless, in exceptional circumstances, the parties agree 
otherwise.

                  article 6--execution of the request

    The first paragraph of Article 6 requires each State to 
promptly undertake diligent efforts to execute a request. The 
Central Authority which receives a request will first review 
the request and immediately notify the Central Authority of the 
Requesting State if it is of the opinion that the request does 
not comply with the treaty's terms. If the request does satisfy 
the treaty's requirements and the assistance sought can be 
provided by the Central Authority itself, the request will be 
fulfilled without delay. If the request meets the treaty's 
requirements but execution requires action by some other agency 
in the Requested State, the Central Authority will see to it 
that the request is promptly transmitted to the correct agency 
for execution. Where the United States is the Requested State, 
it is anticipated that most requests will be transmitted to 
federal investigators, prosecutors, or judicial officials for 
execution. However, a request may be transmitted to state 
officials for execution if the Central Authority deems it 
proper to do so.
    The first paragraph also authorizes and requires the 
federal, state, or local agency or authority selected by the 
Central Authority to use all legal means within its power to 
execute the request. The negotiators specifically discussed the 
fact that the Treaty--and this article in particular--provided 
all necessary legal authority (i.e., powers or affirmative 
authority to act) necessary for Panamanian officials to carry 
out obligations undertaken by the Panamanian Government in the 
Treaty. This understanding is addressed in paragraph 3 of the 
Annex.
    This provision was not intended to authorize the use of the 
grand jury in the United States for the collection of evidence 
pursuant to a request from Panama. Rather, it is anticipated 
that when a request from Panama requires compulsory process for 
execution, the Department of Justice would ask a federal court 
to issue the necessary process or court order under 28 U.S.C. 
Sec. 1782 and this treaty.
    If execution of the request entails action by a judicial or 
administrative agency, the Central Authority of the Requested 
State shall arrange for the presentation of the request to that 
court or agency at no cost to the other State. Since the cost 
of retaining foreign counsel to present and process letters 
rogatory requests abroad is sometimes quite high, this 
provision for reciprocal legal representation should be a 
significant advance in bilateral legal cooperation. Should the 
Requested State choose to hire private counsel in connection 
with a particular request, it is free to do so.
                            article 7--costs

    Article 7 proceeds from the basic premise that the 
Requesting State should bear all expenses incurred in the 
execution of the request except for the costs of the 
presentation of its request to the appropriate authorities in 
the Requested State, which is provided at no cost pursuant to 
Article 6, and the ordinary expenses (such as filing fees and 
the like) connected with legal proceedings in the Requested 
State.
    The United States expects that this Article will be applied 
in the same way as the corresponding article in the U.S.-
Bahamas Treaty. During the negotiations with the Bahamas, a 
recurring problem in this area was specifically addressed: the 
cost of legal representation of witnesses. When United States 
authorities serve a subpoena in the United States to obtain 
testimony from an individual or institution here, the recipient 
of the subpoena is ordinarily entitled to no more than a modest 
stipend or ``witness fee.'' \13\ Of course, the witness is free 
to seek advice of legal counsel with respect to whether and how 
to respond. However, the witness has no constitutional or 
statutory right to call upon the United States Government to 
pay for such legal consultation.
    \13\ For example, under federal law a witness is currently entitled 
to $30 a day witness fee and up to $75 a day ``subsistence.'' 28 U.S.C. 
Sec. 1821.
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    On the other hand, the United States has occasionally asked 
individuals or institutions abroad to cooperate with one of our 
criminal investigations, and been told by the witness that the 
bank or business secrecy laws of the witness' country bar him 
from doing so unless certain steps are taken (such as obtaining 
the permission of the local courts). The United States 
routinely agrees to assist the witness in any appropriate way 
which does not involve paying legal fees associated with the 
matter.
    During the negotiations with the Bahamas, the United States 
delegation was concerned because when the United States makes a 
request to another country for evidence through letters 
rogatory, and the courts in that country summon the individual 
or institution to provide the evidence, the witness sometimes 
insists that the United States should pay for consultation with 
counsel in connection with the summons. Both delegations agreed 
that it is unfair to call upon the Requesting State routinely 
to pay the legal expenses of witnesses responding to the 
Requested State's compulsory process issued pursuant to 
requests under the treaty. Where the witness is responding to a 
command from the court in his own country (rather than a 
request from a foreign government) to produce evidence or to 
provide testimony, the role (if any) \14\ of witness counsel 
and payment of such counsel should be governed by the same 
rules which would apply in any other proceeding before that 
court. The fact that the local court's command is issued in aid 
of a foreign prosecution should not oblige the foreign 
government to pay expenses not ordinarily incurred in similar 
proceedings in the Requested State. Witnesses subpoenaed in the 
United States in connection with a foreign country's letters 
rogatory under 28 U.S.C. Sec. 1782 do not receive reimbursement 
for the costs of counsel, and neither the United States 
Government nor any partners to the mutual legal assistance 
treaties now in force have ever suggested that the Requesting 
State bear such costs in connection with a request.
    \14\ For an example of the kind of difficulties which can be 
encountered when counsel for witnesses are involved, see Req. v. 
Rathbone, Ex p. Dikko, [1985] 2 W.L.R. 375.
---------------------------------------------------------------------------
    Based on these considerations, the U.S.-Bahamas Treaty 
provides that witness fees are not a cost for which the 
Requesting State is responsible under subsection 7(1) or 7(2). 
Article 7 of the U.S.-Panama Treaty is based on this language. 
Thus, it is clear that the treaty does not impose an obligation 
on the Requesting State to finance legal consultation, but does 
allow that State to agree, on a case by case basis, to pay for 
``extraordinary expenses'' in situations in which it deems it 
especially just and appropriate to do so.
                     article 8--limitations on use

    The first paragraph of Article 8 requires that information 
provided under the treaty will not be used for any purpose 
other than that stated in the request under Article 5(2)(e) 
without the consent of the Central Authority of the Requested 
State.
    The second paragraph requires that the State which has 
obtained evidence keep the evidence confidential. Under most 
United States mutual legal assistance treaties, conditions of 
confidentiality are imposed only when necessary, and are 
tailored to fit the circumstances of each particular case.\15\ 
For instance, the Requested State may wish to cooperate with 
the investigation in the Requesting State but choose to limit 
access to information which might endanger the safety of an 
informant, or unduly prejudice the interests of persons not 
connected in any way with the matter being investigated in the 
Requesting State. However, this Treaty, like the U.S.-Bahamas 
Treaty, requires that all evidence provided in response to 
requests under the treaty must be kept confidential unless 
otherwise agreed.
    \15\ U.S.-Netherlands Treaty, Article 11(1); U.S.-Colombia Treaty, 
Article 8(2); U.S.-Italy Treaty, Article 8(1); U.S.-Canada Treaty, 
Article 9(1); and U.S.-Thailand Treaty, Article 7(3).
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    The Supreme Court has held that in some circumstances it 
would violate the Constitution's due process guarantees for the 
Government to suppress evidence which is exculpatory to the 
accused.\16\ For this reason, Article 8(2) contains an 
exception permitting the use of the information to the extent 
that it is needed for investigations or prosecutions forming 
part of the prosecution of the criminal offense described in 
the request. This is consistent with the overall purpose of the 
Treaty, which is the production of evidence for trial, and 
which would be frustrated if the Requested State could let the 
Requesting State see valuable evidence but impose restrictions 
preventing the Requesting State from using the evidence. In the 
event that disclosure of evidence obtained under the Treaty was 
required in a proceeding involving a matter other than that 
described in the request, the United States would be required 
to consult in advance with the Government of Panama in order to 
fashion a method of disclosure consistent with the requirements 
of both States.
    \16\ See Brady v. Maryland, 373 U.S. 83 (1963).
    It is anticipated that some United States requests for 
assistance may contain information which under our law must be 
kept confidential. For example, it may be necessary to set out 
information which is ordinarily protected by Rule 6e, Federal 
Rules of Criminal Procedure, in the course of an explanation of 
``the subject matter and nature of the investigation or 
proceeding,'' as required by Article 4(2)(b). Therefore, 
Article 8(5) of the treaty enables the Requesting State to call 
upon the Requested State to keep the information in the request 
confidential.\17\ If the Requested State cannot execute the 
request without disclosing the information in question (as may 
be the case if execution requires a public judicial proceeding 
in the Requested State), or for some reason this 
confidentiality cannot be assured, the treaty obliges the 
Requested State to so indicate, thereby giving the Requesting 
State an opportunity to withdraw the request rather than risk 
jeopardizing its investigation or proceeding by public 
disclosure of the information. This provision may be 
particularly important in requests made to Panama because it is 
not clear whether Panamanian financial institutions can 
disclose financial documents regarding a customer without prior 
notice to the customer even if the notice thwarts law 
enforcement objectives.
    \17\ It is quite similar to U.S.-Mexico Treaty Article 4(5); U.S.-
Canada Treaty, Article IX(2); and U.S.-Italy Treaty, Article 8(2).
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    Once evidence obtained under the treaty has been revealed 
to the public in a trial, that information effectively becomes 
part of the public domain. The information is likely to become 
a matter of common knowledge, perhaps even cited or described 
in the press. When that occurs, it is practically impossible 
for the Central Authority of the Requesting State to continue 
to block the use of that information by third parties or other 
government agencies. Therefore, some United States mutual legal 
assistance treaties permit evidence obtained under the treaty 
to be used for any purpose after it has become public in a 
trial resulting from the proceedings described in the 
request.\18\ However, Article 8(4), like the similar article in 
the U.S.-Bahamas Treaty and the U.S.-Cayman Treaty, states that 
once evidence obtained under the treaty has been made public in 
a proceeding forming part of the request, the evidence may be 
used if one of three exceptions apply.
    \18\ See U.S.-Canada Treaty, Article XI(3).
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    First, under Article 8(4)(a), the evidence can be used for 
any purpose against persons who were convicted in a criminal 
trial for an offense covered by the treaty. For example, if 
evidence is provided under the treaty for use in a criminal 
trial for fraud, and the defendant is convicted of the offense, 
the evidence could be used by other government officials--
including tax authorities--against the convicted person for any 
purpose, including assessing and collecting taxes due on the 
fraudulently obtained funds.
    Second, Article 8(4)(b) states that the evidence can be 
used without restriction for any criminal prosecution of a 
person for offenses falling within the treaty. This paragraph 
applies regardless of whether the requesting State secured a 
conviction of the person who was the defendant in the case upon 
which the initial request was based. For instance, if evidence 
is provided under the treaty for use in a criminal trial of Mr. 
A on securities fraud charges, and the evidence reveals that 
Mr. B also participated in the crime, the evidence may be 
freely used to prosecute Mr. B even if Mr. A is acquitted at 
trial. Similarly, if evidence were obtained in connection with 
one treaty offense (such as fraud), and the evidence discloses 
the commission of another treaty offense (such as murder), the 
evidence could be used by the Requesting State in a prosecution 
for that second treaty offense without violating this article, 
even if no prosecution ever took place for the crime on which 
the initial request was based.
    Finally, Article 8(4)(c) authorizes the use of the evidence 
in civil or administrative proceedings related to the recovery 
of the unlawful proceeds of a criminal offense covered by the 
treaty from a person who has knowingly received them. The 
evidence may also be used in forfeiture to the government of 
the unlawful proceeds or instrumentalities of a criminal 
offense, or in collecting taxes or enforcing tax penalties 
resulting from knowingly receiving the proceeds of a criminal 
offense covered by the treaty. This is consistent with Article 
14(2) of the treaty, which obliges the parties to assist one 
another in the forfeiture of criminally obtained assets, in 
securing restitution to the victims of crimes, and in enforcing 
sentences involving fines.
    Under Article 18(3), the restrictions outlined in Article 8 
are for the benefit of the parties to the treaty--the United 
States and Panamanian Governments--and the enforcement of these 
provisions is left entirely to the Parties.

              Article 9--Testimony in the Requested State

    Paragraph 1 of Article 9 states that the Requested State 
may compel a person within its jurisdiction to testify or 
produce documents or articles needed as evidence in the 
Requesting State. Paragraph 2 of the annex also points out that 
this Article may be used by either Contracting State to obtain 
currency transaction information from the other Contracting 
State in connection with offenses covered by the treaty.
    The compulsion \19\ contemplated by this article can be 
accomplished by subpoena (if the Requested State's law so 
provides) or any other means available under the law of that 
country. This provision, read together with Article 1(4), means 
that the procedure for executing a request under the treaty 
would have to be one which conforms to the laws of the 
Requested State. It should be stressed that it is the treaty 
that determines whether assistance is required, and local law 
should govern the very different (if equally important) 
question of how the assistance is provided.
    \19\ The use of the word ``may'' appears at first glance to allow 
each Party to treat the execution of requests for testimony or 
production of evidence as discretionary. That was not the intention of 
the negotiators. Rather, the word ``may'' was used in the treaty in 
order to make it clear that compulsory process is not required in every 
case. For instance, a witness may be perfectly willing to provide the 
needed testimony voluntarily, and the negotiators were concerned that 
using the word ``shall'' instead of ``may'' might appear to oblige the 
Requested State to issue a subpoena or other compulsory process even if 
it were not necessary. The treaty establishes a mandatory obligation to 
arrange the production of the requested testimony or evidence, leaving 
it to the Requested State's discretion whether to use compulsory 
process to meet that obligation.
---------------------------------------------------------------------------
    This article, read together with Article 1(5), insures that 
no person would be compelled to furnish information if he has a 
right not to do so under the law of the Requested State. Thus, 
a witness questioned in the United States pursuant to a treaty 
request from Panama may invoke any of the testimonial 
privileges (such as attorney-client privilege, interspousal 
privilege, etc.) usually available in proceedings here, as well 
as the constitutional privilege against self-incrimination.\20\ 
A witness testifying in Panama may raise any of the privileges 
available under Panamanian law.
    \20\ This is consistent with Title 28, United States Code, Section 
1782.
    Since the law is unclear on the extent to which a person in 
one country may stand on a privilege available only under the 
law of a foreign country, the treaty neither requires nor 
forbids the recognition in the Requested State of privileges 
existing only in the Requesting State. Article 9(2) does 
require that in cases in which a witness attempts to assert a 
privilege which does not exist under the law in the Requested 
State, the authorities in the Requested State will take the 
desired evidence and turn it over to the Requesting State along 
with notice that it was obtained over a claim of privilege. The 
applicability of the privilege can then be determined in the 
Requesting State, where the scope of the privilege and the 
legislative and policy reasons underlying it are best 
understood.\21\ A similar provision appears in many of our 
recent mutual legal assistance treaties.
    \21\ Cf. R. & J. Dick Co. v. Bass, 295 F. Supp. 758 (N.D. Ga. 
1966); Reg. v. Rathbone, Ex p. Dikko [1985] 2 W.L.R. 375.
---------------------------------------------------------------------------
    The third and fourth paragraphs provide that all interested 
parties, including the defendant and his counsel in criminal 
cases, may be permitted to be present and, subject to the laws 
of the Requested State, shall be allowed to pose questions 
during the taking of testimony under this article.
    Article 9(5) states that business records produced pursuant 
to the treaty shall be authenticated by having a custodian of 
the records or other qualified person complete, under oath, a 
certification in a specified form. A model of the form to be 
used by United States authorities excecuting a request from 
Panama is appended to the treaty as Form A(1); a form for 
Panamanian authorities to use in executing a request from the 
United States is appended at Form A(2). Thus, the provision 
establishes a procedure for authenticating foreign records in a 
manner essentially similar to that followed in Title 18, United 
States Code, Sec. 3505 or Sec. 29(c) of the Canada Evidence 
Act. It is understood that the last sentence of the article 
provides for the admissibility of authenticated documents 
evidence without additional foundation or authentication. With 
respect to both the United States and Panama, this paragraph is 
self-executing, and does not need implementing legislation.
  Article 10--Transferring Persons in Custody for Testimonial Purposes

    In some recent criminal cases, a need has arisen for the 
testimony at trial of a witness serving a sentence in another 
country. In some instances, the country involved was willing 
and able to ``lend'' the witness to the United States 
Government, provided the witness would be carefully guarded 
while here and returned at the conclusion of his testimony.\22\ 
In one or two recent cases, the United States Government was 
able to arrange for federal inmates here to be transported to 
foreign countries to assist in criminal proceedings there. 
Paragraph 1 of Article 10 calls for mutual assistance in 
situations of this kind, and thereby provides a legal basis for 
cooperation in these matters. The paragraph is based on Article 
26 of the U.S.-Swiss Treaty.
    \22\ Federal law provides for this situation. See Title 18, United 
States Code, Section 3508.
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    There have also been recent situations in which a person in 
custody in the United States in a criminal matter has demanded 
permission to travel to another country to be present at a 
deposition being taken there in connection with the case.\23\ 
The second paragraph of the article addresses this situation.
    \23\ See United States v. King, 552 F. 2d 833 (9th Cir. 1976).
---------------------------------------------------------------------------
    The article's third paragraph provides express authority 
for the receiving State to maintain the person in custody 
throughout his stay there, unless the other State specifically 
authorizes release. The paragraph also authorizes the receiving 
State to return the person in custody to the other State, and 
provides that this return will occur as soon as circumstances 
permit, or as otherwise agreed, but in no event later than the 
date on which the person would expect to be released from 
custody in the State from which he was transferred. The 
transfer of a prisoner under this article requires the consent 
of the person involved and of both countries, but does not 
require the prisoner to consent again to his return to the Sate 
where the transfer began. Once the receiving State has agreed 
to assist the sending State's investigation or proceeding 
pursuant to this article, it would be inappropriate for the 
receiving State to hold the person transferred and require 
extradition proceedings before allowing him to return to the 
sending State as agreed. Therefore, the paragraph states that 
extradition proceedings will not be required before the return 
of the person transferred.
             article 11--testimony in the requesting state

    This article provides that upon request the Requested State 
shall invite witnesses who are located in its territory and 
needed in the Requesting State to travel to the Requesting 
State to testify there if at all possible. Of course, the 
Requesting State would be expected to pay the expenses of such 
an appearance, and the treaty provides that the witness shall 
be informed of that fact, and of the amount and kind of 
allowances and expenses which the Requesting State will provide 
in a particular case. This information should be specified by 
the Requesting State in its request, pursuant to Article 
5(3)(e). An appearance in the Requesting State under this 
article is not mandatory, and the prospective witness may 
refuse the invitation.

                        article 12--safe conduct

    This article, like Article 27 of the U.S.-Swiss Treaty, 
provides that a person who is in the Requesting State to 
testify or for confrontation purposes pursuant to a request 
under Article 10 or 11 of the Treaty shall be immune from 
criminal prosecution, detention, or any restriction on personal 
liberty, or from the service of process in civil suit while he 
is in the Requesting State. This ``safe conduct'' is limited to 
acts or convictions which preceded the witness' departure from 
the Requested State. This provision does not prevent the 
prosecution of a person for perjury or other crimes committed 
while in the Requesting State.
    The article's applicability to a person transferred under 
Article 10 is necessarily limited, since Article 10 requires 
that a person be kept in custody unless the State from which he 
was transferred has consented to his release.
    The second paragraph states that the safe conduct 
guaranteed in this article expires ten days after the person 
has been officially notified that his presence is no longer 
required, or if he leaves the Requesting State and thereafter 
returns to it.
          article 13--providing records of government agencies

    Article 13 serves to insure speedy access to government 
records, including records of the executive, judicial, and 
legislative units at the federal, state, and local levels in 
either country. The kinds of government information which will 
be most commonly sought from Panama will include records from 
the Registrar of Companies, the records of convictions in 
Panamanian courts, or documents from the files of the police or 
other investigative authorities. Panamanian requests to the 
United States for government documents are expected to fall 
generally in the same categories.
    The first paragraph obliges each State to furnish to the 
other copies of publicly available records of a government 
agency. The term ``government agency'' includes executive, 
judicial, and legislative units at the federal, state, and 
local level in either country.
    The second paragraph provides that the Requested State 
``may'' share with its treaty partner copies of non-public 
information in government files. The article states that the 
Requested State may only utilize its discretionary authority to 
turn over information in its files ``to the same extent and 
under the same conditions'' as it would to its own law 
enforcement or judicial authorities. It is the intention of the 
negotiators that the Central Authority of the Requested State 
determine what that extent and what those conditions would be. 
This provision was made discretionary because government files 
in each State contain some information which would be available 
to investigative authorities in that State, but which would 
justifiably be deemed inappropriate to release to a foreign 
government. Examples of instances in which assistance might be 
denied under this provision would be where disclosure of the 
information is barred by law in the Requested State or where 
the information requested would identify or endanger an 
informant, prejudice sources of information needed in future 
investigations, or reveal information which was made available 
to the Requested State in return for a promise that it not be 
divulged to anyone.
    The third paragraph states that documents provided under 
this article will be authenticated using a certificate in a 
form appended to the treaty. Thus, the authentication will be 
conducted in a manner similar to that required by Rule 902(3), 
Federal Rules of Evidence, and the records will be admissible 
into evidence without additional foundation or authentication.
    The article refers to the provision of copies of government 
records, but the Requested State would not be precluded from 
delivering the original of the government records to the 
Requesting State, upon request, if the law in the Requested 
State permits it and if it is essential to do so.
            ARTICLE 14--ASSISTING IN FORFEITURE PROCEEDINGS

    A primary goal of the treaty is to enhance the efforts of 
both States in the war against narcotics trafficking. One major 
strategy in that drug enforcement effort by United States 
authorities is to seize and confiscate the money, property, and 
other proceeds of drug trafficking. Article 14, which is 
identical to Article 14 of the U.S.-Bahamas Treaty and similar 
to Article 17 of the U.S.-Canada Treaty, is designed to further 
that strategy.
    The first paragraph authorizes the Central Authority of one 
State to notify the other of the existence in the latter's 
territory of fruits or instrumentalities of a serious offense 
such as drug trafficking. The term ``fruits and 
instrumentalities'' would include things such as money or other 
valuables either used in the crime or purchased or obtained as 
a result of the offense.
    Upon receipt of notice under this article, the Central 
Authority of the State in which the objects are located may 
take whatever action is appropriate under the law of the state. 
For instance, if the assets in question are located in the 
United States and are the fruit of a fraud in violation of 
Panamanian law, the assets could be seized in aid of a 
prosecution under 18 U.S.C. Sec. 2314, or in anticipation of 
efforts by the lawful owner for the return of the assets. If 
the assets are located in Panama and are the fruit of a fraud 
in violation of United States law, it is expected that similar 
action could be taken pursuant to Panamanian law.\24\ If the 
assets are the result of drug trafficking, it is anticipated 
that the parties will move quickly and expeditiously to freeze 
them and ensure confiscation.\25\
    \24\ For example, in 1978, about 900 members of the San Francisco-
based ``People's Temple'' cult died when their leader, the Rev. Jim 
Jones, led them in a ritual of murder and mass suicide at the group's 
commune in Guyana. At the request of the United States Justice 
Department, the Panamanian Government froze $6 million in People's 
Temple assets on deposit in Panama, on the grounds that the funds were 
obtained from the cults' members by fraud. In 1980, these funds were 
turned over to the United States to distribute to the families of the 
victims and to reimburse the federal government for the expenses of 
returning the victims' bodies to the United States. Associated Press, 
February 29, 1980.
    \25\ Panama has signed and the United States has signed and 
ratified the United Nations Convention Against the Illicit Traffic in 
Narcotic Drugs and Psychotropic Substances, done at Vienna December 20, 
1988 and entered into force for the United States, November 11, 1990, 
28 I.L.M. 493 (March 1989). Article 3 of the Convention obliges the 
Parties to enact legislation to confiscate drug proceeds.
    Title 18, United States Code, Sec. 981(a)(1)(B) also allows 
the forfeiture to the United States of property ``which 
represents the proceeds of an offense against a foreign nation 
involving the manufacture, importation, sale, or distribution 
of a controlled substance (as such term is defined for the 
purposes of the Controlled Substances Act) within whose 
jurisdiction such offense or activity would be punishable by 
death or imprisonment for a term exceeding one year and which 
would be punishable by imprisonment for a term exceeding one 
year if such act or activity had occurred within the 
jurisdiction of the United States.'' The United States 
delegation expects that Article 14 of the treaty will permit 
full implementation of this legislation.\26\
    \26\ The United States legislation is consistent with the laws in 
other States, such as Switzerland, Canada, and the United Kingdom, and 
the movement among States is toward legislation of this kind for use in 
drug enforcement.
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    Similarly, in Panama, Law 23 of December 30, 1981, permits 
the Panamanian Government to seize the proceeds of drug 
trafficking committed anywhere in the world.\27\ Panamanian 
authorities have relied on this statute to freeze drug money in 
Panama when such funds were brought to its attention by United 
States law enforcement authorities. Article 14 of the treaty 
should permit United States and Panamanian authorities, working 
together, to utilize Law 23 even more effectively.
    \27\ Article 6 of Law 23 amends Article 261 of the Panamanian 
Criminal Code to make it an offense to violate Panama's drug laws from 
abroad, or to conduct transactions in Panamanian territory ``with 
proceeds deriving from such drug-related crimes.'' Article 25 of Law 23 
states: ``The investigations of crimes listed in Article 261 of the 
Criminal Code, as amended by this Law, can also be initiated in 
cooperation with or upon request by the State in which such crimes have 
been committed.''
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    The second paragraph of Article 14 states that the parties 
to this treaty may aid one another in proceedings leading to 
the forfeiture of the proceeds of crime. The traditional rule 
was that no state is obliged to aid another in the execution of 
penal laws respecting enforcement of fines or forfeiture of 
criminal assets. However, this rule is gradually changing, at 
least where the foreign country's laws are designed to provide 
redress to individual victims, or where the foreign country has 
already perfected its title to the assets it claims.\28\ 
Moreover, any country is free to assume a treaty obligation 
broader than a customary international obligation. In Article 
14(2), the parties to this treaty agree to aid one another, on 
request, in proceedings leading to the forfeiture of illegally 
obtained assets, restoring illegally obtained funds or articles 
to their rightful owners, and the collection of fines imposed 
as sentences in criminal prosecutions.
    \28\ See, e.g., Mutual Assistance in Criminal Matters: A 
Commonwealth Perspective, prepared by Dr. David Chaikin and 
Commonwealth Secretariat for the meeting of Commonwealth Law Ministers, 
Colombo, Sri Lanka, February 14-18, 1985, pp. 32-34.
    Thus, if the law of the Requested State enables it to seize 
assets in aid of a proceeding in the Requesting State or 
enforce a judgment of forfeiture or fine levied in the 
Requesting State, the treaty requires the Requested State to do 
so. The article does not mandate institution of forfeiture 
proceedings in either country against property identified by 
the other if the relevant prosecution authorities do not deem 
it proper to do so.
    United States law also permits the transfer of forfeited 
property or a portion of the proceeds of the sale thereof to 
any foreign country which participated directly or indirectly 
in the seizure or forfeiture of the property.\29\ The amount 
transferred will generally reflect the contribution of the 
foreign government to the law enforcement activity which led to 
the seizure or forfeiture of the property under United States 
law. United States sharing statutes require that the transfer 
be authorized in an international agreement between the United 
States and the foreign country, and be authorized by the 
Attorney General or the Secretary of the Treasury and agreed to 
by the Secretary of State. Article 14 is intended to authorize 
and provide for the transfers of forfeited assets or the 
proceeds of such assets to the other State under the new United 
States law because Article 14 enables either State to transfer 
forfeited assets to the extent permitted by their respective 
laws.
    \29\ Title 18, United States Code, Sec. 981(i)(1).
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                     article 15--search and seizure

    It is sometimes in the interests of justice for one State 
to ask another to search for, secure, and deliver articles or 
objects needed in another State for use as evidence or for 
other purposes. United States courts execute such requests now 
under 28 U.S.C. Sec. 1782,\30\ and Article 15 of the treaty 
creates a reciprocal framework for handling such a request.
    \30\ See e.g., United States Ex Rel. Public Prosecutor of 
Rotterdam, Netherlands v. Richard Jean Van Aalst, Case No. 84-67-Misc-
018 (M.D. Fla., Orlando Div.) cited in Ellis and Pisani, supra note 1 
at page 215.
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    Pursuant to Article 15(1)'s requirement that the request 
include ``information justifying such action under the laws of 
the Requested State,'' a request to the United States from 
Panama ordinarily will have to be supported by probable cause 
for the search. A United States request to Panama would have to 
satisfy the corresponding evidentiary standard there. It is 
contemplated that the request would be carried out in strict 
accordance with the law of the country in which the search is 
being conducted.
    Article 15(2) is designed to insure that a record is kept 
of articles seized and of articles delivered up under the 
treaty. This provision effectively requires that detailed and 
reliable information be kept regarding the condition of the 
article and the chain of custody between the time of seizure 
and the time of delivery to the Requesting State.
    Article 15(2) also requires that the certificates prepared 
for this purpose will be admissible without additional 
authentication at trial in the Requesting State and is intended 
to avoid the burden, expense, and inconvenience to the 
Requested State of sending its officials to the Requesting 
State to provide authentication and chain of custody testimony 
each time evidence produced pursuant to this Article is used. 
The treaty's injunction that the certificates be admissible 
without additional authentication at trial leaves the trier of 
fact free to accord the certificate only such weight as it is 
due.
              article 16--location and identity of persons

    Article 16 provides that the Requested State is to 
ascertain the whereabouts in the Requested State of persons 
(such as witnesses, potential defendants, or experts) where 
such information is of importance in connection with an 
investigation or proceeding covered by the treaty. The treaty 
requires only that the Requested State make ``best efforts'' to 
locate the person sought by the Requesting State.

                     article 17--serving documents

    Article 17 creates an obligation on the Central Authority 
of the Requested State to arrange for or effect the service of 
summons, complaints, subpoenas, or other legal documents at the 
request of the Central Authority of the other State.
    It is expected that when the United States is the Requested 
State, service will be made by registered mail (in the absence 
of any request by Panama to follow any specified procedure for 
service) and by the United States Marshal's Service in 
instances where personal service is requested.
    It is anticipated that this article will facilitate service 
of subpoena on United States citizens, pursuant to Title 28, 
Section 1783. However, the first paragraph of the article does 
not oblige the Requested State to serve any subpoena which 
requires the attendance of a person in the Requested State at a 
proceeding before an authority or tribunal in the Requesting 
State where serving such subpoena would be impractical due to 
the location of the person. Since this provision is based on 
Article 17(1) of the U.S.-Bahamas Treaty, we assume that the 
Panamanian authorities were concerned that their resources 
would be severely taxed by efforts to effect such service at 
remote locations in Panama. Therefore, we anticipate that where 
service is practicable--i.e., where the person is located in a 
metropolitan area--the request for service will be granted even 
if the subpoena calls for attendance in the Requesting State, 
just as it is under the U.S.-Bahamas Treaty.
    In order to allow sufficient time for service to be 
effected and for the respondent to make arrangements for his 
appearance, Article 17(2) provides that where the document to 
be served calls for the appearance of a person in the 
Requesting State, the document ordinarily must be transmitted 
by the Requesting State for the Requested State at least thirty 
days before the scheduled appearance. Thus, if the United 
States were to ask Panama to serve a subpoena issued pursuant 
to Title 28, United States Code, Section 1783 on a United 
States citizen in Panama, the request would have to be 
submitted well in advance of the hearing or trial at which the 
respondent is expected to appear.
    Article 18--Compatibility with Other Treaties and Internal Laws

    The first paragraph states that assistance procedures 
provided by this Treaty shall not prevent either State from 
granting assistance under any other international agreement to 
which it may be a party. It also provides that the Treaty shall 
not be deemed to prevent recourse to any assistance available 
under the internal laws of either country. Thus, the Treaty 
leaves the provisions of United States and Panamanian law on 
letters rogatory completely undisturbed, and does not alter any 
preexisting agreements concerning investigative assistance, 
such as the Protocol Amending the Single Convention on 
Narcotics Drugs, 1961, done at Geneva March 25, 1972, and 
entered into force for the United States August 8, 1975 (26 
U.S.T. 1439, T.I.A.S. 8118).
    The second paragraph is based on Articles 3 and 4 of the 
U.S.-Canada Treaty and Article 18(2) of the U.S.-Bahamas 
Treaty. It provides that a State which needs assistance in a 
case covered by the Treaty must make a request for that 
assistance pursuant to the Treaty unless some other 
international agreement or arrangement applies. The Parties 
intend that the Treaty serve as the primary means by which 
evidence in one country would be made available to law 
enforcement authorities in the other in cases covered by the 
Treaty. However, Article 18(2) does not apply to matters not 
covered by the Treaty, such as cases and investigations 
involving purely tax matters, and in these areas the parties 
may pursue the needed evidence at any time by any legal means 
available, including the unilateral use of domestic judicial 
process.
    Article 18(3) provides that the provisions of the Treaty do 
not give rise to any right on the part of a private person to 
impede execution of a request. Thus, an individual from whom 
records or testimony are sought would not be free to oppose the 
execution of the request by claiming that the request fails to 
comply with the Treaty's formal requirements (such as those 
specified in Article 5), or attempt to substitute his judgment 
for that of the Central Authority in deciding whether the 
substantive requirements of the Treaty (such as those in 
Article 3) have been met.
    Article 18(3) further provides that the Treaty is not 
intended to create any right to suppress or exclude evidence 
obtained thereunder. Therefore, evidence obtained under the 
Treaty by one State from the other State should not be 
suppressed or excluded from use in judicial proceedings on the 
ground that the Requesting State's request failed to comply 
with the provisions of the Treaty. This provision is intended 
to avoid involving the Requesting State's courts in second-
guessing the decision of the Requested State to honor the 
request in the first place.\31\ If the person can point to a 
recognized basis in the ordinary law of the Requesting State 
for not executing the request or for exclusion of the evidence 
or for the Requesting State's courts to exclude the evidence, 
that issue can be decided exactly as it would otherwise be 
handled. It should be noted that this is a standard provision 
in our treaties,\32\ and has limited applicability in Panama 
since that country's jurisprudence does not include any 
exclusionary rule.
    \31\ See United States v. Caramian, 468 F.2d 1370 (5th Cir. 1972); 
United States v. Marschner, 470 F. Supp. 201, 202-203 (D. Conn. 1979).
    \32\ Ellis and Pisani, supra note 1, at 211-212, 221-222. See also 
United States v. Johnpoll, 739 F.2d 702 (2d Cir. 1984).
                 article 19--improvement of assistance

    The first paragraph of the article encourages both parties 
to be aware of the opportunity presented by this agreement to 
insuring that other aspects of our bilateral relations benefit 
from the same kind of flexibility and mutual understanding that 
this Treaty reflects, particularly in the area of mutual legal 
assistance. For instance, it may be appropriate to consider 
initiating negotiations on assistance in civil matters.
    The United States experience has shown that as the parties 
to a treaty of this kind work together over the years various 
practical ways to make the treaty more effective become 
evident. The second paragraph of the article calls upon the 
States to share those ideas with one another and encourages 
them to agree on the implementation of such measures. Practical 
measures of this kind might include methods of keeping each 
other informed of the progress of investigations and cases in 
which treaty assistance was utilized and using the treaty to 
obtain evidence which might otherwise be sought under other 
methods which might be less acceptable in the Requested State. 
Similar provisions are in the U.S.-Canada Treaty and the U.S.-
Cayman Treaty.

             article 20--ratification and entry into force

    The penultimate article contains standard language 
concerning the procedure for exchange of the instruments of 
ratification, and the coming into force of the Treaty. As noted 
earlier, it is not anticipated that either Panama or the United 
States will need to enact any implementing legislation in order 
to bring the treaty into operation. Panama has completed its 
ratification process and is in a position to exchange 
instruments of ratification as soon as the United States Senate 
has given advice and consent to ratification, and the President 
has signed instruments of ratification for the United States.
                        article 21--denunciation

    The final article contains the standard provision 
concerning the procedure for terminating the treaty. The 
requirement that either State give six months' written notice 
to the other of an intent to terminate the treaty is not 
unusual in a treaty of this kind, and is similar to the 
requirement contained in United States mutual legal assistance 
treaties with Switzerland, Turkey, the Netherlands, the 
Bahamas, and Canada.

                            Entry Into Force

    This Treaty shall enter into force upon the exchange of 
instruments of ratification by the Governments of the United 
States of America and the Republic of Panama.

                   Text of Resolution of Ratification

    Resolved, (two-thirds of the Senators present concurring 
therein), That the Senate advise and consent to the 
ratification of the Treaty between the United States of America 
and the Republic of Panama On Mutual Assistance in Criminal 
Matters, With Annexes and Appendices, signed at Panama on April 
11, 1991. The Senate's advice and consent is subject to the 
following two provisos, which shall not be included in the 
instrument of ratification to be signed by the President:

          Nothing in this Treaty requires or authorizes 
        legislation, or other action, by the United States of 
        America prohibited by the Constitution of the United 
        States as interpreted by the United States.
          Pursuant to the rights of the United States under 
        this Treaty to deny requests which prejudice its 
        essential public policy or interest, the United States 
        shall deny a request for assistance when the Central 
        Authority, after consultation with all appropriate 
        intelligence, anti-narcotic, and foreign policy 
        agencies, has specific information that a senior 
        government official who will have access to information 
        to be provided under this Treaty is engaged in or 
        facilitates the production or distribution of illegal 
        drugs.