CUSTOMS DUTIES: PALAU TO PANAMA

Overview of Customs Duties from Palau to Panama

Exporting goods from Palau to Panama involves understanding Panama's customs regulations, duty rates, and import requirements. Panama maintains one of the lowest average tariff rates in the region at 12%, with a commitment to trade liberalization following its World Trade Organization (WTO) membership in 1997. The country has implemented a streamlined import process with favorable conditions for cross-border commerce, making it an accessible market for exporters from Pacific nations like Palau.

Panama's customs framework is characterized by a relatively high de minimis threshold of 100 USD/100 PAB and moderate import taxes and duties applied to the Cost, Insurance, and Freight (CIF) value of shipments. Understanding these requirements is essential for accurate landed cost calculations and successful customs clearance.

General Duty Rates

Import Category	Rate	Calculation Basis	Notes
Standard Import Duty Rate	12% (Average)	CIF Value	Applies to most goods from non-trade agreement countries
Import VAT (Value-Added Tax)	7%	CIF Value	Applied when FOB value exceeds de minimis threshold
De Minimis Threshold	100 USD / 100 PAB	FOB Value	Imports below this value are duty and tax-free
Product-Specific Rates	Varies by HS code	CIF Value	Contact customs experts for specific product classifications
Agricultural Products	Varies by HS code	CIF Value	Maximum tariff rate does not exceed 15%

Required Documentation

• Bill of Lading or Air Waybill: Always required for shipment identification and tracking
• Commercial Invoice: Essential document detailing goods description, quantity, unit price, and total value
• Commercial or Industrial License: Required if the importer engages in commercial or industrial activities in Panama
• Phytosanitary Permits: Mandatory for non-food agricultural products
• Special Import Permits: Required for firearms, ammunition, and fertilizers
• Packing List: Recommended to accompany shipments for customs verification
• Certificate of Origin: May be required depending on trade agreement eligibility

Important Regulations

De Minimis and Tax Exemptions: Shipments with a FOB value of 100 USD or less are exempt from both duties and taxes. This threshold applies to the value of goods only, not including freight and insurance costs when calculating FOB values.

Valuation Methods: Panama uses the CIF (Cost, Insurance, Freight) method for calculating most import duties and taxes. The CIF value includes the product price, shipping costs, and insurance. The FOB (Free on Board) valuation is used only for determining de minimis threshold eligibility.

Prohibited and Restricted Items: Many government agencies regulate imports into Panama. Certain items are completely prohibited, while others are restricted and require special authorization or licenses. Importers should verify specific product restrictions before shipment.

Ease of Import: Panama offers favorable conditions for importers, with an A-grade ease of importing score. Businesses can import goods without registering their business, and major international shipping carriers provide accessible services to Panamanian ports.

Trade Agreements

WTO Membership: Panama is a member of the World Trade Organization, requiring compliance with the Most-Favored-Nation (MFN) clause. This ensures that tariff concessions granted to one WTO member are extended to all other members.

Panama-United States Trade Promotion Agreement (TPA): Effective since October 2012, the TPA reduces import duties to zero for 87% of products in the tariff schedule. While this agreement primarily benefits U.S. exporters, it establishes Panama's commitment to competitive tariff rates. Products from other countries, including Palau, are subject to standard duty rates unless covered under other bilateral or multilateral agreements.

Multiple Trade Agreements: Panama maintains at least 19 trade agreements offering zero or highly discounted duty rates for goods manufactured in participating countries. Exporters from Palau should verify whether any preferential agreements apply to their specific products.

Contact Information: For specific tariff classifications and trade agreement eligibility, contact Panama's Ministry of Foreign Affairs or Panama Customs authority directly. Major courier services including DHL Express, FedEx, UPS, and USPS offer reliable shipping options with tracking and insurance services.