weighted score 4.7 · nine dimensions
Country Risk Profile
Panama
Sourcing risk, regulatory exposure and audit intelligence for Panama-origin supply chains.
Forced & child labour
4
Moderate risk in agricultural and informal sectors. Indigenous communities and Darién Gap migrants face elevated vulnerability. Not a major ILAB listing target.
Worker rights & FOA
4
ILO core conventions ratified. Freedom of association legally protected but enforcement gaps in free trade zones and informal economy.
OHS & audit transparency
4
Occupational health and safety framework exists but inspection capacity is limited. Audit access generally available for formal-sector suppliers.
Food & product safety
3
Food safety standards are reasonable for a middle-income country. Banana and seafood exports to the EU meet SPS requirements. RASFF alert rate is low.
Environmental & regulatory
5
Cobre Panamá copper mine closure (2023 Supreme Court ruling after mass protests) highlighted environmental governance tensions. Deforestation in Darién region is a concern.
Governance & anti-corruption
8
TI CPI 2025: 33/100. Panama Papers (2016) and Pandora Papers (2021) revealed systemic financial opacity. Money laundering risk remains elevated despite reforms.
Tariff & preferential access
5
EU-Central America Association Agreement provides preferential access. Colón FTZ facilitates re-export trade. USD-denominated economy reduces currency risk.
Non-tariff barriers
4
Regulatory complexity moderate. Financial services due diligence requirements elevated due to tax transparency concerns. Customs procedures generally efficient at major ports.
Supply chain traceability
5
Traceability is challenging for goods transiting the Colón FTZ, where re-export and transhipment activities can obscure origin. Direct exports from Panama are more traceable.
Labour & Social Risk
Labour & Social Risk
- Forced labour risk
- Panama is not listed on the US ILAB List of Goods Produced by Child or Forced Labor for most categories. However, agricultural and informal sectors carry moderate risk, particularly in domestic work and subsistence farming.
- Worker rights
- ILO C087 and C098 ratified. Freedom of association is legally protected but enforcement is uneven in the informal economy and free trade zones. The Colón Free Trade Zone has faced scrutiny over labour conditions.
- Migrant labour
- The Darién Gap migration corridor has made Panama a transit country for irregular migrants. Some migrants face exploitation in informal labour markets before continuing northward.
- Child labour
- Child labour persists in agriculture, particularly among indigenous communities. Government programmes have reduced prevalence but enforcement remains geographically uneven.
EU Regulatory Exposure
EU Regulatory Exposure
- GSP status
- Panama graduated from EU GSP. Standard MFN tariffs apply. The EU-Central America Association Agreement covers Panama, providing preferential tariff access for qualifying goods.
- Anti-dumping
- No significant EU anti-dumping measures currently in force against Panama-origin goods.
- EUDR exposure
- Limited direct EUDR exposure. Panama is not a major exporter of EUDR-regulated commodities to the EU, though some timber and cattle products may require due diligence.
- Financial services
- Panama was on the EU list of non-cooperative jurisdictions for tax purposes (grey list). The country has made commitments to improve tax transparency but remains under monitoring. Financial services sourcing carries elevated due diligence requirements.
- CBAM
- Minimal CBAM exposure. Panama is not a significant exporter of CBAM-covered goods (steel, aluminium, cement, fertilisers) to the EU.
Logistics & Supply Chain
Logistics & Supply Chain
- Panama Canal
- The Panama Canal is one of the world’s most critical logistics chokepoints, handling approximately 5% of global maritime trade. Returned to full capacity in September 2024 after severe drought restrictions in 2023–2024 that limited daily transits.
- Colón Free Trade Zone
- The Colón Free Trade Zone is the second-largest free trade zone in the world (after Hong Kong). It serves as a major re-export hub for goods flowing between Asia, Latin America, and the Caribbean.
- Port infrastructure
- Major container terminals include Balboa (Pacific side) and Manzanillo International Terminal and Cristobal (Atlantic side). All operated by global terminal operators (Hutchison, SSA Marine).
- Transit time to EU
- Direct services from Panama to Northwest Europe approximately 12–16 days. Panama’s position as a transhipment hub means strong connectivity to multiple EU ports.