Russia Maintains Pragmatic Partnership With Panama

Russia Maintains Pragmatic Partnership With Panama

Executive Summary:

• Panama’s role as a logistics and financial hub has positioned it as a functional partner in Moscow’s post-2022 sanctions adaptation strategy.
• Russia derives limited but tangible benefits from cooperation with Panama, particularly in logistics, financial and legal services, free economic zones, and humanitarian instruments such as vaccines and educational diplomacy.
• While Panama maintains a cautious and pragmatic stance toward Russia, its strong dependence on the United States constrains deeper political engagement, reinforcing a relationship that remains economically and technically useful but structurally limited.

In April 2025, Panamanian authorities revoked the registration of more than 200 vessels flying the Panamanian flag that had fallen under Western sanctions, including ships linked to Russian carriers. In Moscow, the decision was assessed negatively but interpreted primarily as a practical response to U.S. pressure rather than a sign of political realignment. Russia deliberately avoided retaliatory measures, reflecting a broader calculus shaped by post-2022 geopolitical constraints. The Kremlin deemed preserving functional channels of dialogue and limited economic interaction with Panama more advantageous than escalation, particularly given Moscow’s reduced set of viable partners and the continued utility of Panama as a neutral, albeit constrained, logistical and financial interlocutor (TASS, April 7, 2025).

In the context of Panama–Russia cooperation, Panama would not typically be classified—either doctrinally or in concrete policy implementation—as one of Russia’s core partners in Latin America. This category is traditionally reserved for Brazil, Venezuela, Nicaragua, and Cuba (Russian International Affairs Council, July 30, 2024). Panama’s unique geographic position—which makes it a prominent international logistics hub—and its developed financial and legal sectors give bilateral relations particular significance. This became evident well before 2022—when Russia faced its first international sanctions after its illegal annexation of Crimea—as Moscow began to view Panama as a pragmatic instrument for adapting to the sanctions regime (Russian International Affairs Council, June 24, 2024). The role of Panama for Russia could be defined as a “functional partner” enabling the maintenance of a presence at key nodes of global trade without open confrontation with the West.

Prior to the outbreak of Russia’s full-scale invasion of Ukraine in 2022 and the subsequent imposition of progressively harsh economic sanctions, Russia actively relied on the Panamanian flag—one of the world’s most well-known “flags of convenience”—for registering commercial vessels (RIA Novosti, March 4, 2022; Vizit-nvk.ru, accessed January 22). This practice ensured reduced regulatory costs, simplified access to international insurance, and a neutral legal status for vessels.

Panama has remained relevant for Russia despite post-2022 sanctions sharply limiting these opportunities. Moscow has interpreted Panamanian compliance measures as the result of U.S. pressure rather than ideological hostility (Gazeta.ru, February 3, 2025). The presumed volume of Russian-Panamanian bilateral trade is extremely modest, and Russian sources note the sporadic and very limited nature of trade relations. A relationship with Panama, however, is still advantageous for Russia in numerous ways (RIA Novosti, March 2, 2025). It acts as a transit platform for accessing Central American markets; a financial intermediary experienced in operating under strict compliance regimes; a jurisdiction for small and medium-sized businesses oriented toward international settlements; a means to test alternative maritime logistics schemes; a tool to accelerate the transition to flags of “friendly” jurisdictions; and a valuable case to accumulate experience in interacting with neutral maritime administrations.

Russia has benefited from its partnership with Panama both financially and legally. Even though Panama has tightened oversight of financial operations, it has not fully joined anti-Russian sanctions. This leaves Russian companies with limited but important opportunities, including consulting and legal services, arbitration mechanisms, and the registration of corporate structures not directly subject to restrictions.

Russian experts and policymakers have assessed potential avenues for expanding cooperation with Panama to advance Russia’s business interests across Latin America. One analytical study by Valentine Myagkov in the Russian Foreign Economic Journal on Panama’s special economic zones characterizes the country as “a promising platform for Russian organizations and companies operating in the complex Latin American markets.” Myagkov highlights, in particular, the potential of Panama’s free economic zones—19 of which were in operation as of 2024—as instruments for regional economic engagement. Panama’s free economic zones are known for well-developed commercial and logistics infrastructure, including modern port and warehouse facilities, branches of major banks and insurance companies, utility services, a wide range of business service providers, and advanced telecommunications operators. The study refers to these zones as a potential leading “outpost” for Russian exporters in Latin America. Particular interests among Russian subject experts include the Colón Free Zone (Zona Libre de Colón), the first free economic zone established in Panama in 1948. The zone is in the port city of Colón on the Atlantic coast at the entrance to the Panama Canal. It is currently the largest free-trade zone in the Western Hemisphere in terms of trade volume (averaging over $10 billion annually) and the second-largest duty-free port in the world after Hong Kong (Myagkov, “Свободные (специальные) экономические зоны Панамы,” December 16, 2024).

Russia also benefits from Panama in a humanitarian and “soft power” dimension. Russia used so-called “vaccine diplomacy”—the registration of the Sputnik V vaccine in Panama—which strengthened Russia’s image as a provider of public goods (Sputnik V; RFI, April 1, 2021). Russia also relies on educational and academic ties, which, according to Panamanian diplomats, contribute to long-term human capital formation (RIA Novosti, March 2, 2025). For instance, according to Lisa Pinzón, the chair of the National College of Career Diplomats, “Educational diplomacy and academic exchange also play an important role [in bilateral relations]. Many of our colleagues studied international relations in Russia … In addition, sports diplomacy should not be overlooked, as Russia has significant achievements in this field” (RIA Novosti, March 2, 2025).

Panamanian media generally assess relations with Russia through the lens of pragmatism, caution, and foreign-policy constraints stemming from Panama’s close ties with the United States. The country’s leading media and information outlets consistently emphasize that Russia is not a strategic partner for Panama but should still be regarded as a significant partner, particularly in discussions on the neutrality of the Panama Canal and multilateral diplomacy. Several publications note that Moscow consistently declares its support for the sovereignty and neutral status of the canal, which Panamanian experts perceive as a positive factor (La Estrella de Panamá, October 7, 2025). In 2025, Panama and Russia established an interparliamentary friendship group (Parliament of Panama, October 28, 2025). At the same time, Panamanian media often reflect the authorities’ wariness regarding deeper political engagement with Russia. For instance, the Central American Parliament’s decision to grant Russia permanent observer status prompted criticism from Panama’s Foreign Ministry, which was interpreted as an effort to avoid complications with Western partners (Prensa Libre, September 30, 2024). The prevailing media narrative suggests that relations with Russia are acceptable in the economic and humanitarian spheres but should remain limited and not undermine the country’s foreign policy balance (Prensa Latina, June 10, 2025).

Panama’s high degree of dependence on the United States constrains its capacity for independent foreign-policy decision-making. Moreover, given the recent U.S. focus on the Western Hemisphere, this may become even more pronounced. At the same time, Panama has not fully joined anti-Russian sanctions, which Russian sources regard as a basis for maintaining dialogue and expanding trade and economic ties (Marchukov, “Публичная дипломатия России в Латинской Америке в условиях геополитической напряженности: ключевые акторы, возможности и препятствия,” 2025).