Panama and the United States, and Memorandum of Understandings Reached (The Eisenhower-Remon Treaty), January 25, 1955* 1 Agreement With Panama Concerning Panama Canal Press release 41 dated January 26 Representatives of the United States and the Republic of Panama signed today a Treaty of Mutual Understanding and Cooperation and Memorandum of Understandings Reached concerning relations between the two countries arising from the construction, operation, maintenance, and protection of the Panama Canal by the United States in accordance with existing treaties. The signing of these two instruments results from negotiations between the two countries which commenced in September 1953. The two instruments were signed in Panama City by Foreign Minister Octavio Fábrega for Panama and by Ambassador Selden Chapin for the United States. The principal provisions of these agreements are the following: The annuity will be increased from $430,000 to $1,930,000; Panama will be able to levy income tax on employees of Canal Zone agencies who are Panamanian citizens and others who are not U.S. citizens and who reside in territory under the jurisdiction of Panama; transfer to Panama of certain lands, with improvements, in territory under Panamanian jurisdiction, previously acquired for Canal purposes, including Paitilla Point and the Panama Railroad yard and the station in Panama City and the gradual turnover of the New Cristobal, Colon Beach, and Fort de Lesseps area in Colón; alterations in the boundary between the city of Colón and the Canal Zone; restriction of commissary and import privileges of non-U.S. citizen employees of Canal Zone agencies who do not reside in the Zone; abrogation of the U.S. treaty monopoly with respect to the construction of trans-Isthmian railroads and highways; abrogation of the U.S. treaty right to prescribe and enforce sanitary measures in the cities of Panamá and Colón; the U.S. Congress will be requested to enact legislation authorizing the es tablishment of a single basic wage scale for all U.S. and Panamanian employees of the U.S. Government in the Canal Zone and providing for uniform application of the Civil Service Retirement Act to citizens of Panama employed by the U.S. Government in the Canal Zone; the United States agrees to put into effect certain administra tive practices designed to enable the Panamanian economy to obtain an increased share in the business of supplying the Canal Zone market including the withdrawal, as of December 31, 1956, of U.S. agencies from the business of selling supplies (except fuel and lubricants) to non-U.S. Government owned or operated ships and the termination, under certain conditions, of manufacturing and processing in the Canal Zone of goods for sale to or consumption by individuals; the U.S. Congress will be requested to authorize the construction of a bridge across the Canal at Balboa referred to in point 4 of the General Relations Agreement of 1942; Panama grants to the United States the right to use, for a period of 15 years without cost, a military training and maneuver area in the province of Cocle; Panama waives certain treaty rights to enable the United States to restrict heavy vehicular traffic over a proposed new strategic highway within the Canal Zone; Panama waives certain rights acquired by treaty to free transportation on the Panama Railroad; Panama waives certain treaty provisions to enable the United States to extend limited post exchange privileges to friendly foreign military personnel visiting the Canal Zone under auspices of the United States; Panama agrees to lease to the United States, for a period of 99 years without cost save for a recited nominal consideration, two parcels of land contiguous to the U.S. Embassy residence in Panama City; and Panama agrees permanently to reserve as a park area certain land in front of the U.S. Embassy office building in Panama City. *Department of State Bulletin, v. 32, February 7, 1955, p. 237 (followed by the text of the treaty); and United States Treaties and Other International Agreements, vol. 6, part 2, 1955, pp. 2273-2289, 2308, 2329-2338, 2349, 2367, with maps, descriptions of parcels, and text in Spanish omitted. PANAMA Mutual Understanding and Cooperation Treaty, with memorandum of understandings reached; Signed at Panamá January 25, 1955; Ratification advised by the Senate of the United States of America Ratified by the President of the United States of America August 17, 1955; Ratified by Panama August 15, 1955; Ratifications exchanged at Washington August 23, 1955; Proclaimed by the President of the United States of America August 26, 1955; Entered into force August 23, 1955. BY THE PRESIDENT of the United STATES OF AMERICA TIAS 3297 A PROCLAMATION WHEREAS & Treaty of Mutual Understanding and Cooperation between the United States of America and the Republic of Panama, together with a related Memorandum of Understandings Reached, was signed at Panamá on January 25, 1955; WHEREAS the texts of the said Treaty and related Memorandum of Understandings Reached, in the English and Spanish languages, are word for word as follows: TREATY OF MUTUAL UNDERSTANDING AND COOPERATION BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF PANAMA The President of the United States of America and the President of the Republic of Panama, desirous of concluding a treaty further to demonstrate the mutual understanding and cooperation of the two countries and to strengthen the bonds of understanding and friendship between their respective peoples, have appointed for that purpose as their respective Plenipotentiaries: The President of the United States of America: Selden Chapin, Ambassador Extraordinary and Plenipo tentiary of the United States of America to the Republic of Panama, The President of the Republic of Panama: Octavio Fábrega, Minister of Foreign Relations of the Republic of Panama, who, having communicated to one another their respective full powers, found in good and due form, and recognizing that neither the provisions of the Convention signed November 18, 1903, nor the General Treaty signed March 2, 1936, nor the present Treaty, may be modified except by mutual consent, agree upon the following Articles: TS 431. TS 945. 63 Stat., pl. 3, p. 1807 ARTICLE I Beginning with the first annuity payable after the exchange of ratifications of the present Treaty, the payments under Artiele XIV of the Convention for the Construction of a Ship Canal between the United States of America and the Republic of Panama, signed November 18, 1903, as amended by Article VII of the General Treaty of Friendship and Cooperation, signed March 2, 1936, shall be One Million Nine Hundred Thirty Thousand and no/100 Balboas (B/1,930,000) as defined by the agreement embodied in the exchange of notes of March 2, 1936, between the Secretary of State of the United States of America and the Members of the Panamanian Treaty Commission. America may discharge its obligation with respect to any such payment in any coin or currency, provided the amount so paid is the equivalent of One Million Nine Hundred Thirty Thousand and no/100 Balboas (B/1,930,000) as so defined. The United States of On the date of the first payment under the present Treaty, the provisions of this Article shall supersede the provisions of Article VII of the General Treaty signed March 2, 1936. Notwithstanding the provisions of this Article, the High Contracting Parties recognize the absence of any obligation on the part of either Party to alter the amount of the annuity. ARTICLE II (1) Notwithstanding the provisions of Article X of the Convention signed November 18, 1903, between the United States of America and the Republic of Panama, the United States of America agrees that the Republic of Panama may, subject to the provisions of paragraphs (2) and (3) of this Article, impose TS 945. taxes upon the income (including income from sources within the Canal Zone) of all persons who are employed in the service of the Canal, the railroad, or auxiliary works, whether resident within or outside the Canal Zone, except: (a) members of the Armed Forces of the United States of (a) America, citizens of the United States of America, including those who have dual nationality, and (c) other individuals who are not citizens of the Republic of Panama and who reside within the Canal Zone. (2) It is understood that any tax levied pursuant to paragraph (1) of this Article shall be imposed on a non-discriminatory basis and shall in no case be imposed at a rate higher or more burdensome than that applicable to income of citizens of the Republic of Panama generally. (3) The Republic of Panama agrees not to impose taxes on pensions, annuities, relief payments, or other similar payments, or payments by way of compensation for injuries or death occurring in connection with, or incident to, service on the Canal, the railroad, or auxiliary works paid to or for the benefit of members of the Armed Forces or citizens of the United States of America or the lawful beneficiaries of such members or citizens who reside in territory under the jurisdiction of the Republic of Panama. The provisions of this Article shall be operative for the taxable years beginning on or after the first day of January following the year in which the present Treaty enters into force. ARTICLE III Subject to the provisions of the succeeding paragraphs of this Article, the United States of America agrees that the monopoly granted in perpetuity by the Republic of Panama to the United States for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific Ocean, by Article V of the Convention signed November 18, 1903, shall be abrogated as of the effective date of this Treaty in so far as it pertains to the construction, maintenance and operation of any system of trans-Isthmian communication by railroad within the territory under the jurisdiction of the Republic of Panama. Subject to the provisions of the succeeding paragraphs of this Article, the United States further agrees that the exclusive right to establish roads across the Isthmus of Panama acquired by the United States as a result of a concessionary contract granted to the Panama Railroad Company shall be abrogated as of the date of the entry into force of this Treaty, in so far as the right pertains to the establishment of roads within the territory under the jurisdiction of the Republic of Panama. In view of the vital interest of both countries in the effective protection of the Canal, the High Contracting Parties further agree that such abrogation is subject to the understanding that no system of inter-oceanic communication within the territory under the jurisdiction of the Republic of Panama by means of railroad or highway may be financed, constructed, maintained, or operated directly or indirectly by a third country or nationals thereof, unless in the opinion of both High Contracting Parties such financing, construction, maintenance, or operation would not affect the security of the Canal. The High Contracting Parties also agree that such abrogation as is contemplated by this Article shall in no wise affect the maintenance and operation of the present Panama Railroad in the Canal Zone and in territory subject to the jurisdiction of the Republic of Panama. ARTICLE N The second paragraph of Article VII of the Convention signed November 18, 1903, having to do with the issuance of, compliance with, and enforcement of, sanitary ordinances in the Cities of Panamá and Colón, shall be abrogated in its entirety as of the date of entry into force of this Treaty. ARTICLE V The United States of America agrees that, subject to the enactment of legislation by the Congress, there shall be conveyed to the Republic of Panama free of cost all the right, title and interest held by the United States of America or its agencies in and to certain lands and improvements in territory under the jurisdiction of the Republic of Panama when and as determined by the United States to be no longer needed for the operation, maintenance, sanitation or protection of the Panama Canal or of its auxiliary works, or for other authorized purposes of the United States in the Republic of Panama. The lands and improvements referred to in the preceding sentence and the determinations by the United States of America respecting the same, subject to the enactment of legislation by the Congress, |