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Panama
Canal Treaty of 1977
President Jimmy Carter and Panamanian Chief of Government
Omar Torrijos signed the Panama Canal Treaty and Neutrality
Treaty on September 7, 1977. This agreement relinquishes American
control over the canal by the year 2000 and guarantees its
neutrality. On May 4, 1904, Panama granted the United States
the right to build and operate the canal and control the five
miles of land on either side of the water passage in exchange
for annual payments. For the history of the Panama Canal,
visit the Library of Congress† American Memory section.
Appendix B: Texts of the Panama Canal Treaties with United
States Senate
Modifications -- Panama
The United States of America and the Republic of Panama,
Acting in the spirit of the Joint Declaration of April 3,
1964, by the Representatives of the Governments of the United
States of America and the Republic of Panama, and of
the Joint Statement of Principles of February 7, 1974, initialed
by the Secretary of State of the United States of America
and the Foreign Minister of the Republic of Panama, and Acknowledging
the Republic of Panama's sovereignty
over its territory, Have decided to terminate the prior Treaties
pertaining to the Panama Canal and to conclude a new Treaty
to serve as the basis for a new relationship between them
and, accordingly, have agreed upon the following:
Article I
Abrogation of Prior Treaties and Establishment of a New Relationship
1. Upon its entry into force, this Treaty terminates and
supersedes:
(a) The Isthmian Canal Convention between the United States
of America and the Republic of Panama, signed at Washington,
November 18, 1903;
(b) The Treaty of Friendship and Cooperation signed at Washington,
March 2, 1936, and the Treaty of Mutual Understanding and
Cooperation and the related Memorandum of Understandings Reached,
signed at Panama, January 25, 1955, between the United States
of America and the Republic of Panama;
(c) All other treaties, conventions, agreements, and exchanges
of notes between the United States of America and the Republic
of Panama concerning the Panama Canal, which were in force
prior to the entry into force of this Treaty; and
(d) Provisions concerning the Panama Canal, which appear
in other treaties, conventions, agreements, and exchanges
of notes between the United States of America and the Republic
of Panama, which were in force prior to the entry into
force of this Treaty.
2. In accordance with the terms of this Treaty and related
agreements, the Republic of Panama, as territorial sovereign,
grants to the United States of America, for the duration of
this Treaty, the rights necessary to regulate the
transit of ships through the Panama Canal, and to manage,
operate, maintain, improve, protect and defend the Canal.
The Republic of Panama guarantees to the United States of
America the peaceful use of the land and water areas which
it has been granted the rights to use for such purposes pursuant
to this Treaty and related agreements.
3. The Republic of Panama shall participate increasingly
in the management and protection and defense of the Canal,
as provided in this Treaty.
4. In view of the special relationship established by this
Treaty, the United States of America and the Republic of Panama
shall cooperate to assure the uninterrupted and efficient
operation of the Panama Canal.
Article II
Ratification, Entry Into Force, and Termination
1. The Treaty shall be subject to ratification in accordance
with the constitutional procedures of the two Parties. The
instruments of ratification of this Treaty shall be exchanged
at Panama at the same time as the instruments of
ratification of the Treaty Concerning the Permanent Neutrality
and Operation of the Panama Canal, signed this date, are exchanged.
This Treaty shall enter into force, simultaneously with the
Treaty Concerning the Permanent Neutrality and Operation of
the Panama Canal, six calendar months from the date of the
exchange of the instruments of ratification.
2. This Treaty shall terminate at noon, Panama time, December
31, 1999.
Article III
Canal Operation and Management
1. The Republic of Panama, as territorial sovereign, grants
to the United States of America the rights to manage, operate,
and maintain the Panama Canal, its complementary works, installations,
and equipment and to provide for the orderly transit of vessels
through the Panama Canal. The United States of America accepts
the grant of such rights and undertakes to exercise them in
accordance with this Treaty and related agreements.
2. In carrying out the foregoing responsibilities, the United
States of America
may:
(a) Use for the aforementioned purposes, without cost except
as provided in this Treaty, the various installations and
areas (including the Panama Canal) and waters, described in
the Agreement in Implementation of this Article, signed
this date, as well as such other areas and installations as
are made available to the United States of America under this
Treaty and related agreements, and take the measures necessary
to ensure sanitation of such areas;
(b) Make such improvements and alterations to the aforesaid
installations and areas as it deems appropriate, consistent
with the terms of this Treaty;
(c) Make and enforce all rules pertaining the passage of
vessels through the Canal and other rules with respect to
navigation and maritime matters, in accordance with this Treaty
and related agreements. The Republic of Panama will
lend its cooperation, when necessary, in the enforcement of
such rules;
(d) Establish, modify, collect and retain tolls for the use
of the Panama Canal, and other charges, and establish and
modify methods of their assessment;
(e) Regulate relations with employees of the United States
Government;
(f) Provide supporting services to facilitate the performance
of its responsibilities under this Article;
(g) Issue and enforce regulations for the exercise of the
rights and responsibilities of the United States of America
under this Treaty and related agreements. The Republic of
Panama will lend its cooperation, when necessary, in
the enforcement of such rules; and
(h) Exercise any other right granted under this Treaty, or
otherwise agreed upon between the two Parties.
3. Pursuant to the foregoing grant of rights, the United
States of America shall, in accordance with the terms of this
Treaty and the provisions of United States law, carry out
its responsibilities by means of a United States
Government agency called the Panama Canal Commission, which
shall be constituted by and in conformity with the laws of
the United States of America.
(a) The Panama Canal Commission shall be supervised by a
Board composed of nine members, five of whom shall be nationals
of the United States of America, and four of whom shall be
Panamanian nationals proposed by the Republic of Panama for
appointment to such positions by the United States of America
in a timely manner.
(b) Should the Republic of Panama request the United States
of America to remove a Panamanian national from membership
on the Board, the United States of America shall agree to
such request. In that event, the Republic of Panama shall
propose another Panamanian national for appointment by the
United States of America to
such position in a timely manner. In case of removal of a
Panamanian member of the Board on the initiative of the United
States of America, both Parties will consult in advance in
order to reach agreement concerning such removal, and the
Republic of Panama shall propose another Panamanian national
for appointment by the United States of America in his stead.
(c) The United States of America shall employ a national
of the United States of America as Administrator of the Panama
Canal Commission, and a Panamanian national as Deputy Administrator,
through December 31, 1989. Beginning January 1, 1990, a Panamanian
national shall be employed as the Administrator and a national
of the United States of America shall occupy the position
of Deputy Administrator. Such Panamanian nationals shall be
proposed to the United States of America by the Republic of
Panama for appointment to such positions by the
United States of America.
(d) Should the United States of America remove the Panamanian
national from his position as Deputy Administrator, or Administrator,
the Republic of Panama shall propose another Panamanian national
for appointment to such position by the United States of America.
4. An illustrative description of the activities the Panama
Canal Commission will perform in carrying out the responsibilities
and rights of the United States of America under this Article
is set forth at the Annex. Also set forth
in the Annex are procedures for the discontinuance or transfer
of those activities performed prior to the entry into force
of this Treaty by the Panama Canal Company or the Canal Zone
Government which are not to be carried out by
the Panama Canal Commission.
5. The Panama Canal Commission shall reimburse the Republic
of Panama for the costs incurred by the Republic of Panama
in providing the following public services in the Canal operation
areas and in housing areas set forth in the
Agreement in Implementation of Article III of this Treaty
and occupied by both United States and Panamanian citizen
employees of the Panama Canal Commission: police, fire protection,
street maintenance, street lighting, street cleaning, traffic
management and garbage collection. The Panama Canal Commission
shall pay the Republic of Panama the sum of ten million United
States dollars (US$10,000,000) per annum for the foregoing
services. It is agreed that every three years from the date
that this Treaty enters into force, the costs involved in
furnishing said services shall be reexamined to determine
whether adjustment of the annual payment should be made because
of inflation and other relevant factors affecting the cost
of such services.
6. The Republic of Panama shall be responsible for providing,
in all areas comprising the former Canal Zone, services of
a general jurisdictional nature such as customs and immigration,
postal services, courts and licensing, in
accordance with this Treaty and related agreements.
7. The United States of America and the Republic of Panama
shall establish a Panama Canal Consultative Committee, composed
of an equal number of high-level representatives of the United
States of America and the Republic of Panama, and which may
appoint such subcommittees as it may deem appropriate. This
Committee shall advise the United States of America and the
Republic of Panama on matters of policy affecting the Canal's
operation. In view of both Parties' special interest in the
continuity and efficiency of the Canal operation in the future,
the Committee shall advise on matters such as general tolls
policy, employment and training policies to increase the participation
of Panamanian nationals in the operation of the Canal, and
international policies on matters concerning the Canal. The
Committee's recommendations shall be transmitted to the two
Governments, which shall give such recommendations full consideration
in the formulation of such policy decisions.
8. In addition to the participation of Panamanian nationals
at high management levels of the Panama Canal Commission,
as provided for in paragraph 3 of this Article, there shall
be growing participation of Panamanian nationals at all other
levels and areas of employment in the aforesaid commission,
with the objective of preparing, in an orderly and efficient
fashion, for the assumption by the Republic of Panama of full
responsibility for the management, operation and maintenance
of the Canal upon the termination of this Treaty.
9. The use of the areas, waters and installations with respect
to which the United States of America is granted rights pursuant
to this Article, and the rights and legal status of United
States Government agencies and employees
operating in the Republic of Panama pursuant to this Article,
shall be governed by Agreement in Implementation of this Article,
signed this date.
10. Upon entry into force of this Treaty, the United States
Government agencies known as the Panama Canal Company and
the Canal Zone Government shall cease to operate within the
territory of the Republic of Panama that formerly constituted
the Canal Zone.
Article IV
Protection and Defense
1. The United States of America and the Republic of Panama
commit themselves to protect and defend the Panama Canal.
Each Party shall act, in accordance with its constitutional
processes, to meet the danger resulting from an armed attack
or other actions which threaten the security of the Panama
Canal or of ships transiting it.
2. For the duration of this Treaty, the United States of
America shall have primary responsibility to protect and defend
the Canal. The rights of the United States of America to station,
train, and move military forces within the Republic of Panama
are described in the Agreement in Implementation of this Article,
signed this date. The use of areas and installations and the
legal status of the armed forces of the United States of America
in the Republic of Panama shall be governed by the aforesaid
Agreement.
3. In order to facilitate the participation and cooperation
of the armed forces of both Parties in the protection and
defense of the Canal, the United States of America and the
Republic of Panama shall establish a Combined Board comprised
of an equal number of senior military representatives of each
Party. These representatives shall be charged by their respective
governments with consulting and cooperating on all matters
pertaining to the protection and defense of the Canal, and
with planning for actions to be taken in concert for that
purpose. Such combined protection and defense arrangements
shall not inhibit the identity or lines of authority of the
armed forces of the United States of America or the Republic
of Panama. The Combined Board shall provide for coordination
and cooperation concerning such matters as:
(a) The preparation of contingency plans for the protection
and defense of the Canal based upon the cooperative efforts
of the armed forces of both Parties;
(b) The planning and conduct of combined military exercises;
and
(c) The conduct of United States and Panamanian military
operations with respect to the protection and defense of
the Canal.
4. The Combined Board shall, at five-year intervals throughout
the duration of this Treaty, review the resources being made
available by the two Parties for the protection and defense
of the Canal. Also, the Combined Board shall make
appropriate recommendations to the two Governments respecting
projected requirements, the efficient utilization of available
resources of the two Parties, and other matters of mutual
interest with respect to the protection and
defense of the Canal.
5. To the extent possible consistent with its primary responsibility
for the protection and defense of the Panama Canal, the United
States of America will endeavor to maintain its armed forces
in the Republic of Panama in normal times at a level not in
excess of that of the armed forces of the United States of
America in the territory of the former Canal Zone immediately
prior to the entry into force of this Treaty.
Article V
Principle of Non-Intervention
Employees of the Panama Canal Commission, their dependents
and designated contractors of the Panama Canal Commission,
who are nationals of the United States of America, shall respect
the laws of the Republic of Panama and shall abstain from
any activity incompatible with the spirit of this Treaty.
Accordingly, they shall abstain from any political activity
in the Republic of Panama as well as from any intervention
in the internal affairs of the Republic
of Panama. The United States of America shall take all measures
within its authority to ensure that the provisions of this
Article are fulfilled.
Article VI
Protection of the Environment
1. The United States of America and the Republic of Panama
commit themselves to implement this Treaty in a manner consistent
with the protection of the natural environment of the Republic
of Panama. To this end, they shall consult and cooperate
with each other in all appropriate ways to ensure that they
shall give
due regard to the protection and conservation of the environment.
2. A Joint Commission on the Environment shall be established
with equal representation from the United States and the
Republic of Panama, which shall periodically review the
implementation of this Treaty and shall recommend as appropriate
to the two Governments ways to avoid or, should this not
be possible, to mitigate the adverse environmental impacts
which might result from their respective actions pursuant
to the Treaty.
3. The United States of America and the Republic of Panama
shall furnish the Joint Commission on the Environment complete
information on any action taken in accordance with this
Treaty which, in the judgment of both, might have a significant
effect on the environment. Such information shall be made
available to the Commission as far in advance of the contemplated
action as possible to facilitate the study by the Commission
of any potential environmental problems and to allow for
consideration of the recommendation of the Commission before
the contemplated action is carried out.
Article VII
Flags
1. The entire territory of the Republic of Panama, including
the areas the use of which the Republic of Panama makes
available to the United States of America pursuant to this
Treaty and related agreements, shall be under the flag of
the Republic of Panama, and consequently such flag always
shall occupy the position of honor.
2. The flag of the United States of America may be displayed,
together with the flag of the Republic of Panama, at the
headquarters of the Panama Canal Commission, at the site
of the Combined Board, and as provided in the Agreement
in Implementation of Article IV of this Treaty.
3. The flag of the United States of America also may be
displayed at other places and on some occasions, as agreed
by both Parties.
Article VIII
Privileges and Immunities
1. The installations owned or used by the agencies or instrumentalities
of the United States of America operating in the Republic
of Panama pursuant to this Treaty and related agreements,
and their official archives and documents, shall be inviolable.
The two Parties shall agree on procedures to be followed
in the conduct of any criminal investigation at such locations
by the Republic of Panama.
2. Agencies and instrumentalities of the Government of
the United States of America operating in the Republic of
Panama pursuant to this Treaty and related agreements shall
be immune from the jurisdiction of the Republic of Panama.
3. In addition to such other privileges and immunities
as are afforded to employees of the United States Government
and their dependents pursuant to this Treaty, the United
States of America may designate up to twenty officials of
the Panama Canal Commission who, along with their dependents,
shall enjoy the
privileges and immunities accorded to diplomatic agents
and their dependents under international law and practice.
The United States of America shall furnish to the Republic
of Panama a list of the names of said officials and their
dependents, identifying the positions they occupy in the
Government of the United States of America, and shall keep
such list current at all times.
Article IX
Applicable Laws and Law Enforcement
1. In accordance with the provisions of this Treaty and
related agreements, the law of the Republic of Panama shall
apply in the areas made available for the use of the United
States of America pursuant to this Treaty. The law of the
Republic of Panama shall be applied to matters or events
which occurred in the
former Canal Zone prior to the entry into force of this
Treaty only to the extent specifically provided in prior
treaties and agreements.
2. Natural or juridical persons who, on the date of entry
into force of this Treaty, are engaged in business or non-profit
activities at locations in the former Canal Zone may continue
such business or activities at those locations under the
same terms and conditions prevailing prior to the entry
into force of this Treaty for a thirty-month transition
period from its entry into force. The Republic of Panama
shall maintain the same operating conditions as those applicable
to the aforementioned enterprises prior to the entry into
force of this Treaty in order that they may receive licenses
to do business in the Republic of Panama subject to their
compliance with the requirements of its law. Thereafter,
such persons shall receive the same treatment under the
law of the Republic of Panama as similar enterprises already
established in the rest of the territory of the Republic
of Panama without discrimination.
3. The rights of ownership, as recognized by the United
States of America, enjoyed by natural or juridical private
persons in buildings and other improvements to real property
located in the former Canal Zone shall be recognized by
the Republic of Panama in conformity with its laws.
4. With respect to buildings and other improvements to
real property located in the Canal operating areas, housing
areas or other areas subject to the licensing procedure
established in Article IV of the Agreement in Implementation
of Article III of this Treaty, the owners shall be authorized
to continue using the land upon which their property is
located in accordance with the procedures established in
that Article.
5. With respect to buildings and other improvements to
real property located in areas of the former Canal Zone
to which the aforesaid licensing procedure is not applicable,
or may cease to be applicable during the lifetime or upon
termination of this Treaty, the owners may continue to use
the land upon which their property is located, subject to
the payment of a reasonable charge to the Republic of Panama.
Should the Republic of Panama decide to sell such land,
the owners of the buildings or other improvements located
thereon shall be offered a first option to purchase such
land at a reasonable cost. In the case of nonprofit
enterprises, such as churches and fraternal organizations,
the cost of purchase will be nominal in accordance with
the prevailing practice in the rest of the territory of
the Republic of Panama.
6. If any of the aforementioned persons are required by
the Republic of Panama to discontinue their activities or
vacate their property for public purposes, they shall be
compensated at fair market value by the Republic of Panama.
7. The provisions of paragraphs 2-6 above shall apply to
natural or juridical persons who have been engaged in business
or non- profit activities at locations in the former Canal
Zone for at least six months prior to the date of signature
of this Treaty.
8. The Republic of Panama shall not issue, adopt or enforce
any law, decree, regulation, or international agreement
or take any other action which purports to regulate or would
otherwise interfere with the exercise on the part of the
United States of America of any right granted under this
Treaty or related
agreements.
9. Vessels transiting the Canal, and cargo, passengers
and crews carried on such vessels shall be exempt from any
taxes, fees, or other charges by the Republic of Panama.
However, in the event such vessels call at a Panamanian
port, they may be assessed charges thereto, such as charges
for services provided to the vessel. The Republic of Panama
may also require the passengers and crew disembarking from
such vessels to pay such taxes, fees and charges as are
established under Panamanian law for persons entering its
territory. Such taxes, fees and charges shall be assessed
on a nondiscriminatory basis.
10. The United States of America and the Republic of Panama
will cooperate in taking such steps as may from time to
time be necessary to guarantee the security of the Panama
Canal Commission, its property, its employees and their
dependents, and their property, the Forces of the United
States of America and
the members thereof, the civilian component of the United
States Forces, the dependents of members of the Forces and
civilian component, and their property, and the contractors
of the Panama Canal Commission and of the United States
Forces, their dependents, and their property. The Republic
of Panama will seek from its Legislative Branch such legislation
as may be needed to carry out the
foregoing purposes and to punish any offenders.
11. The Parties shall conclude an agreement whereby nationals
of either State, who are sentenced by the courts of the
other State, and who are not domiciled therein, may elect
to serve their sentences in their State of nationality.
Article X
Employment With the Panama Canal Commission
1. In exercising its rights and fulfilling its responsibilities
as the employer, the United States of America shall establish
employment and labor regulations which shall contain the
terms, conditions and prerequisites for all categories
of employees of the Panama Canal Commission. These regulations
shall be provided
to the Republic of Panama prior to their entry into force.
2. (a) The regulations shall establish a system of preference
when hiring
employees, for Panamanian applicants possessing the skills
and qualifications
required for employment by the Panama Canal Commission.
The United States of
America shall endeavor to ensure that the number of Panamanian
nationals
employed by the Panama Canal Commission in relation to the
total number of its
employees will conform to the proportion established for
foreign enterprises
under the law of the Republic of Panama.
(b) The terms and conditions of employment to be established
will in general be
no less favorable to persons already employed by the Panama
Canal Company or
Canal Zone Government prior to the entry into force of this
Treaty, than those
in effect immediately prior to that date.
3. (a) The United States of America shall establish an
employment policy for the
Panama Canal Commission that shall generally limit the recruitment
of personnel
outside the Republic of Panama to persons possessing requisite
skills and
qualifications which are not available in the Republic of
Panama.
(b) The United States of America will establish training
programs for Panamanian
employees and apprentices in order to increase the number
of Panamanian
nationals qualified to assume positions with the Panama
Canal Commission, as
positions become available.
(c) Within five years from the entry into force of this
Treaty, the number of
United States nationals employed by the Panama Canal Commission
who were
previously employed by the Panama Canal Company shall be
at least twenty percent
less than the total number of United States nationals working
for the Panama
Canal Company immediately prior to the entry into force
of this Treaty.
(d) The United States of America shall periodically inform
the Republic of
Panama, through the Coordinating Committee, established
pursuant to the
Agreement in Implementation of Article III of this Treaty,
of available
positions within the Panama Canal Commission. The Republic
of Panama shall
similarly provide the United States of America any information
it may have as to
the availability of Panamanian nationals claiming to have
skills and
qualifications that might be required by the Panama Canal
Commission, in order
that the United States of America may take this information
into account.
4. The United States of America will establish qualification
standards for
skills, training, and experience required by the Panama
Canal Commission. In
establishing such standards, to the extent they include
a requirement for a
professional license, the United States of America, without
prejudice to its
right to require additional professional skills and qualifications,
shall
recognize the professional licenses issued by the Republic
of Panama.
5. The United States of America shall establish a policy
for the periodic
rotation, at a maximum of every five years, of United States
citizen employees
and other non-Panamanian employees, hired after the entry
into force of this
Treaty. It is recognized that certain exceptions to the
said policy of rotation
may be made for sound administrative reasons, such as in
the case of employees
holding positions requiring certain non-transferable or
non- recruitable skills.
6. With regard to wages and fringe benefits, there shall
be no discrimination on
the basis of nationality, sex, or race. Payments by the
Panama Canal Commission
of additional remuneration, or the provision of other benefits,
such as home
leave benefits, to United States nationals employed prior
to entry into force of
this Treaty, or to persons of any nationality, including
Panamanian nationals
who are thereafter recruited outside of the Republic of
Panama and who change
their place of residence, shall not be considered to be
discrimination for the
purpose of this paragraph.
7. Persons employed by the Panama Canal Commission or Canal
Zone Government
prior to the entry into force of this Treaty, who are displaced
from their
employment as a result of the discontinuance by the United
States of America of
certain activities pursuant to this Treaty, will be placed
by the United States
of America, to the maximum extent feasible, in other appropriate
jobs with the
Government of the United States in accordance with United
States Civil Service
regulations. For such persons who are not United States
nationals, placement
efforts will be confined to United States Government activities
located within
the Republic of Panama. Likewise, persons previously employed
in activities for
which the Republic of Panama assumes responsibility as a
result of this Treaty
will be continued in their employment to the maximum extent
feasible by the
Republic of Panama. The Republic of Panama shall, to the
maximum extent
feasible, ensure that the terms and conditions of employment
applicable to
personnel employed in the activities for which it assumed
responsibility are not
less favorable than those in effect immediately prior to
the entry into force of
this Treaty. Non-United States nationals employed by the
Panama Canal Company or
Canal Zone Government prior to the entry into force of this
Treaty who are
involuntarily separated from their positions because of
the discontinuance of an
activity by reason of this Treaty, who are not entitled
to an immediate annuity
under the United States Civil Service Retirement System,
and for whom continued
employment in the Republic of Panama by the Government of
the United States of
America is not practicable, will be provided special job
placement assistance by
the Republic of Panama for employment in positions for which
they may be
qualified by experience and training.
8. The Parties agree to establish a system whereby the
Panama Canal Commission
may, if deemed mutually convenient or desirable by the two
Parties, assign
certain employees of the Panama Canal Commission, for a
limited period of time,
to assist in the operation of activities transferred to
the responsibility of
the Republic of Panama as a result of this Treaty or related
agreements. The
salaries and other costs of employment of any such persons
assigned to provide
such assistance shall be reimbursed to the United States
of America by the
Republic of Panama.
9. (a) The right of employees to negotiate collective contracts
with the Panama
Canal Commission is recognized. Labor relations with employees
of the Panama
Canal Commission shall be conducted in accordance with forms
of collective
bargaining established by the United States of America after
consultation with
employee unions. (b) Employee unions shall have the right
to affiliate with
international labor organizations.
10. The United States of America will provide an appropriate
early optional
retirement program for all persons employed by the Panama
Canal Company or Canal
Zone Government immediately prior to the entry into force
of this Treaty. In
this regard, taking into account the unique circumstances
created by the
provisions of this Treaty, including its duration, and their
effect upon such
employees, the United States of America shall, with respect
to them:
(a) determine that conditions exist which invoke applicable
United States law
permitting early retirement annuities and apply such law
for a substantial
period of the duration of the treaty; (b) seek special legislation
to provide
more liberal
entitlement to, and calculation of, retirement annuities
than is currently
provided for by law.
Article XI
Provisions for the Transition Period
1. The Republic of Panama shall reassume plenary jurisdiction
over the former
Canal Zone upon entry into force of this Treaty and in accordance
with its
terms. In order to provide for an orderly transition to the
full application of
the jurisdictional arrangements established by this Treaty
and related
agreements, the provisions of this Article shall become applicable
upon the date
this Treaty enters into force, and shall remain in effect
for thirty calendar
months. The authority granted in this Article to the United
States of America
for this transition period shall supplement, and is not intended
to limit, the
full application and effect of the rights and authority granted
to the United
States of America elsewhere in this Treaty and in related
agreements.
2. During this transition period, the criminal and civil
laws of the United
States of America shall apply concurrently with those of the
Republic of Panama
in certain of the areas and installations made available for
the use of the
United States of America pursuant to this Treaty, in accordance
with the
following provisions:
(a) The Republic Panama permits the authorities of the United
States of America
to have the primary right to exercise criminal jurisdiction
over United States
citizen employees of the Panama Canal Commission and their
dependents, and
members of the United States Forces and civilian component
and their dependents,
in the following cases:
(i) for any offense committed during the transition period
within such areas and
installations, and
(ii) for any offense committed prior to that period in the
former Canal Zone.
The Republic of Panama shall have the primary right to exercise
jurisdiction
over all other offenses committed by such persons, except
as otherwise agreed.
(b) Either Party may waive its primary right to exercise
jurisdiction in a
specific case or category of cases.
3. The United States of America shall retain the right to
exercise jurisdiction
in criminal cases relating to offenses committed prior to
the entry into force
of this Treaty in violation of the laws applicable in the
former Canal Zone.
4. For the transition period, the United States of America
shall retain police
authority and maintain a police force in the aforementioned
areas and
installations. In such areas, the police authorities of the
United States of
America may take into custody any person not subject to their
primary
jurisdiction if such person is believed to have committed
or to be committing an
offense against applicable laws or regulations, and shall
promptly transfer
custody to the police authorities of the Republic of Panama.
The United States
of America and the Republic of Panama shall establish joint
police patrols in
agreed areas. Any arrests conducted by a joint patrol shall
be the
responsibility of the patrol member or members representing
the Party having
primary jurisdiction over the person or persons arrested.
5. The courts of the United States of America and related
personnel, functioning
in the former Canal Zone immediately prior to the entry into
force of this
Treaty, may continue to function during the transition period
for the judicial
enforcement of the jurisdiction to be exercised by the United
States of America
in accordance with this Article.
6. In civil cases, the civilian courts of the United States
of America in the
Republic of Panama shall have no jurisdiction over new cases
of a private civil
nature, but shall retain full jurisdiction during the transition
period to
dispose of any civil cases, including admiralty cases, already
instituted and
pending before the courts prior to the entry into force of
this Treaty.
7. The laws, regulations, and administrative authority of
the United States of
America applicable in the former Canal Zone immediately prior
to the entry into
force of this Treaty shall, to the extent not inconsistent
with this Treaty and
related agreements, continue in force for the purpose of the
exercise by the
United States of America of law enforcement and judicial jurisdiction
only
during the transition period. The United States of America
may amend, repeal or
otherwise change such laws, regulations and administrative
authority. The two
Parties shall consult concerning procedural and substantive
matters relative to
the implementation of this Article, including the disposition
of cases pending
at the end of the transition period and, in this respect,
may enter into
appropriate agreements by an exchange of notes or other instrument.
8. During this transition period, the United States of America
may continue to
incarcerate individuals in the areas and installations made
available for the
use of the United States of America by the Republic of Panama
pursuant to this
Treaty and related agreements, or to transfer them to penal
facilities in the
United States of America to serve their sentences.
Article XII
A Sea-Level Canal or a Third Lane of Locks
1. The United States of America and the Republic of Panama
recognize that a sealevel
canal may be important for international navigation in the
future.
Consequently, during the duration of this Treaty, both Parties
commit themselves
to study jointly the feasibility of a sea-level canal in the
Republic of Panama,
and in the event they determine that such a waterway is necessary,
they shall
negotiate terms, agreeable to both Parties, for its construction.
2. The United States of America and the Republic of Panama
agree on the
following:
a) No new interoceanic canal shall be constructed in the
territory of the
Republic of Panama during the duration of this Treaty, except
in accordance with
the provisions of this Treaty, or as the two Parties may otherwise
agree; and
(b) During the duration of this Treaty, the United States
of America shall not
negotiate with third States for the right to construct an
interoceanic canal on
any other route in the Western Hemisphere, except as the two
Parties may
otherwise agree.
3. The Republic of Panama grants to the United States of
America the right to
add a third lane of locks to the existing Panama Canal. This
right may be
exercised at any time during the duration of this Treaty,
provided that the
United States of America has delivered to the Republic of
Panama copies of the
plans for such construction.
4. In the event the United States of America exercises the
right granted in
paragraph 3 above, it may use for that purpose, in addition
to the areas
otherwise made available to the United States of America pursuant
to this
Treaty, such other areas as the two Parties may agree upon.
The terms and
conditions applicable to Canal operating areas made available
by the Republic of
Panama for the use of the United States of America pursuant
to Article III of
this Treaty shall apply in a similar manner to such additional
areas.
5. In the construction of the aforesaid works, the United
States of America
shall not use nuclear excavation techniques without the previous
consent of the
Republic of Panama.
Article XIII
Property Transfer and Economic Participation by the Republic
of Panama
1. Upon termination of this Treaty, the Republic of Panama
shall assume total
responsibility for the management, operation, and maintenance
of the Panama
Canal, which shall be turned over in operating condition and
free of liens and
debts, except as the two Parties may otherwise agree.
2. The United States of America transfers, without charge,
to the Republic of
Panama all right, title and interest the United States of
America may have with
respect to all real property, including non-removable improvements
thereon, as
set forth below:
(a) Upon the entry into force of this Treaty, the Panama
Railroad and such
property that was located in the former Canal Zone but that
is not within the
land and water areas the use of which is made available to
the United States of
America pursuant to this Treaty. However, it is agreed that
the transfer on such
date shall not include buildings and other facilities, except
housing, the use
of which is retained by the United States of America pursuant
to this Treaty and
related agreements, outside such areas;
(b) Such property located in an area or a portion thereof
at such time as the
use by the United States of America of such area or portion
thereof ceases
pursuant to agreement between the two Parties.
(c) Housing units made available for occupancy by members
of the Armed Forces of
the Republic of Panama in accordance with paragraph 5(b) of
Annex B to the
Agreement in Implementation of Article IV of this Treaty at
such time as such
units are made available to the Republic of Panama.
(d) Upon termination of this Treaty, all real property and
non-removable
improvements that were used by the United States of America
for the purposes of
this Treaty and related agreements and equipment related to
the management,
operation and maintenance of the Canal remaining in the Republic
of Panama.
3. The Republic of Panama agrees to hold the United States
of America harmless
with respect to any claims which may be made by third parties
relating to
rights, title and interest in such property.
4. The Republic of Panama shall receive, in addition, from
the Panama Canal
Commission a just and equitable return on the national resources
which it has
dedicated to the efficient management, operation, maintenance,
protection and
defense of the Panama Canal, in accordance with the following:
(a) An annual amount to be paid out of Canal operating revenues
computed at a
rate of thirty hundredths of a United States dollar (US$0.30)
per Panama Canal
net ton, or its equivalency, for each vessel transiting the
Canal after the
entry into force of this Treaty, for which tolls are charged.
The rate of thirty
hundredths of a United States dollar (US$0.30) per Panama
Canal net ton, or its
equivalency, will be adjusted to reflect changes in the United
States wholesale
price index for total manufactured goods during biennial periods.
The first
adjustment shall take place five years after entry into force
of this Treaty,
taking into account the changes that occurred in such price
index during the
preceding two years. Thereafter, successive adjustments shall
take place at the
end of each biennial period. If the United States of America
should decide that
another indexing method is preferable, such method shall be
proposed to the
Republic of Panama and applied if mutually agreed.
(b) A fixed annuity of ten million United States dollars
(US$10,000,000) to be paid out of Canal operating revenues.
This amount shall
constitute a fixed expense of the Panama Canal Commission.
(c) An annual amount of up to ten million United States dollars
(US$10,000,000)
per year, to be paid out of Canal operating revenues to the
extent that such
revenues exceed expenditures of the Panama Canal Commission
including amounts
paid pursuant to this Treaty. In the event Canal operating
revenues in any year
do not produce a surplus sufficient to cover this payment,
the unpaid balance
shall be paid from operating surpluses in future years in
a manner to be
mutually agreed.
Article XIV
Settlement of Disputes
In the event that any question should arise between the Parties
concerning the
interpretation of this Treaty or related agreements, they
shall make every
effort to resolve the matter through consultation in the appropriate
committees
established pursuant to this Treaty and related agreements,
or, if appropriate,
through diplomatic channels. In the event the Parties are
unable to resolve a
particular matter through such means, they may, in appropriate
cases, agree to
submit the matter to conciliation, mediation, arbitration,
or such other
procedure for the peaceful settlement of the dispute as they
may mutually deem
appropriate. DONE at Washington, this 7th day of September,
1977 in duplicate,
in the English and Spanish languages, both texts being equally
authentic.
Annex
Procedures for the Cessation or Transfer of Activities Carried
Out by the Panama
Canal Company and the Canal Zone Government and Illustrative
List of the
Functions That May Be Performed by the Panama Canal Commission
1. The laws of the Republic of Panama shall regulate the
exercise of private
economic activities within the areas made available by the
Republic of Panama
for the use of the United States of America pursuant to this
Treaty. Natural or
juridical persons who, at least six months prior to the date
of signature of
this Treaty, were legally established and engaged in the exercise
of economic
activities in accordance with the provisions of paragraphs
2-7 of Article IX of
this Treaty.
2. The Panama Canal Commission shall not perform governmental
or commercial
functions as stipulated in paragraph 4 of this Annex, provided,
however, that
this shall not be deemed to limit in any way the right of
the United States of
America to perform those functions that may be necessary for
the efficient
management, operation and maintenance of the Canal.
3. It is understood that the Panama Canal Commission, in
the exercise of the
rights of the United States of America with respect to the
management, operation
and maintenance of the Canal, may perform functions such as
are set forth below
by way of illustration:
a. Management of the Canal enterprise.
b. Aids to navigation in Canal waters and in proximity thereto.
c. Control of vessel movement.
d. Operation and maintenance of the locks.
e. Tug service for the transit of vessels and dredging for
the piers and docks
of the Panama Canal Commission.
f. Control of the water levels in Gatun, Alajuela (Madden),
and Miraflores
Lakes.
g. Non-commercial transportation services in Canal waters.
h. Meteorological and
hydrographic services.
i. Admeasurement.
j. Non-commercial motor transport and maintenance.
k. Industrial security through the use of watchmen.
l. Procurement and warehousing.
m. Telecommunications.
n. Protection of the environment by preventing and controlling
the spillage of
oil and substances harmful to human or animal life and of
the ecological
equilibrium in areas used in operation of the Canal and the
anchorages.
o. Non-commercial vessel repair.
p. Air conditioning services in Canal installations.
q. Industrial sanitation and health services.
r. Engineering design, construction and maintenance of Panama
Canal Commission
installations.
s. Dredging of the Canal channel, terminal ports and adjacent
waters.
t. Control of the banks and stabilizing of the slopes of
the Canal.
u. Non-commercial handling of cargo on the piers and docks
of the Panama Canal
Commission.
v. Maintenance of public areas of the Panama Canal Commission,
such as parks and
gardens.
w. Generation of electric power.
x. Purification and supply of water.
y. Marine salvage in Canal waters.
z. Such other functions as may be necessary or appropriate
to carry out, in
conformity with this Treaty and related agreements, the rights
and
responsibilities of the United States of America with respect
to the management,
operation and maintenance of the Panama Canal.
4. The following activities and operations carried out by
the Panama Canal
Company and the Canal Zone Government shall not be carried
out by the Panama
Canal Commission, effective upon the dates indicated herein:
(a) Upon the date of entry into force of this Treaty: (i)
Wholesale and retail
sales, including those through commissaries, food stores,
department stores,
optical shops and pastry shops;
(ii) The production of food and drink, including milk products
and bakery
products;
(iii) The operation of public restaurants and cafeterias
and the sale of
articles through vending machines;
(iv) The operation of movie theaters, bowling alleys, pool
rooms and other
recreational and amusement facilities for the use of which
a charge is payable;
(v) The operation of laundry and dry cleaning plants other
than those operated
for official use;
(vi) The repair and service of privately owned automobiles
or the sale of
petroleum or lubricants thereto, including the operation of
gasoline stations,
repair garages and tire repair and recapping facilities, and
the repair and
service of other privately owned property, including appliances,
electronic
devices, boats, motors, and furniture;
(vii) The operation of cold storage and freezer plants other
than those operated
for official use;
(viii) The operation of freight houses other than those operated
for official
use;
(ix) The operation of commercial services to and supply of
privately owned and
operated vessels, including the constitution of vessels, the
sale of petroleum
and lubricants and the provision of water, tug services not
related to the Canal
or other United States Government operations, and repair of
such vessels, except
in situations where repairs may be necessary to remove disabled
vessels from the
Canal;
(x) Printing services other than for official use;
(xi) Maritime transportation for the use of the general public;
(xii) Health and medical services provided to individuals,
including hospitals,
leprosariums, veterinary, mortuary and cemetery services;
(xiii) Educational services not for professional training,
including schools and
libraries;
(xiv) Postal services;
(xv) Immigration, customs and quarantine controls, except
those measures
necessary to ensure the sanitation of the Canal;
(xvi) Commercial pier and dock services, such as the
handling of cargo and passengers; and
(xvii) Any other commercial activity of a similar nature,
not related to the
management, operation or maintenance of the Canal.
(b) Within thirty calendar months from the date of entry
into force of this
Treaty, governmental services such as:
(i) Police;
(ii) Courts; and
(iii) Prison system.
5. (a) With respect to those activities or functions described
in paragraph 4
above, or otherwise agreed upon by the two Parties, which
are to be assumed by
the Government of the Republic of Panama or by private persons
subject to its
authority, the two Parties shall consult prior to the discontinuance
of such
activities or functions by the Panama Canal Commission to
develop appropriate
arrangements for the orderly transfer and continued efficient
operation or
conduct thereof.
(b) In the event that appropriate arrangements cannot be
arrived at to ensure
the continued performance of a particular activity or function
described in
paragraph 4 above which is necessary to the efficient management,
operation or
maintenance of the Canal, the Panama Canal Commission may,
to the extent
consistent with the other provisions of this Treaty and related
agreements,
continue to perform such activity or function until such arrangements
can be
made.
United States Senate Modifications (Incorporated Into the
June 1978 Instruments
of Ratification)
(a) RESERVATIONS:
(1) Pursuant to its adherence to the principle of nonintervention,
any action
taken by the United States of America in the exercise of its
rights to assure
that the Panama Canal shall remain open, neutral, secure,
and accessible,
pursuant to the provisions of the Panama Canal Treaty, the
Treaty Concerning the
Permanent Neutrality and Operation of the Panama Canal, and
the resolutions of
ratification thereto, shall be only for the purpose of assuring
that the Canal
shall remain open, neutral, secure, and accessible, and shall
not have as its
purpose or be interpreted as a right of intervention in the
internal affairs of
the Republic of Panama or interference with its political
independence or
sovereign integrity.
(2) The instruments of ratification of the Panama Canal Treaty
to be exchanged
by the United States of America and the Republic of Panama
shall each include
provisions whereby each Party agrees to waive its rights and
release the other
Party from its obligations under paragraph 2 of Article XII
of the Treaty.
(3) Notwithstanding any provision of the Treaty, no funds
may be drawn from the
Treasury of the United States of America for payments under
paragraph 4 of
Article XIII without statutory authorization.
(4) Any accumulated unpaid balance under paragraph 4(c) of
Article XIII of the
Treaty at the date of termination of the Treaty shall be payable
only to the
extent of any operating surplus in the last year of the duration
of the Treaty,
and nothing in such paragraph may be constructed as obligating
the United States
of America to pay, after the date of the termination of the
Treaty, any such
unpaid balance which shall have accrued before such date.
(5) Exchange of the instruments of ratification of the Panama
Canal Treaty and
of the Treaty Concerning the Permanent Neutrality and Operation
of the Panama
Canal shall not be effective earlier than March 31, 1979,
and such Treaties
shall not enter into force prior to October 1, 1979, unless
legislation
necessary to implement the provisions of the Panama Canal
Treaty shall have been
enacted by the Congress of the United States of America before
March 31, 1979.
(6) After the date of entry into force of the Treaty, the
Panama Canal
Commission shall, unless otherwise provided by legislation
enacted by the
Congress of the United States of America, be obligated to
reimburse the Treasury
of the United States of America, as nearly as possible, for
the interest cost of
the funds or other assets directly invested in the Commission
by the Government
of the United States of America and for the interest cost
of the funds or other
assets directly invested in the predecessor Panama Canal Company
by the
Government of the United States of America and not reimbursed
before the date of
entry into force of the Treaty. Such reimbursement for such
interest costs shall
be made at a rate determined by the Secretary of the Treasury
of the United
States of America and at annual intervals to the extent earned,
and if not
earned, shall be made from subsequent earnings. For purposes
of this
reservation, the phrase "funds or other assets directly
invested" shall have the
same meaning as the phrase "net direct investment"
has under section 62 of title
2 of the Canal Zone Code.
(b) UNDERSTANDINGS:
(1) Before the first day of the three-year period beginning
on the date of entry
into force of the Treaty and before each three-year period
following thereafter,
the two Parties shall agree upon the specific levels and quality
of services, as
are referred to in paragraph 5 of Article III of the Treaty,
to be provided
during the following three-year period and, except for the
first three-year
period, on the reimbursement to be made for the costs of such
services, such
services to be limited to such as are essential to the effective
functioning of
the Canal operating areas and the housing areas referred to
in paragraph 5 of
Article III. If payments made under paragraph 5 of Article
III for the preceding
three-year period, including the initial three-year period,
exceed or are less
than the actual costs to the Republic of Panama for supplying,
during such
period, the specific levels and quality of services agreed
upon, then the Panama
Canal Commission shall deduct from or add to the payment required
to be made to
the Republic of Panama for each of the following three years
one-third of such
excess or deficit, as the case may be. There shall be an independent
and binding
audit, conducted by an auditor mutually selected by both Parties,
of any costs
of services disputed by the two Parties pursuant to the reexamination
of such
costs provided for in this understanding.
(2) Nothing in paragraph 3, 4, or 5 of Article IV of the
Treaty may be construed
to limit either the provisions of the first paragraph of Article
IV providing
that each Party shall act, in accordance with its constitutional
processes, to
meet danger threatening the security of the Panama Canal,
or the provisions of
paragraph 2 of Article IV providing that the United States
of America shall have
primary responsibility to protect and defend the Canal for
the duration of the
Treaty.
(3) Nothing in paragraph 4(c) of Article XIII of the Treaty
shall be construed
to limit the authority of the United States of America, through
the United
States Government agency called the Panama Canal Commission,
to make such
financial decisions and incur such expenses as are reasonable
and necessary for
the management, operation, and maintenance of the Panama Canal.
In addition,
toll rates established pursuant to paragraph 2(d) of Article
III need not be set
at levels designed to produce revenues to cover the payment
to the Republic of
Panama described in paragraph 4(c) of Article XIII.
(4) Any agreement concluded pursuant to paragraph II of Article
IX of the Treaty
with respect to the transfer of prisoners shall be concluded
in accordance with
the constitutional processes of both Parties.
(5) Nothing in the Treaty, in the Annex or Agreed Minute
relating to the Treaty,
or in any other agreement relating to the Treaty obligates
the United States of
America to provide any economic assistance, military grant
assistance, security
supporting assistance, foreign military sales credits, or
international military
education and training to the Republic of Panama. (6) The
President shall
include all reservations and understandings incorporated by
the Senate in this
resolution of ratification in the instrument of ratification
to be exchanged
with the Government of the Republic of Panama.
Treaty Concerning the Permanent Neutrality and Operation of
the Panama Canal
The United States of America and the Republic of Panama have
agreed upon the
following:
Article I
The Republic of Panama declares that the Canal, as an international
transit
waterway, shall be permanently neutral in accordance with
the regime established
in this Treaty. The same regime of neutrality shall apply
to any other
international waterway that may be built either partially
or wholly in the
territory of the Republic of Panama.
Article II
The Republic of Panama declares the neutrality of the Canal
in order that both
in time of peace and in time of war it shall remain secure
and open to peaceful
transit by the vessels of all nations on terms of entire equality,
so that there
will be no discrimination against any nation, or its citizens
or subjects,
concerning the conditions or charges of transit, or for any
other reason, and so
that the Canal, and therefore the Isthmus of Panama, shall
not be the target of
reprisals in any armed conflict between other nations of the
world. The
foregoing shall be subject to the following requirements:
(a) Payment of tolls and other charges for transit and ancillary
services,
provided they have been fixed in conformity with the provisions
of Article III
(c);
(b) Compliance with applicable rules and regulations, provided
such rules and
regulations are applied in conformity with the provisions
of Article III;
(c) The requirement that transiting vessels commit no acts
of hostility while in
the Canal; and
(d) Such other conditions and restrictions as are established
by this Treaty.
Article III
1. For purposes of the security, efficiency and proper maintenance
of the Canal
the following rules shall apply:
(a) The Canal shall be operated efficiently in accordance
with conditions of
transit through the Canal, and rules and regulations that
shall be just,
equitable and reasonable, and limited to those necessary for
safe navigation and
efficient, sanitary operation of the Canal;
(b) Ancillary services necessary for transit through the
Canal shall be
provided;
(c) Tolls and other charges for transit and ancillary services
shall be just,
reasonable, equitable and consistent with the principles of
international law;
(d) As a pre-condition of transit, vessels may be required
to establish clearly
the financial responsibility and guarantees for payment of
reasonable and
adequate indemnification, consistent with international practice
and standards,
for damages resulting from acts or omissions of such vessels
when passing
through the Canal. In the case of vessels owned or operated
by a State or for
which it has acknowledged responsibility, a certification
by that State that it
shall observe its obligations under international law to pay
for damages
resulting from the act or omission of such vessels when passing
through the
Canal shall be deemed sufficient to establish such financial
responsibility;
(e) Vessels of war and auxiliary vessels of all nations shall
at all times be
entitled to transit the Canal, irrespective of their internal
operation, means
of propulsion, origin, destination or armament, without being
subjected, as a
condition of transit, to inspection, search for surveillance.
However, such
vessels may be required to certify that they have complied
with all applicable
health, sanitation and quarantine regulations. In addition,
such vessels shall
be entitled to refuse to disclose their internal operation,
origin, armament,
cargo or destination. However, auxiliary vessels may be required
to present
written assurances, certified by an official at a high level
of the government
of the State requesting the exemption, that they are owned
or operated by that
government and in this case are being used only on government
non-commercial
service.
2. For the purposes of this Treaty, the terms "Canal,"
"vessel of war,"
"auxiliary vessel," "internal operation,"
"armament" and "inspection" shall have
the meanings assigned them in Annex A to this Treaty.
Article IV
The United States of America and the Republic of Panama agree
to maintain the
regime of neutrality established in this Treaty, which shall
be maintained in
order that the Canal shall remain permanently neutral, notwithstanding
the
termination of any other treaties entered into by the two
Contracting Parties.
Article V
After the termination of the Panama Canal Treaty, only the
Republic of Panama
shall operate the Canal and maintain military forces, defense
sites and military
installations within its national territory.
Article VI
1. In recognition of the important contributions of the United
States of America
and of the Republic of Panama to the construction, operation,
maintenance, and
protection and defense of the Canal, vessels of war and auxiliary
vessels of
those nations shall, notwithstanding any other provisions
of this Treaty, be
entitled to transit the Canal irrespective of their internal
operation, means of
propulsion, origin, destination, armament or cargo carried.
Such vessels of war
and auxiliary vessels will be entitled to transit the Canal
expeditiously.
2. The United States of America, so long as it has responsibility
for the
operation of the Canal, may continue to provide the Republic
of Colombia tollfree
transit through the Canal for its troops, vessels and materials
of war.
Thereafter, the Republic of Panama may provide the Republic
of Colombia and the
Republic of Costa Rica with the right of toll-free transit.
Article VII
1. The United States of America and the Republic of Panama
shall jointly sponsor
a resolution in the Organization of American States opening
to accession by all
nations of the world the Protocol to this Treaty whereby all
the signatories
will adhere to the objective of this Treaty, agreeing to respect
the regime of
neutrality set forth herein.
2. The Organization of American States shall act as the depositary
for this
Treaty and related instruments.
Article VIII
This Treaty shall be subject to ratification in accordance
with the
constitutional procedures of the two Parties. The instruments
of ratification of
this Treaty shall be exchanged at Panama at the same time
as the instruments of
ratification of the Panama Canal Treaty, signed this date,
are exchanged. This
Treaty shall enter into force, simultaneously with the Panama
Canal Treaty, six
calendar months from the date of the exchange of the instruments
of
ratification.
DONE at Washington, this 7th day of September, 1977, in the
English and Spanish
languages, both texts being equally authentic.
Annex A
1. "Canal" includes the existing Panama Canal, the
entrances thereto and the
territorial seas of the Republic of Panama adjacent thereto,
as defined on the
map annexed hereto (Annex B), and any other interoceanic waterway
in which the
United States of America is a participant or in which the
United States of
America has participated in connection with the construction
or financing, that
may be operated wholly or partially within the territory of
the Republic of
Panama, the entrances thereto and the territorial seas adjacent
thereto.
2. "Vessel of war" means a ship belonging to the
naval forces of a State, and
bearing the external marks distinguishing warships of its
nationality, under the
command of an officer duly commissioned by the government
and whose name appears
in the Navy List, and manned by a crew which is under regular
naval discipline.
3. "Auxiliary vessel" means any ship, not a vessel
of war, that is owned or
operated by a State and used, for the time being, exclusively
on government noncommercial
service.
4. "Internal operation" encompasses all machinery
and propulsion systems, as
well as the management and control of the vessel, including
its crew. It does
not include the measures necessary to transit vessels under
the control of
pilots while such vessels are in the Canal.
5. "Armament" means arms, ammunition, implements
of war and other equipment of a
vessel which possesses characteristics appropriate for use
for warlike purposes.
6. "Inspection" includes on-board examination of
vessel structure, cargo,
armament and internal operation. It does not include those
measures strictly
necessary for admeasurement, nor those measures strictly necessary
to assure
safe, sanitary transit and navigation, including examination
of deck and visual
navigation equipment, nor in the case of live cargoes, such
as cattle or other
livestock, that may carry communicable diseases, those measures
necessary to
assure that health and sanitation requirements are satisfied.
United States
Senate Modifications (Incorporated Into the June 1978 Instruments
of
Ratification)
(a) AMENDMENTS
(1) At the end of Article IV, insert the following:
"A correct and authoritative statement of certain rights
and duties of the
Parties under the foregoing is contained in the Statement
of Understanding
issued by the Government of the United States of America on
October 14, 1977,
and by the Government of the Republic of Panama on October
18, 1977, which is
hereby incorporated as an integral part of this Treaty, as
follows:
```Under the Treaty Concerning the Permanent Neutrality and
Operation of the
Panama Canal (the Neutrality Treaty), Panama and the United
States have the
responsibility to assure that the Panama Canal will remain
open and secure to
ships of all nations. The correct interpretation of this principle
is that each
of the two countries shall, in accordance with their respective
constitutional
processes, defend the Canal against any threat to the regime
of neutrality, and
consequently shall have the right to act against any aggression
or threat
directed against the Canal or against the peaceful transit
of vessels through
the Canal.
```This does not mean, nor shall it be interpreted as, a
right of intervention
of the United States in the internal affairs of Panama. Any
United States action
will be directed at insuring that the Canal will remain open,
secure, and
accessible, and it shall never be directed against the territorial
integrity or
political independence of Panama.'''
(2) At the end of the first paragraph of Article VI, insert
the following:
``In accordance with the Statement of Understanding mentioned
in Article IV
above: `The Neutrality Treaty provides that the vessels of
war and auxiliary
vessels of the United States and Panama will be entitled to
transit the Canal
expeditiously. This is intended, and it shall so be interpreted,
to assure the
transit of such vessels through the Canal as quickly as possible,
without any
impediment, with expedited treatment, and in case of need
or emergency, to go to
the head of the line of vessels in order to transit the Canal
rapidly.'''
(b) CONDITIONS:
(1) Notwithstanding the provisions of Article V or any other
provision of the
Treaty, if the Canal is closed, or its operations are interfered
with, the
United States of America and the Republic of Panama shall
each independently
have the right to take such steps as each deems necessary,
in accordance with
its constitutional processes, including the use of military
force in the
Republic of Panama, to reopen the Canal or restore the operations
of the Canal,
as the case may be.
(2) The instruments of ratification of the Treaty shall be
exchanged only upon
the conclusion of a Protocol of Exchange, to be signed by
authorized
representatives of both Governments, which shall constitute
an integral part of
the Treaty documents and which shall include the following:
``Nothing in the Treaty shall preclude the Republic of Panama
and the United
States of America from making, in accordance with their respective
constitutional processes, any agreement or arrangement between
the two countries
to facilitate performance at any time after December 31, 1999,
of their
responsibilities to maintain the regime of neutrality established
in the Treaty,
including agreements or arrangements for the stationing of
any United States
military forces or the maintenance of defense sites after
that date in the
Republic of Panama that the Republic of Panama and the United
States of America
may deem necessary or appropriate.''
(c) RESERVATIONS:
1) Before the date of entry into force of the Treaty, the
two Parties shall
begin to negotiate for an agreement under which the American
Battle Monuments
Commission would, upon the date of entry into force of such
agreement and
thereafter, administer, free of all taxes and other charges
and without
compensation to the Republic of Panama and in accordance with
the practices,
privileges, and immunities associated with the administration
of cemeteries
outside the United States of America by the American Battle
Monuments
Commission, including the display of the flag of the United
States of America,
such part of Corozal Cemetery in the former Canal Zone as
encompasses the
remains of citizens of the United States of America.
(2) The flag of the United States of America may be displayed,
pursuant to the
provisions of paragraph 3 of Article VII of the Panama Canal
Treaty, at such
part of Corozal Cemetery in the former Canal Zone as encompasses
the remains of
citizens of the United States of America.
(3) The President--
(A) shall have announced, before the date of entry into force
of the Treaty, his
intention to transfer, consistent with an agreement with the
Republic of Panama,
and before the date of termination of the Panama Canal Treaty,
to the American
Battle Monuments Commission the administration of such part
of Corozal Cemetery
as encompasses the remains of citizens of the United States
of America; and
(B) shall have announced, immediately after the date of exchange
of instruments
of ratification, plans, to be carried out at the expense of
the Government of
the United States of America, for--
(i) removing, before the date of entry into force of the
Treaty, the remains of
citizens of the United States of America from Mount Hope Cemetery
to such part
of Corozal Cemetery as encompasses such remains, except that
the remains of any
citizen whose next of kin objects in writing to the Secretary
of the Army not
later than three months after the date of exchange of the
instruments of
ratification of the Treaty shall not be removed; and
(ii) transporting to the United States of America
for reinterment, if the next of kin so requests, not later
than thirty months
after the date of entry into force of the Treaty, any such
remains encompassed
by Corozal Cemetery and, before the date of entry into force
of the Treaty, any
remains removed from Mount Hope Cemetery pursuant to subclause
(i); and
(C) shall have fully advised, before the date of entry into
force of the Treaty,
the next of kin objecting under clause (B) (i) of all available
options and
their implications.
(4) To carry out the purposes of Article III of the Treaty
of assuring the
security, efficiency, and proper maintenance of the Panama
Canal, the United
States of America and the Republic of Panama, during their
respective periods of
responsibility for Canal operation and maintenance, shall,
unless the amount of
the operating revenues of the Canal exceeds the amount needed
to carry out the
purposes of such Article, use such revenues of the Canal only
for purposes
consistent with the purposes of Article III.
(d) UNDERSTANDING:
(1) Paragraph 1 (c) of Article III of the Treaty shall be
construed as
requiring, before any adjustment in tolls for use of the Canal,
that the effects
of any such toll adjustment on the trade patterns of the two
Parties shall be
given full consideration, including consideration of the following
factors in a
manner consistent with the regime of neutrality:
(A) the costs of operating and maintaining the Panama Canal;
(B) the competitive position of the use of the Canal in relation
to other means
of transportation;
(C) the interests of both Parties in maintaining their domestic
fleets;
(D) the impact of such an adjustment on the various geographic
areas of each of
the two Parties; and
(E) the interests of both Parties in maximizing their international
commerce.
The United States of America and the Republic of Panama shall
cooperate in
exchanging information necessary for the consideration of
such factors.
(2) The agreement `to maintain the regime of neutrality established
in this
Treaty' in Article IV of the Treaty means that either of the
two Parties to the
Treaty may, in accordance with its constitutional processes,
take unilateral
action to defend the Panama Canal against any threat, as determined
by the Party
taking such action.
(3) The determination of `need or emergency' for the purpose
of any vessel of
war or auxiliary vessel of the United States of America or
the Republic of
Panama going to the head of the line of vessels in order to
transit the Panama
Canal rapidly shall be made by the nation operating such vessel.
(4) Nothing in the Treaty, in Annex A or B thereto, in the
Protocol relating to
the Treaty, or in any other agreement relating to the Treaty,
obligates the
United States of America to provide any economic assistance,
military grant
assistance, security supporting assistance, foreign military
sales credits, or
international military education and training to the Republic
of Panama.
(5) The President shall include all amendments, conditions,
reservations, and
understandings incorporated by the Senate in this resolution
of ratification in
the instrument of ratification to be exchanged with the Government
of the
Republic of Panama.
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