Foreign Relations of the United States, 1955–1957, Suez Crisis, July 26–December 31, 1956, Volume XVI

198. Paper Prepared by the Secretary of State¹

Washington, September 9, 1956.

OUTLINE OF PROPOSAL FOR A VOLUNTARY ASSOCIATION OF SUEZ CANAL USERS

I.

The need for user cooperation

The Convention of 1888 provided that the Canal “shall always be free and open” and gave “every vessel of commerce or of war, without distinction of flag” a right of use of the waterway. All parties agreed “not in any way to interfere with the free use of the Canal” (Article 1). Moreover, the parties agreed to respect the plant, establishments, buildings, and works of the Maritime Canal (Article 3). The agents of the signatory powers were charged to watch over its execution (Article 8), and Egypt, which was then a part of the Ottoman Empire and on whose behalf the Treaty was signed by Turkey, was bound to take (shall take) the necessary measures for insuring the execution of the Convention (Article 9).

The rights thus accorded under the Convention of 1888 constitute a perpetual easement to use the Canal freely.

It is obvious that the users’ rights can best be exercised by cooperation as among the users, and as between the users and Egypt through whose territory the Canal passes. Such cooperation was deemed assured at least until 1968 by the concession to the Universal Suez Canal Company which is referred to in the Treaty of 1888. However, the Government of Egypt acted unilaterally to annul that concession, and while the legality of that action is open to serious question, the Government of Egypt itself treats the concession as annulled and the cooperative arrangement evidenced thereby as terminated.

In the face of this situation the seven nations which constitute the only indisputable survivors of the signatories to the 1888 Treaty, together with eight other nations which, with the foregoing, represent over 90 percent of the ownership of shipping through the Canal, together with seven other nations whose pattern of foreign trade shows distinctive dependence on the Canal, met at London to consider the situation. 18 of the 22, including nations of Europe, Asia, Africa, America and Australia, agreed on proposals for cooperation with Egypt which gave Egypt the maximum participation which they deemed compatible with their own rights under the 1888 Convention. These 18–power proposals were carried to Egypt by a Committee of Five and explained to the Government of Egypt. The Government of Egypt rejected these proposals and did not suggest any alternative proposal for cooperation.

Under the circumstances it has become both appropriate and necessary that the governments of the users should organize as among themselves for the most effective possible enjoyment of the right of passage given by the 1888 Convention. Of course, each user could exercise that right independently. But the requirements for pilotage and for a coordinated pattern of traffic are such as to make user cooperation a practical necessity.

Accordingly, in order effectively to carry out the stated purpose of the Convention of 1888 to guarantee at all times and for all the powers the free use of the Suez Maritime Canal, the governments subscribing hereto have agreed to create and join a voluntary Cooperative Association of Suez Canal Users (CASU).

II.

Basic Purposes of CASU

The Association (CASU) will function according to the following principles:

(1) To organize the use of the Canal by member controlled vessels so as to promote safe, orderly, efficient and economical transit, and

(2) To assure that such use will, as among member controlled vessels, be impartial and uninfluenced for or against any ship or cargo by reason of the policies of any government;

(3) To cooperate with Egypt in the discharge by Egypt of its obligation to take the necessary measures for insuring the execution of the 1888 Convention;

(4) To coordinate generally, on behalf of the members, the rights of users granted by the 1888 Convention, with scrupulous regard for the sovereign rights of Egypt in consonance with the 1888 Convention.

III.

The Form of Organization

Membership in the Association

The Association shall consist of the governments subscribing hereto and it shall remain open to all nations, whose nationals or ships of registry have been users to the extent of—gross tons or more of the Canal or whose foreign trade has, to the extent of—percent or more passed through the Canal, on the basis of the last calendar year’s figures available, and the governments of which accept the principles above set forth.

Other governments which desire to obtain the benefit of the facilities of CASU may become affiliates on a basis of equality by indicating such desire and by subscribing to the principles above set forth in Section II.

Organization

The headquarters of the Association will be established at Rome.

The nations members of the Association will create an Executive Group consisting of 5 nations which shall be chosen from among their members with due regard to use, pattern of trade, and geographical distribution; the composition of the Executive Group to be such as to assure that its responsibilities will be discharged solely with a view to achieving the best possible operating results without political motivation in favor of, or in prejudice against, any user of the Canal.

The term of office of the members of the Executive Group shall be one year, with eligibility for reelection.

The Executive Group would make periodic reports to the United Nations and would be authorized to develop such further relations with the United Nations as may be agreed upon by the Association and the United Nations.

The Executive Group will be responsible for giving general policy guidance to the Administrator, hereafter referred to, in carrying out the objectives of the Association. It shall be responsible for approving the scale of salaries and wages of the employees and shall prepare the annual budget, for approval by the Association, on the basis of which will be calculated the fees payable by ships using the facilities of the Association.

Members of the Association will advance to the Executive Group a working fund of $— to be reimbursed out of fees collected from ships using the facilities of the Association.

The ship-scheduling points, unless otherwise determined by the Executive Group, shall be designated vessels of one or more of the member governments stationed in the ports of access of Port Said and Suez as expressly authorized by Article 7 of the Convention of 1888.

The Association shall, upon the recommendation of the Executive Group, designate an individual Administrator to administer the operations of the Association and the members will give such assistance to the Administrator as may be useful for the effective operation of the Association.

The Administrator, subject to the authority of the Executive Group, shall have the following powers:

To establish and control the scheduling for ships using the facilities of the Association;

To allocate pilots to the masters of such ships;

To employ the personnel necessary for the operation of the Association, including the hiring and training of pilots;

To make such rules and regulations for ships using the facilities of the Association as in his opinion will best insure free and unobstructed transit of the Canal;

To take the steps necessary, under the direction of the Executive Group, to insure the maintenance and repair of the Canal, and the facilities incidental thereto, and to remove obstructions from the Canal should they occur;

To collect fees from ships using the facilities of the Association, which the Executive Group shall establish as equitable and necessary to defray the costs of the operations of the Association, without profit to any member;

To make available the services and facilities of the Association to ships of any nation at all times. (Ships of members or affiliates of the Association, however, shall, whenever necessary, have priority in the use of the services and facilities of the Association.)

IV.

The Association’s Relations with Egypt

The Association will cooperate with the Egyptian Government to insure that the Canal remains free and unobstructed to shipping. The Administrator, under the guidance of the Executive Group, will maintain such relations with the Egyptian Government as may be acceptable to the Egyptian Government and necessary to effect such cooperation. It will reimburse the Government of Egypt for any expenses reasonably incurred by it in connection with the performance by Egypt of the measures to which Egypt is obligated, by the Convention of 1888, to assure the free and open use of the Canal.

V.

Settlement of Disputes

Disputes arising between members of the Association relating to their rights and obligations as members of the Association, or as users of the Canal shall be settled by the Executive Group.

VI.

Meetings of the Association

The Association shall act by meetings of its members. Affirmative action will require a vote which represents both a majority of the members and a majority in terms of the registry of member tonnage through the Canal during the last calendar year for which statistics are available. If the nation of ship registry is not a member of the Association, then the tonnage shall be credited to the member nation whose nationals possess ownership of such tonnage.

VII.

Withdrawal of Members or Affiliates

Members of the Association or affiliates may withdraw from the Organization at any time by giving notice to the Executive Group.

1. Source: Department of State, Conference Files: Lot 62 D 181, CF 722. Secret. The source text indicates that this paper was the fourth draft and that it was drafted by Dulles. It also bears the handwritten marginal notation: “cc—UK. 9/9 Phleger. cc—French 9/10”.