711F.1914/4–1047: Telegram

The Ambassador in Panama (Hines) to the Secretary of State

secret

186. Embtel 185, April 10.17 Following is office translation of Alfaro’s proposed defense sites agreement:

“Preamble. Governments of Republic of Panama and of US of America have consulted together to consider all of phases of situation existing since termination of wartime emergency as well as to discuss experiences of last war in relation to defense of Panama Canal; and after complete interchange of information with relation to present needs, have reaffirmed their joint interest in providing for continued security of Canal, of Republic, and of entire hemisphere, [Page 893] have reiterated their mutual determination to assure continued and effective protection of Panama Canal as is stipulated in general treaty of March 2, 1936, and exchange of notes relating thereto; and have come to conclusion that in present circumstances functioning of certain defense sites existing in territory under jurisdiction of Panama should not be interrupted, but on contrary that it is imperative to continue for prudent time maintenance and functioning of certain of them; in virtue of which undersigned Dr. Ricardo J. Alfaro, Minister of Foreign Relations of Republic of Panama and His Excellency, Frank T. Hines, Ambassador of US of America representing their respective Governments by whom they have been duly and legally authorized have agreed as follows:

Article I. High contracting parties declare terminated agreement of May 18, 1942, it having accomplished its purposes.

High contracting parties at same time declare ended occupation of all defense sites under terms of that agreement and agree that hereafter maintenance of defense sites in territory under jurisdiction of Panama will be regulated by conditions set forth in preamble and stipulations set forth in following articles.

Article 2. Republic of Panama designates temporarily areas specified in Annex A19 attached to this agreement and of which it forms an integral part, to serve as sites intended for defense of Panama Canal for limited period specified for each one. These defense sites will be maintained under joint authority of Governments of Panama and of US.

Article 3. For exercise of joint authority of Republic of Panama and US over defense sites which this agreement covers, Government of Republic of Panama designates Minister of Government and Justice and Government of US of America, Commanding General of Caribbean Defense. Two Governments will determine through agreement means by which this joint authority will be exercised.

Article 4. Republic of Panama retains its sovereignty over areas used as defense sites and over air space corresponding to same, as well as jurisdiction in civil matters, it being understood, nonetheless, that Government of US will have exclusive jurisdiction over civilian and military personnel of US to be stationed on defense sites and over their families.

Article 5. Government of US will pay to Government of Panama on first day of February of each year, or before, an annual compensation of blank Balboas per hectare for preceding year for all lands used as defense sites in accordance with terms of this agreement. Payment [Page 894] will be reduced proportionately in case of periods of less than a year.

Government of Republic of Panama will assume, with respect to lands used as defense sites, all expenses of expropriation, as well as indemnifications and reimbursements for installations, cultivated lands, or other improvements that may exist.

There will be expressly excepted from provisions of paragraphs 2 and 3 (sic) of this article:

(a)
Piece of land in township of Rio Hato designated as number blank in Annex A for which Government of US will pay to Government of Republic of Panama an annual compensation of blank Balboas.
(b)
Entire area of Island of San Jose, in Archipelago of Las Perlas in Bay of Panama, designated as number blank in Annex A, for which Government of US will pay to Government of Republic of Panama an annual compensation of blank Balboas.

Compensation established in this article will be paid in Balboas as they were defined in exchange of notes effected March 2, 1936, to which Article 7 of treaty of that date between US of America and Republic of Panama refers, or equivalent in dollars, and shall be paid from date on which use of each defense site shall have been commenced, in accordance with terms of this agreement.

Representatives of Republic of Panama and of US will inform their respective govts of date on which each use has commenced within 30 days following that date.

Article 6. When defense site or part of same is not needed for defense of Canal its use will be discontinued on date which representatives of 2 Govts will agree upon. Representatives of Panama and US will notify 2 Govts not less than ninety days prior to date they have set unless 2 Govts are in agreement to accept lesser period of time.

All buildings construction, installations or accessories which may have been erected or placed by US on defense sites will be property of US and may be taken away by it before cessation of use of defense site. Buildings, constructions, accessories, crops, cultivated areas or whatever other improvements exist at time defense site commences to be used, may be used for same purposes. US will not be obligated to pay for damages caused in whatever manner on same, and Republic of Panama will not be obligated to pay compensations to US for improvements made on defense site or for buildings, constructions or properties left on them, all of which will become property of Republic of Panama on discontinuance of use of defense site.

Article 7. Republic of Panama and US reiterate their understanding with respect to temporary nature of occupation of defense sites to which this agreement refers. Consequently US recognizing importance [Page 895] of cooperation rendered by Panama in making available these temporary defense sites, and recognizing also burden that maintenance of these sites signifies for Republic of Panama will obligate itself expressly to conform with necessary measures so that disoccupation of said sites will be effected no later than date of expiration of period stipulated with respect to each site in Annex A, if in opinion of 2 Govts causes and circumstances which have determined maintenance of defense sites should have ceased.

Article 8. Civilian and military personnel of US which by agreement between 2 Govts function at defense sites or are employed in relation to operation of those sites and families of such personnel as well as property and effects destined to sites will be free of all duties, contributions or taxes of any sort on part of Republic of Panama or its political subdivisions during period of this agreement.

It is established however that with respect to customs duties there will only be exempt merchandise and articles for consumption of civilian and military personnel and for families of such personnel when such merchandise and articles are produced in US.

Article 9. This agreement may be terminated by contracting parties through an agreement between each other even prior to expiration of terms stipulated in Annex A for maintenance of defense sites, but its operation will terminate in any case on expiration of greatest of said periods.

Article 10. This agreement will be submitted to National Assembly of Panama, in accordance with constitutional precepts governing public treaties, but in view of circumstances set forth in preamble, 2 Govts agree that this agreement, maintaining its character of referendum, will enter into effect on date of its signature by representatives of Panama and U.S.

In faith of which plenipotentiaries of high contracting parties have signed this agreement in duplicate in English and Spanish, both texts of equal authenticity, and have affixed their respective seals.[”]20

Hines
  1. Not printed.
  2. Not printed.
  3. The annex to this draft is not printed, but see p. 939 for the annex accompanying the final text of the agreement dated December 10, 1947.