Does flying to Panama from the US reset the ESTA time counter?

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According to the rules set forth under the VWP, you're allowed 90 days in the US, and visiting adjacent countries doesn't reset it. The VWP zone includes the US, Canada, Mexico and adjacent islands.

Fortunately for you, Panama is NOT part of the VWP zone, and therefore you're fully entitled to visit Panama, have your VWP time period reset, and later return to the US. However, you are still subject to any questions the CBP may have, and returning to the US sometimes results in a few extra questions. If your itinerary is all prepared and you can show your plans, however, you'll be fine (I've done this too - although not to Panama, I went to Cuba).

See a similar question on the Bahamas.

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