【Wen/Observer Net Liu Bai】The "port takeover storm" by the Panamanian government is escalating. According to Reuters on February 27, Hong Kong's CKH (China Merchants Group) subsidiary Panama Ports Company (PPC) stated on that day that its local office was raided by the Panamanian government on the 26th, and the Panamanian actions clearly violated the rule of law principles.

In a statement released on the 27th, PPC pointed out that the Panamanian government "disregards the principle of the rule of law, as evidenced by the latest action taken by national authorities invading and occupying PPC assets yesterday," and the company and investors will retain all legal rights related to this matter.

The statement emphasized that the company has repeatedly opposed the Panamanian side's illegal takeover of the port and seizure of company assets, including confidential and legally protected information.

According to PPC's account, the Panamanian side ignored the requirements to protect corporate sensitive data and suddenly entered a private storage location without prior notice on the 26th, taking materials related to ongoing legal cases, which indicates that "the state has undermined due process during the takeover."

"In the past year, especially in the past week, the actions of the Republic of Panama have shown that foreign investors cannot rely on Panama's legal or contractual framework," the statement read.

Image of the Panamanian government raiding PPC's office on February 26. Reuters photo

A source confirmed the operation to Reuters. The source said that the raid on PPC had nothing to do with the Panamanian government's decision to revoke the long-term operating rights of the CKH ports.

Panamanian media also reported on the incident. TVN footage showed about a dozen people wearing vests with the abbreviation "DIJ" for Panama's Investigative Police, appearing in a parking garage in Albrook, an upscale residential area in Panama City, with some individuals loading boxes into the back of a police car, but the exact location could not be identified.

On the 26th, the Panamanian government issued a statement asserting that this was an independent investigation conducted by the public prosecution service exercising its statutory powers. The statement did not name any specific company.

Previously, the Panama Ports Company had held the operating contracts for two ports in the Panama Canal. After CKH announced in March last year its intention to sell its global port business, including these two ports, the competition between China and the U.S. over global trade strategic hubs intensified, with President Trump exerting extreme pressure on Panama to curb China's influence over the Panama Canal.

In early January this year, the Panama Supreme Court declared invalid the contract authorizing CKH's Panama Ports Company to operate the Panama port terminals, citing "unconstitutional" reasons. CKH strongly opposed this, stating it would take all appropriate and feasible legal measures to safeguard the group's interests.

The ruling took effect on February 23. On that day, the Panamanian government forcibly entered the container terminals operated by the Panama Ports Company at Balboa and Cristobal ports, taking administrative and operational control of the two container terminals, while prohibiting representatives of the Panama Ports Company from entering these two container terminals.

On February 24, the Hong Kong Special Administrative Region government issued a press release condemning the Panamanian government's forced takeover of the two ports.

Before the search on the 26th, Panamanian President Molino claimed he did not know what actions the Chinese government would take after CKH lost its port operating rights, but if any situation arose, Panama would respond accordingly.

He said, "If I were to give my personal opinion, I think nothing will happen... What has Panama gained from its relationship with China? Of course, China is an extremely important country in the world."

Molino also said that Panama had experienced much more difficult times before, "so, we'll see then."

At a regular press conference on the 27th, China's Foreign Ministry spokesperson Mao Ning emphasized that China's position on the port issue in Panama is clear, and it will resolutely safeguard the legitimate and proper rights and interests of enterprises.

A source told Bloomberg in early February that China is taking a series of countermeasures against the relevant ruling in Panama, having asked state-owned enterprises to suspend negotiations with Panama on new projects, and simultaneously assessing further measures in trade and shipping sectors. This move may block potential investments worth billions of dollars.

Professor Wang Jiangyu, director of the Center for Chinese and Comparative Law at the Faculty of Law, Hong Kong City University, previously told Observer Net that merely condemning Panama morally and accusing it of unconstitutional rulings and violating judicial independence is not enough. The key lies in whether China has clear, strong, and effective counter-reprisal measures.

Wang Jiangyu emphasized that the Panama port incident has become a clear negative precedent, and similar events targeting Chinese overseas interests are likely to follow, so China must take serious countermeasures.

"It must hit hard, hurt it, even if it can't 'kill it with one strike,' the measures that should be taken must be implemented." He reiterated that China must strive to push forward countermeasures, which is an unavoidable choice.

William Yang, senior analyst at the International Crisis Group, mentioned that China could consider "multiple countermeasures," including isolating Panama by uniting its neighboring countries, and providing comprehensive legal and political support for the international arbitration of CKH.

"China could also consider imposing targeted sanctions on specific individuals or institutions in Panama, or using its deep trade and economic ties with Panama to exert pressure on it."

This article is exclusive to Observer Net and may not be reprinted without permission.

Original: toutiao.com/article/7611757765106631183/

Statement: This article represents the views of the author.