919.537/8–351: Telegram

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


95. FonMin told Wise this morning Pres has instructed him confer with MinFin and draft decree (Deptels 48, July 26 and 57 July 311) today along fol lines for possible issuance Saturday:

Prohibit transportation aboard Pan flagships to Commie ports cargo all kinds irrespective strategic or non-strategic nature.
Prohibit operation ships between Commie ports.
Ships handling strategic cargo to be fined heavily and ordered unload before proceeding to non-Commie destination. Registry to be cancelled for non-compliance.
Ships furnishing service between Commie ports to lose registry.

From reliable sources Emb has now learned hesitation (Embtel 71 July 301) Pan Govt in issuing decree banning visits ships Commie ports due to lack existing legal basis for such action by executive decree or by decree law. Emb informed that owners at least one vessel under Pan registry have protested violently recent instructions and threatened bring suit against Pan Govt.

Emb is certain Ricardo J. Alfaro was consulted upon arrival by both Pres and FonMin re decree and that he advised them least Pan could do by way of cooperation would be ban ships visiting Commie ports and that he sure legal basis could be found.

Wise did not find FonMin entirely clear in his statement. However, from foregoing it would appear that Pan flagships trading with Commie China in violation of Pan prohibition might not be subject to fines or penalties unless it was legally proved that ships had actually carried strategic cargo. It cld of course be difficult to establish case after the fact. Since this may afford loophole we shall press for clarification. Min has promised receive me before proposed decree is sent to President for signature.

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