Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1957, Volume XVII

280. Telegram From the Embassy in Egypt to the Department of State¹

Cairo, April 11, 1957—7 p.m.

3201. Reference: Embtel 3190.² Following is current text of Suez Canal declaration furnished today by Foreign Minister at my request: Personal and Confidential

Draft Declaration

Preamble

The Government of Egypt are pleased to announce that the Suez Canal will be open for normal traffic by mid-April, and will thus once again serve as a link between the nations of the world in the cause of peace and prosperity.

The Government of Egypt acknowledges with appreciation and gratitude the efforts of the states and peoples of the world who contributed to the restoration of the canal for normal traffic and of the United Nations whose exertions enabled the clearance of the canal to be accomplished peacefully and in a short time.

In elaboration of the principles set out in their memorandum dated the 18 of March 1957, the Government of Egypt, hereby, make the following declaration on the problems connected with the Suez Canal and the arrangements for its operation.

1. Reaffirmation of the Convention

It remains the unaltered policy and firm purpose of the Government of Egypt to respect the terms and the spirit of the Constantinople Convention of 1888 and the rights and obligations arising therefrom. The Government of Egypt will continue to respect, observe and implement them.

2. Observance of the Convention and of the Charter of the United Nations

While re-affirming their determination to respect the terms and the spirit of the Constantinople Convention of 1888, and to abide by the charter and the principles and purposes of the United Nations, the Government of Egypt are confident that the other signatories of the said convention and all others concerned will be guided by the same resolve.

3. Disputes, Disagreements or Differences Arising out of the Convention or this Declaration

(A) Disputes or disagreements arising in respect of the Constantinople Convention of 1888 or this declaration shall be settled in accordance with the charter of the United Nations.

(B) Differences arising between the parties to the said convention in respect of the interpretation or application of its provisions, if not otherwise resolved, will be referred to the International Court of Justice under Article 36 of its statute or by agreement, to an appropriate organ of the United Nations.

4. Freedom of Navigation, Tolls and Development of the Canal

The Government of Egypt are more particularly determined

(A) To afford and maintain free and uninterrupted navigation for all nations in accordance with the Constantinople Convention of 1888.

(B) That tolls shall continue to be levied in accordance with the last agreement concluded on the 28 of April 1936, between the Government of Egypt and the Suez Canal Maritime Company; and that any increase in the current rate of tolls within any 12 months, if they take place, shall be limited to one percent, and any increase beyond that level to be the result of negotiations, and failing agreement, by arbitration according to the procedure set forth in paragraph 8(B).

(C) That the canal is maintained and developed in accordance with the progressive requirements of modern navigation and that such maintenance and development shall include the eighth and ninth programs of the Suez Canal Maritime Company, with such improvements to them as are considered necessary.

5. Operation and Management

The canal will be operated and managed by the autonomous Suez Canal Authority established by the Government of Egypt on the 26 of July 1956. The Government of Egypt are looking forward with confidence to continued cooperation with the nations of the world in advancing the usefulness of the canal.

6. Financial Arrangements

(A) Tolls shall be payable in advance to the account of the Suez Canal Authority at any bank as may be authorized by it. In pursuance of this, the Suez Canal Authority has authorized the National Bank of Egypt and the Bank of International Settlement to accept on its behalf payment of canal tolls.

(B) The Suez Canal Authority shall pay to the Government of Egypt 5 percent of all the gross receipts as royalty.

(C) The Government of Egypt will establish a Suez Canal capital and development fund into which shall be paid 25 percent of all gross receipts. This fund will assure that there shall be available to the Government of Egypt adequate resources to meet the needs of development and capital expenditure for the fulfillment of the responsibilities they have assumed and are fully determined to discharge.

7. Canal Code

The regulations governing the Canal, including the details of its operation, are embodied in the Canal Code which is the law of the Canal. Due notice will be given of any alteration in the Code, and any such alteration, if it affects the principles and commitments in the declaration and is challenged or complained against for that reason shall be dealt with in accordance with the procedures set out in paragraph 8 (A).

8. Discrimination and Complaints Relating to the Canal Code

(A) In pursuance of the principles laid down in the Constantinople Convention of 1888, the Suez Canal authority, by the terms of its statute, can in no case grant any vessel, company or other party any advantage or favour not accorded to other vessels, companies or parties on the same conditions.

(B) Complaints of discrimination or violation of the Canal Code shall be sought to be resolved by the complaining party by reference to the Suez Canal authority. In the event such a reference does not resolve the complaint, the matter may be referred, at the option of the complaining party or the authority, to an arbitration tribunal composed of one nominee of the complaining party, one of the authority and a third to be chosen by both. In case of disagreement, such third member will be chosen by the President of the International Court of Justice upon the application of either party.

(C) The decisions of the arbitration tribunal shall be made by a majority of its members. A majority shall constitute a quorum. The decisions shall be binding upon the parties when they are rendered and these must be carried out in good faith.

(D) The Government of Egypt will study the further appropriate arrangements that could be made for fact-finding, consultation and arbitration on complaints relating to the Canal Code.

9. Compensation and Claims

The question of compensation and claims in connection with the nationalization of the Suez Canal Maritime Company shall, unless agreed between the parties concerned, be referred to arbitration in accordance with the established international practice.

The Government of Egypt make this declaration, which reaffirms and is in full accord with the terms and spirit of the Constantinople Convention of 1888, as an expression of their desire and determination to enable the Suez Canal to be an efficient and adequate waterway linking the nations of the world and serving the causes of peace and prosperity. They do so in full confidence that it will meet with the good will and cooperation of the nations of the world.

This declaration, with the obligations therein, constitutes an international instrument and will be deposited and registered with the Secretariat of the United Nations in accordance with Article 102 of the Charter.

Hare

1. Source: Department of State, Central Files, 974.7301/4–1157. Confidential; Priority. Received at 10:43 p.m.
2. In telegram 3190 from Cairo, April 11, Hare transmitted to the Department of State an advance summary of his conversation with Nasser, which had lasted ½ hours the evening of April 10. (Ibid.)

   During the morning of April 10 in Cairo, Hare participated in a 2-hour discussion with Fawzi, who had spoken with Nasser the previous evening. In his preliminary remarks, Fawzi conveyed a plea for understanding and for a relaxation in what he maintained were excessive demands. He then discussed the Egyptian draft declaration on a paragraph-by-paragraph basis, at certain points yielding to American suggestions and at other points rejecting them. The revised text of the draft declaration, which incorporated the changes offered by Fawzi during this meeting, is in telegram 3201.

   Hare’s account of his conversation with Nasser on April 10 is in telegram 3204, infra.