Much has been made about Colombian President Juan Manuel Santos’ success at mending relations with his neighbors to the east and south. Rightly so. Given the difficult situation he inherited from his predecessor, this is no small feat.

But Santos’ newest diplomatic test may now come from the north.

On Jan. 3, Panamanian Foreign Minister Roberto Henriquez announced that Panamanian authorities will decide by the end of January whether the country will extradite Maria del Pilar Hurtado, the disgraced former head of Colombia’s now defunct Department of Administrative Security (DAS). Hurtado is wanted in Colombia for her role in the ‘Chuzadas’ (wire tap) scandal during the Uribe administration, in which, among other transgressions, the former Colombian president is accused of using DAS to spy on the communications of his adversaries.

Panamanian authorities granted asylum to Hurtado in November 2010. After more than a year of legal wrangling with international organizations and requests to turn Hurtado over to Colombian authorities, Colombia issued a formal request for Hurtado’s extradition in Dec. 2011 to stand trial for her role in the scandal, which shook the country’s confidence in the DAS and ultimately led to its downfall.

Colombia has been fighting for more than a year to return Hurtado to its post 1903-territory. Should Panama ultimately reject this latest request and allow Hurtado to continue living in asylum in Panama, diplomatic relations between the two countries could worsen. Should this happen, ties between the two countries will likely not reach the same low points as they did with Venezuela and Ecuador, when troops were sent to shore up borders and conflict rhetoric dominated headlines. The extent of any damage to bi-lateral ties hinges on Panama’s decision.