Panama

Feb. 24 (UPI) — Panama authorities have taken control of two ports operated by a subsidiary of a Hong Kong company, assets that came under scrutiny after President Donald Trump claimed China exerted too much influence over their operation.

Hong Kong-based conglomerate CK Hutchison Holdings condemned the Monday takeover in a statement on Tuesday that said the actions of Panama were “unlawful” and raised risks to the operations, health and safety of the Balboa and Critobal terminals that its subsidiary, Panama Ports, has been operating for decades.

“None of the actions by the Panama State were advised to or coordinate with PPC,” Hutchison Holdings said.

“The Panama State is responsible for harm and damage caused by the confiscatory actions it has taken.”

On Monday morning, Panama’s official gazette published a late-January Supreme Court ruling that made final the court’s decision that the contract law granting Panama Ports Company’s concession extension to operate the ports was unconstitutional.

The ruling came in a pair of lawsuits filed challenging the contract, which was issued by the Maritime Authority of Panama on June 23, 2021. According to a statement from the Panama presidency’s office, the contract was found unconstitutional because it gave a foreign-based company broad rights that limited the state’s control over the use and management of its resources.

After the gazette was published, Panama authorities arrived at the two ports and informed representatives of the Panama Ports Company that it must cease operations, and that those who do not comply with their orders will be prosecuted.

“PPC and CKHH will continue to consult with their legal advisors regarding the ruling and forceful takeover, the purported termination of PPC’s concession and all available recourse, including additional national and international legal proceedings against the Republic of Panama and its agents and third parties colluding with them,” CK Hutchison Holdings said.

The two ports and their Hong Kong connection were thrust into the spotlight on the first day of Trump’s second presidency, when in his inaugural address he said the United States has been “treated very badly” by Panama and that “China is operating the Panama Canal.”

Trump has repeatedly made the claim since, drawing attention to the Hong Kong-based conglomerate that has operated the two ports since 1997.

CK Hutchison says the Panamanian government has taken ‘administrative and operational control’ of its two ports on the canal.

The government of Panama has seized control of two ports on either end of the Panama Canal from a Hong Kong conglomerate following a recent ruling by the country’s Supreme Court.

Hong Kong’s CK Hutchison said on Tuesday that Panama’s government had “made direct physical entry into the terminals at Balboa and Cristobal” and assumed “administrative and operational control” over the two ports on the Panama Canal.

The company said the “unlawful” takeover reflects the culmination of a campaign by the Panamanian state against its subsidiary, Panama Ports, following the Supreme Court ruling last month.

According to a government decree, the Panama Maritime Authority has been authorised to occupy the ports for “reasons of urgent social interest”, according to The Associated Press (AP) news agency.

The maritime authority also has the right to take over port property, including computer systems and cranes, according to the decree.

The state takeover marks the latest twist in a yearlong saga for CK Hutchison, which has been caught in a three-way fight between China, the United States, and Panama following US President Donald Trump’s return to the White House last year.

Starting in December 2024, Trump began to allege that the Panama Canal was being operated by China and promised to “take it back” – using military force if necessary – as part of a greater effort to reassert US dominance over the Western Hemisphere.

Last month, Panama’s Supreme Court ruled that CK Hutchison’s concession to operate the two ports was “unconstitutional” despite the company renewing its concession in 2021 for another 25 years.

The Chinese government’s Hong Kong and Macao Affairs Office (HKMAO) weighed in on the controversy, describing the ruling as “absurd” and “shameful”, while warning that the Latin American country would pay “heavy prices both politically and economically”.

Panama’s President Jose Raul Mulino responded, saying he “strongly” rejected China’s threat against his country and that Panama was a country that upholds the rule of law “and respects the decisions of the judiciary, which is independent of the central government”.