Panama Canal Treaty implementation

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Title:
Panama Canal Treaty implementation hearings before the Subcommittee on Immigration, Refugees, and International Law of the Committee on the Judiciary, House of Representatives, Ninety-sixth Congress, first session, on H.R. 1716 ... April 3, 1979
Series Title:
Serial - House, Committee on the Judiciary ; no. 96-3
Physical Description:
iii, 100 p. : ; 24 cm.
Language:
English
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United States -- Congress. -- House. -- Committee on the Judiciary. -- Subcommittee on Immigration, Refugees, and International Law
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U.S. Govt. Print. Off.
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Washington
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Panama Canal Treaties   ( lcsh )
Foreign relations -- Panama -- United States   ( lcsh )
Foreign relations -- United States -- Panama   ( lcsh )
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federal government publication   ( marcgt )
non-fiction   ( marcgt )

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CIS Microfiche Accession Numbers: CIS 79 H521-43
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Reuse of record except for individual research requires license from Congressional Information Service, Inc.

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University of Florida
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 022597774
oclc - 05289490X
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lcc - KF49
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AA00024733:00001

Full Text



PANAMA CANAL TREATY IMPLEMENTATION







HEARINGS
BEFORE THE
SUBCOMMITTEE ON IMMIGRATION, REFUGEES,
AND INTERNATIONAL LAW
OF THE

COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
NINETY-SIXTH CONGRESS
FIRST SESSION ON
H*R* 1716
PANAMA CANAL TREATY IMPLEMENTATION

APRIL 3, 1979


Serial No. 3

Printed for the use of the Committee on the Judiciary


FL


;C AUG

U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1979 EN





















COMMITTEE ON THE JUDICIARY
PETER W. RODINO, JR., New Jersey, Chairman
JACK BROOKS, Texas ROBERT McCLORY, Illinois
ROBERT W. KASTENMEIER, Wisconsin TOM RAILSBACK, Illinois DON EDWARDS, California HAMILTON FISH, JR., New York
JOHN CONYERS, JR., Michigan M. CALDWELL BUTLER, Virginia
JOHN F. SEIBERLING, Ohio CARLOS J. MOORHEAD, California
GEORGE E. DANIELSON, California JOHN M. ASHBROOK, Ohio ROBERT F. DRINAN, Massachusetts HENRY J. HYDE, Illinois
ELIZABETH HOLTZMAN, New York THOMAS N. KINDNESS, Ohio
ROMANO L. MAZZOLI, Kentucky HAROLD S. SAWYER, Michigan
WILLIAM J. HUGHES, New Jersey DAN LUNGREN, California
SAM B. HALL, JR., Texas F. JAMES SENSENBRENNER, JR.,
LAMAR GUDGER, North Carolina Wisconsin
HAROLD L. VOLKMER, Missouri HERBERT E. HARRIS II, Virginia MICHAEL LYNN SYNAR, Oklahoma ROBERT T. MATSUI, California ABNER J. MIKVA, Illinois MICHAEL D. BARNES, Maryland RICHARD C. SHELBY, Alabama ALAN A. PARKER, General Counsel GARNER J. CLINE, Staff Director FRANKLIN G. POLK, As8ociate Counsel


SUBCOMMITTEE ON IMMIGRATION, REFUGEES, AND INTERNATIONAL LAW
ELIZABETH HOLTZMAN, New York, Chairwoman
GEORGE E. DANIELSON, California HAMILTON FISH, JL, New York
SAM B. HALL, JR., Texas M. CALDWELL BUTLER, Virginia
HERBERT E. HARRIS II, Virginia DAN LUNGREN, California
MICHAEL D. BARNES, Maryland RICHARD C. SHELBY, Alabama GARNER J. CLINE, Counsel ARTHUR P. ENDRES, Jr., Counsel RAYMOND D'UVA, Assistant Counsel ALEXANDER B. CooK, Associate Counsel












CONTENTS


Page
Text of H.R. 17160---------------------------------------------------- 2

WITNESSES

Moss, Hon. Ambler H. Jr., U.S. Ambassador to the Republic of Panama-- 08
Prepared statement-----------------------------------------------068
Popper, Hon. David H., Special Representative to the Secretary of State for Panama Treaty Affairs------------------------------------------ 63
Prepared statement ---------------------------------------------- 64
Rhode, Col. Michael, Jr., Military Assistant to the Assistant Secretary of the Army (Civil Works)------------------------------------------ 71

STATEMENTS SUBMITTED FOR THE RECORD
Blumenfeld, Hon. Michael, Deputy Under Se cretary of the Army--------- 80 Murphy, Hon. John M., Chairman, Committee on Merchant Marine and Fisheries -------------------------------------------------------- 85

APPENDIXES
Appendix 1-Statements submitted for the record on H.R. 1716 -------------85
Appendix 2-Panama Canal Treaty ------------------------------------ 87
Appendix 3-Exchange of correspondence between Hon. Elizabeth, Holtzman and the Department of the Army -------------------------------- 97
Text of section 1611 of H.R. 111 as reported by the Committee on
Merchant'Marine and Fisheries ----------------------------------- 99
Appendix 4-Letter to Hon. Elizabeth Holtzman from Hume Horan, Acting
Assistant Secretary for Consular Affairs, U.S. Department of State -------100












PANAMA CANAL TREATY IMPLEMENTATION


TUESDAY, APRIL 3, 1979
U.S. HOUSE OF REPRESENTATIVES,
SUBCOM-MITTEE ON IMMIGRATIONI REFUGEES, AND
INTERNATIONAL LAW, OF THE COMMITTEE ON THE JUDICIARY, Washington, D.C.
The subcommittee met at 1:25 p.m. in room 2237 of the Rayburn House Office Building, Hon. Elizabeth Holtzman (chairwoman of the subcommittee) presiding. Present: Representatives Holtzman, Hall, Harris, Barnes, Fish, Butler, and Lungren.
Staff present: Arthur P. Endres, Jr., counsel. Ms. HOLTZMAN. Our hearing today will be on the Panama Canal Treaty implementing legislation. The committee will be considering H.R. 1716, the administration's proposal; H.R. 111; and H.R. 454.
[A copy of H.R. 1716 follows:]
(1)





2


H e1716
96THi (ONGRESS
1 ST SESSION H 1716



To implement the Panama Canal Treaty of 1977 and related agreements, and for other purposes.





IN THE HOUSE OF REPRESENTATIVES

JANUARY 31, 1979
Mr. MURPHY of New York (for himself, Mr. ZABLOCKI, Mr. RODINO, and Mr.
PRIcE) (by request) introduced the following bill; which was divided and referred for a period ending not later than April 10, 1979, as follows: Sections 101 through 105 and section 107 to the Committee on International Relations; Title II and section 106 to the Committee on Merchant Marine and Fisheries; Title III to the Committee on Post Office and Civil Service; Title IV to the Committee on the Judiciary; and Title V and section 2 concurrently to the Committees on International Relations, the Judiciary,
Merchant Marine and Fisheries, and Post Office and Civil Service.





A BILL

To implement the Panama Canal Treaty of 1977 and related agreements, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 ties of the United States of America in Congress assembled,

3 That it is the purpose of this Act to provide legislation neces4 sary to or desirable for the implementation of the Panama 5 Canal Treaty of 1977 between the United States of America










2

and the Republic of Panama and of the related agreements

2 accompanying that Treaty.

TABLE OF CONTENTS

Sec. 2. Definitions and general provisions.

TITLE I-PANAMANIAN RELATIONS AND SECURITY MATTERS

Sec. 101. United States-Panama Joint Committees.
See. 102. Authority of the Ambassador.
Sec. 103. Security legislation.
Sec. 104. Arms export control.
Sec. 105. Privileges and Immunities.
Sec. 106. Termination of Canal Zone Government; transfer of records.
See. 107. Payment to Panama; repealer.

TITLE 11-PANA-MA CANAL COMMISSION

CHAPTER 1 -ORGANIZATIONAL MATTERS

Sec. 201. Establishment; purposes; location of office.
See. 202. Payment of interest to Unite States Treasury; repeal of requirement.
Sec. 203. Expenditures and payments to Panama.
See. 204. Public service payments to Panama.
Sec. 205. Board of Directors of Commission.
Sec. 206. Quorum of Board of Directors.
Sec. 207. Administrator and Deputy.
Sec. 208. Suits against Commission.
Sec. 209. Applicability of Government Corporation Control Act.
Sec. 210. Commission property and assets; depreciation and amortization.
Sec. 211. Regulations regarding navigation, passage and pilotage.
Sec. 212. Furnishing of services; reimbursement.
See. 213. Public property and procurement; transfers and cross servicing.

CHAPTER 2-TOLLS

Sec. 230. Measurement rules; changes in rates.
Sec. 231. Setting of rates under new treaty.
Sec. 232. Bases of tolls.

CHAPTER 3-CLAIMS

Sec. 260. Measure of damages; time for filing; Board of Local Inspectors.

CHAPTER 4-SEA-LEVEL CANAL STUDY

Sec. 270. United States-Panama Joint Committee; study.





4



3

TABLE OF C('ONTENTS- Continued

TITLE 111-EMPLOYEES AND POSTAL MATTERS

('CHAPTER I -EMPLOYMENT SYSTEM

Sec 301. IRepealers and changes in Canal Zone Code. Se. 302. Definitions. Sec. 303. Panama ('anal Employment System. Sec 304. Continuation of Canal Zone Merit System. Sec. 305. Overseas recruitment and retention. Sec. 306. Transfer of Federal employees to Commission. Sec. 307. Merit and other employment requirements. Sec. 308. Regulations; examining office. Sec. 309. Compensation of Military, Naval or Public Health Service Personnel
Serving Commission.
Sec. 310. Applicability to Smithsonian Institution.

CHAPTER 2-( 'oNDITIONS OF EMPLOYMENT, PLACEMENT. AND RETIREMENT

Sec. 321. Transferred employees. Sec. 322. Placement. Sec. 323. Educational travel benefits. Sec. 324. Adjustment of compensation for loss of benefits. Sec. 325. Early retirement eligibility. Sec. 326. Early retirement computation. Sec. 327. Employees of related organizations. Sec. 328. Applicability of benefits to noncitizens. Sec. 329. Non-United States citizen retirement. Sec. 330. Technical amendments.

CHAPTER 3-POSTAL MATTERS

Sec. 341. Postal Service.

TITLE IV-COURTS AND RELATED FUNCTIONS

Sec. 401. Continuation of Code and other laws. Sec. 402. Jurisdiction during transition period. Sec. 403. Division and terms of district court. Sec. 404. Term of certain offices. Sec. 405. Residence requirements. Sec. 406. Special district judge. Sec. 407. Magistrates' courts. Sec. 408. Oath.
Sec. 409. Transition authority. Sec. 410. Special immigrants. Sec. 411. Prisons; parole; pardon.

TITLE V-MISCELLANEOUS PROVISIONS

Sec. 501. Health director; hospitals. Sec. 502. Disinterment, transportation, and reinterment of remains. See. 503. Effective date.









4
1 SEC. 2. DEFINITIONS AND GENERAL PROVISIONS.2 (a) As used in this Act, references to the Panama Cianal 3 Treaty of 1977 and related agreements mean the Panama 4 Canal Treaty between the United States of America and the 5 ]Republic of Panama signed September 7, 1977, the agree6 ments relating to and implementing that Treaty signed on the 7 same date, and any agreement concluded pursuant to the Ex8 change of Notes relating to Air Traffic Control Services

9 signed September 7, 1977.

10 (b) The Canal Zone Code is hereby redesignated the

11 Panama Canal Code.

12 (c) Except as otherwise provided in, or where in-konsist13 ent with, the provisions of this Act, the following words and 14 phrases are amended as follows wherever they appear in the 15 Panama Canal Code and other laws of the United States, 16 unless in context the changes are clearly not intended, or 17 unless such words and phrases refer to a time prior to the 18 effective date of this Act, as defined in section 503 (herein 19 called "the effective date"):

20 (1) "Panama Canal Company" to read i'Panama

21 Canal Commission".

22 (2) "Company" to read "Commission" wherever

23 the word "Company" has reference to the Panama

24 Canal Comnpany.





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5
1 (3) "Canal Zone Government" to read "Panama
2 Canal Commission".

3 (4) "Governor" or "Governor of the Canal Zone"
4 to read "Panama Canal Commission" wherever the

a reference is to the Governor of the Canal Zone.
6 (5) "President" to read "Administrator" wherever
7 the word "President" has reference to the president of

8 the Panama Canal, Company.
9 (6) "Government of the Canal Zone", or "Gov10 ernment", wherever the reference is to the Govern11 ment of the Canal Zone, to read "United States of
12 America".

13 (7) "Canal Zone waters" and "waters of the
14 Canal Zone" to read "Panama Canal waters" and
15 "waters of the Panama Canal", respectively.

16 (8) "Canal Zone Merit System" to read "Panama
17 Canal Employment System".

18 (9) "Canal Zone Board of Appeals" to read
19 "Panama Canal Board of Appeals".

20 (d) Reference to the Canal Zone in provisions of the

21 Panama Canal Code or other laws of the United States 22 which apply to transactions, occurrences, or status after 23 (treaty effective date) shall be deemed to be to areas and 24 installations in the Republic of Panama made available to the





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United States pursuant to the Panama Canal Treaty of 1977
2 and related agreements.

3 (e) The President shall, within two years after the
4 Panama Canal Treaty of 1977 enters into force, submit to

5 the Congress proposed legislation which would6 (1) amend or repeal provisions of law which in
7 their present form are applicable only during the tran8 sition period prescribed in Article XI of that Treaty,

9 and
10 (2) incorporate the remaining provisions of the
11 Panama Canal Code into the United States Code, pro12 posing any changes thereto considered advisable in

13 light of the experience as of that time under that
14 Treaty.

15 TITLE I-PANAMANIAN RELATIONS AND

16 SECURITY MATTERS
17 SEC. 101. UNITED STATES-PANAMA JOINT COMMIT18 TEEs.-(a) The President shall appoint the representatives of 19 the United States to the Joint Commission on the Environ20 ment to be established under paragraph 2 of Article VI of the 21 Panama Canal Treaty of 1977. 22 (b) The President shall designate and the Secretary of

23 State shall coordinate the participation of the representatives 24 of the United States to the Consultative Committee between 25 the United States and the Republic of Panama to be estab-





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1 lished under paragraph 7 of Article III of the Panama Canal

2 Treaty' of 1977.

3 SEC. 102. AUTHORITY OF TulE ANIBASSADOR.-(a)

4 The Ambassador to the Republic of Panama shall have full 5 responsibility for the coordination of the transfer to the Re6 public of Panama of those functions that are to be assumed 7 by the Republic of Panama pursuant to the Panama Canal

8 Treaty of 1977 and related agreements.

9 (b) The Administrator of the Panama Canal Commission

10 and personnel under his supervision shall not be subject to 11 the direction or supervision of the United States Chief of Mis12 sion in the Republic of Panama with respect to the responsi13 bilities of the Commission for the operation, management, or 14 maintenance of the Panama Canal as established in this or 15 other Acts, and the Panama Canal Treaty of 1977 and its 16 related agreements; in other respects, section 2680a of title 17 22, United States Code, shall be applicable. 18 SEC. 103. SECURITY LEGIsLATION.-(a Sections 34

19 and 35 of title 2 of the Panama Canal Code are repealed. 20 (b) Section 1 of title H of the Act of June 15, 1917 (50

21 U.S.C. 191) is amended by (1) striking the second paragraph 22 of that section, and by (2) striking the term "the Canal 23 Zone,".

24 (c Section 2 of the Act of November 15, 1941 (50

25 U.S.C. 191b) is repealed.






9


8
1 (d) Section 1 of title XI1I of the Act of June 15, 1917

2 (50 u.s.c. 195) is amended by striking the term "the Canal

3 Zone and".

4 (e) Section 1 of the Act of August 9, 1954 (50 U.S.C.

5 196) is amended by striking the term "including the Canal

6 Zone, ".

7 SEC. 104. ARMS EXPORT CONTROL.- Section 38 of

8 the Arms Export Control Act (22 U.S.C. 2778) is amended

9 by striking out subsection (d) thereof. 10 SEC. 105. PRIVILEGES AND IMMUNITIES.-The Secre11 tarv of State shall from among persons recommended by the 12 Panama Canal Commission determine, and shall maintain 13 and from time to time furnish to the Government of the Re14 public of Panama, the list of those officials and other persons 15 who shall enjoy the privileges and immunities accorded under 16 Article VIII of the Panama Canal Treaty of 1977. 17 SEC. 106. TERMINATION OF CANAL ZONE GOVERN18 MENT; TRANSFER OF RECORDS.-(a) Sections 1, 2, 3, 31, 19 32, 33, 333, and 334 of title 2 and sections 5081 through 20 5092 of title 6 of the Panama Canal Code are repealed. 21 (b) The Panama Canal Commission, other agencies or

22 departments, and United States courts in the Republic of 23 Panama are authorized to transfer any of their records, or 24 copies thereof, including records acquired from the Canal 25 Zone Government or Panama Canal Company such as vital






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9
I statistics records, to other agencies, departments, or courts of 2 the United States and, if determined by the head of the :3 agency or department concerned to be in the interest of the 4 United States, to the Government of the Republic of 0) Panama. Transfer of records or copies thereof under this sec6 tion to the Government of the Republic of Panama shall be accomplished under the coordination and with the approval of

8 the Ambassador.

9 SEC. 107. PAYMENT TO PANAMA; REPEALER.-TitC

10 I of the Act of November 27, 1973 (87 Stat. 636) is amended 11 by striking out the heading "PAYMENT TO THE REPUBLIC 12 OF PANAMA" and all that follows under that heading. 13 TITLE 11-PANAMA CANAL COMMISSION

14 CHAPTER 1-COMMISSION: FISCAL MATTERS

15 SEC. 201. (a) Section 61 of title 2 of the Panama Canal

16 Code is amended to read as follows: 17 "SEC. 61. CONTINUATION, PURPOSES, OFFICES, AND

18 RESIDENCE OF THE COMMISSION.-(a) For the purposes of 19 managing, operating, and maintaining the Panama Canal and 20 its complementary works, installations, and equipment, and 21 of conducting operations incident thereto, in accordance with 22 the Panama Canal Treaty of 1977 and related agreements, 23 the Panama Canal Commission is established as a body cor24 porate and as an agency and instrumentality of the United





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1 States, and is declared to be the successor to the Panama
2 Canal Company.

3 "(b) The principal office of the Commission shall be lo4 cated in the Republic of Panama in one of the areas made 5 available for the use of the United States under the Panama 6 Canal Treaty of 1977 and related agreements, but the Com7 mission may establish agencies or branch offices in such other 8 places as it deems necessary or appropriate in the conduct of 9 its business. Within the meaning of the laws of the United 10 States relating to jurisdiction or venue in civil actions, the 11 Commission is an inhabitant and resident of the District of 12 Columbia, and of the eastern judicial district of Louisiana.". 13 (b) Subsection (a) of section 62 of title 2 of the Panama

14 Canal Code is amended by substituting the words "Panama 15 Canal Company" for "Company" and the words "Panama 16 Canal Commission" for "Panama Canal Company". 17 SEc. 202. (a) Subsection (e) of section 62 of title 2 of

18 the Panama Canal Code is repealed. 19 (b) Subsection (f) of section 62 of title 2 of the Panama

20 Canal Code is amended by substituting the words "compute 21 its capital surplus account" for "account for its surplus",, and 22 by deleting the words "in determining the base for the inter23 est payments required by subsection (e) of this section". 24 (c) Section 70 of title 2 of the Panama Canal Code is

25 amended by deleting the words "in determining the base for





12

11

1 interest payments required by section 62(e) of this title", and 2 bv inserting the term "Including operating expenses and pay3 ments required by paragraph 5 of Article 111 and paragraphs 4 4 (a), (b), and (c) of Article XIII of the Panama Canal Treaty 5 of 1977," after the term "working capital requirements,". 6 (d) Section 72 of title 2 of the Panama Canal Code is
7 amended by deleting the words "pursuant to section 62(e) of
8 this title'".

9 SE(. 203. Subsection (g) of section 62 of title 2 of the

10 Panama Canal Code is amended to read as follows: 11 "(g) The Panama Canal Commission shall pay directly

12 from Canal operating revenues to the Republic of Panama 13 those payments required under paragraph 4 of Article XII 14 of the Panama Canal Treaty of 1977. In determining the 15 adequacy of operating revenues for the purpose of payments 16 to Panama under paragraph 4(c) of that Article, such operat17 ing revenues of a given fiscal period shall be reduced by (1) 18 all costs attributable to the operation, maintenance, and im19 provement of the Canal of that period including (i) operating 20 expenses determined in accordance with generally accepted 21 accounting principles, (i) payments to Panama under para22 graphs 4(a) and 4(b) of that Article and under paragraph 5 of 23 Article Ill of the Treaty, and (iii) amounts in excess of de24 preciation and amortization programed to fund requirements 25 for plant replacement, expansion, and improvements; (2)





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12
1 amounts allocated prior to the effective date of an increase in 2 toll rates for the purpose of matching revenues with expenses 3 during the period projected for the increase to remain in 4 effect; (3) the accumulated sum from prior years beginningg 5 with the year in-which- the Panama Canal Treaty of 1977 6 enters into force) of any excess of such cost requirements of 7 the Commission over operating revenues; and (4) working 8 capital requirements of the Commission as approved annually y its Board of Directors.".
10 SEc. 204. Section 62 of title 2 of the Panama Canal

11 Code is amended by adding a new subsection N to read as 12 follows:

13 "N Payments by the Commission to the Republic of

14 Panama for providing public services in accordance with 15 paragraph 5 of Article Elf of the Panama Canal Treaty of 16 1977 shall be treated for all purposes as an operating cost of 17 the Commission.".

18 SEc. 205. Subsection (a) of section 63 of title 2 of the

19 Panama Canal Code is amended to read as follows: 20 "(a) A Board of Directors shall manage the affairs of the

21 Panama Canal Commission. The President of the United 22 States shall appoint the members of the Board in accordance 23 with paragraph 3 of Article III of the Panania ("anal Treaty 24 of 1977, and neither this chapter nor any otiier law prevents 25 the appointment and service as a director, or as an officer of




45-988 0 79 2





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1 the Commission, of an officer or employee of the United 2 States, or of a person who is not a national of the United 3 States. Each director so appointed shall, subject to paragraph 4 3 of Article III of the Panama Canal Treaty of 1977, hold 5 office at the pleasure of the President, and, before entering 6 upon his duties, shall take an oath faithfully to discharge the

7 duties of his office.".
8 Sm. 206. Subsection (c) of section 63 of title 2 of the

9 Panama Canal Code is amended to read as follows: 10 "(c) The directors shall hold meetings as provided by

11 the bylaws of the Panama Canal Commission. A quorum for 12 the transaction of business shall consist of a majority of the 13 directors of which a majority of those present are nationals of 14 the United States.".

15 SEc. 207. Section 64 of title 2 of the Panama C"
16 Code is amended to read as follows: 17 "SEC.64. ADMINISTRATOR ANDDEPUTY.-The Presi18 dent of the United States shall appoint the Administrator and 19 Deputy Administrator of the Panama Canal Commission. 20 The Administrator shall, subject to the direction and under 21 the supervision of the Board, be the chief executive officer of 22 the Commission. The Administrator and Deputy Administra23 tor shall hold office at the pleasure of the President.".





15

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1 SEC. 208. Paragraph (3) of subsection (a) of section 65

2 of title 2 of the Panama Canal Code is amended to read as
3 follows:

4 "(3) Sue and be sued in its corporate name, except
5 that6 "(A) its amenability to suit is limited by the im7 munities provided by Article VLEI of the Panama

8 Canal Treaty of 1977, and otherwise by law;

9 "(B) salaries or other moneys owed by the Com10 mission to its employees shall not be subject to attach11 ment, garnishment, or similar process, except as other12 wise expressly provided by the laws of the United
13 States; and

14 "(C) it is exempt from any liability for prejudg15 ment interest.".

16 SEC. 209. The opening clause of subsection (a) of sec17 tion 66 of title 2 of the Panama Canal Code is amended to 18 read as follows:

19 "(a) Subject to the Government Corporation Control
20 Act (31 U.S.C. 841 et seq.), and to the Panama Canal 21 Treaty of 1977 and related agreements, the Panama Canal 22 Commission may:".
23 SEC. 210. Sections 67 and 73 of title 2 of the Panama

24 Canal Code are repealed. Section 68 of that title is amended 25 to read as follows:





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1 ~ "SEC. 68. ASSETS AND LIABILITIES.-(a) Property 2 and other assets of the Panama Canal Company and of the 3 Canal Zone Government which are not transferred to other 4 United States Government agencies or to the Republic of 5 Panama, or otherwise disposed of, shall, notwithstanding see6 tion 5 of the Act of July 16, 1914, as amended (31 U.S.C. 7 638(a)), be the property and assets of the Panama Canal 8 Commission from and after the effective date, and except as 9 otherwise provided by law, the Commission shall assume the 10 liabilities of the Panama Canal Company and Canal Zone 11 Government then outstanding. 12 "(b) The Commission may depreciate the Panama

13 Canal, its complementary works, installations, and equip14 ment, and all other property and assets of the Commission, 15 and may amortize over the life of the Panama Canal Treaty 16 of 1977 the right to use certain assets such as housing made 17 available to the United States under that Treaty and related 18 agreements. The value of these use rights, as determined by 19 the Commission, shall be established as an asset on the books 20 of the Commission and amortized over the period of use. 21 "(c) The assets and liabilities referred to in this section

22 shall be deemed to have been accepted and assumed by the 23 Commission without the necessity of any act on the part of 24 the Commission except as otherwise stipulated by section 62 25 of this title.".





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16
1 SEC. 211. (a) The introductory phrase to section 1331

2 of title 2 of the Panama Canal Code is amended by striking 3 out the word "'President" and by inserting in lieu thereof the

4 word "Commission".

5 (b) Paragraph (1) of section 1331 of title 2 of the

6 Panama Canal Code is amended by striking out the words 7 "harbors and other waters of the Canal Zone" and by insert8 ing in lieu thereof the words "waters of the Panama Canal 9and areas adjacent thereto including the ports of Balboa and 10 Cristobal".

11 (c) Paragraph (4) of section 1331 of title 2 of the

12 Panama, Canal Code is amended by striking out the words 13 "waters of the Canal Zone" and by inserting in lieu thereof 14 the words "waters of the Panama Canal and areas adjacent 15 thereto including the ports of Balboa and Cristobal". 16 SEC. 2 12. FUNDS AND AcCOUNTS.-(a) Section 231 of

17 title 2 of the Panama Canal Code is repealed. 18 (b) Section 232 of title 2 of the Panama Canal Code is

19 amended to read as follows:

20 "SEC. 2 32. FURNISHING OF SERVICES; REIMBURSE21 MLE:qTS.-(a) The Department of Defense shall reimburse the 22 Panama Canal Commission for amounts expended by the 23 Commission in maintaining defense facilities in standby con24 dition for the Department of Defense.





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I "(h) Su tch agency ais the President miay designate is au42 thorizedi to provide educational and health care services to 3 persons eligible to receive such services under the Panama 4 Canal Treaty~ of 1977 and related agreements. Notwithstand5) ing any other law, the appropriations of such agency are 6 made available for conducting educational and health care 7 activities, including kindergartens and college, formerly car8 ried out by the Canal Zone Government, and for providing

9 the services related thereto.

10( "(c) Amounts so expended for furnishing servces to per11 sons eligible to receive them under the Panama Canal Treaty 12 of 1977 and related agreements, less amounts payable by 13 such persons, shall be fully reimbursable to the agency fur14 nishing the services, except to the extent that such expendi15 tures are the responsibility of that agency. The appropri16 ations or funds of the Panama Canal Commission are made 17 available for such reimbursements on behalf of employees of 18 the Commission and other persons authorized to receive such 19 services and eligible under the Panama Canal Treatyv and 2() related agreements. The appropriations or funds of other 21 agencies conducting operations in the Republic of Panama, 22 including the Smithsonian Institution, are made available for 23 reimbursements on behalf of employees of such agencies and 24 their dependents.





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1 "(d) The appropriations or funds of United States agen2 cies conducting operations in the Republic of Panama are 3 made available to defray the cost of (i) health care services to 4 elderly or disabled persons who were eligible to receive such 5 services prior to the effective date, less amounts payable by 6 such persons, and (ii) educational services provided by 7 schools in the Republic of Panama which are not operated by 8 the, United States to persons who were receiving such serv9 ices at the expense of the Canal Zone Government prior to 10 the effective date.".

11 (c) Section 233 of title 2 of the Panama Canal Code is

12 amended by striking the term "Canal Zone Government or 13 the Panama Canal Company" and by.inserting in lieu thereof 14 the term "Panama Canal Commission". 15 (d) Section 234 of title 2 of the Panama Canal Code is
16 amended by striking the term "Canal Zone" and by inserting 17 in lieu thereof the term "Panama Canal Commission". 18 (e) Section 235 of title 2 of the Panama Canal Code is

19 amended by striking the term "Canal Zone Government and 20 the Panama Canal Company" and by inserting in lieu thereof 21 the term "Panama Canal Commission". 22 SEC. 213. 11UBLIC PROPERTY AND PROCUREMENT.

23 (a) Section 371 of title 2 of the Panama Canal Code is re24 pealed.






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1 (h) Section 372 of title 2 of the Panama Canal Code is

2 amended to read as follows:

3 "SEC. 372. TRANSFERS AND CROSS-SERVICING BE4 TWEEN AGENCIE.-(a) In the interest of economy and 5 maximum efficiency in the utilization of Government proper6 tv and facilities, there are authorized to be transferred, not7 withstanding section 5 of the Act of July 16, 1914, as 8 amended (31 U.S.C. 638(a)), between departments and agen9 cies, with or without exchange of funds, all or so much of the 10 facilities, buildings, structures, improvements, stock, and 11 equipment of their activities located in the Republic of 12 Panama as may be mutually agreed upon by the departments 13 and agencies involved and approved by the President of the 14 United States or his designee. With respect to transfers with15 out exchange of funds, transfers to or from the Panama 16 Canal Commission are subject to section 62 of this title, as 17 amended.

18 "(b) The Panama Canal Commission and other agencies

19 of the United States may enter into cross-servicing agree20 ments for the use of facilities, furnishing of services, or per21 formance of functions.

22 "(c) The provisions of sabsections ;. {h) above shall

23 be applicabl< to the Smithsonian Insti i





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1 CHAPTER 2-TOLLS

2 SEC. 230. Section 411 of title 2 of the Panama Canal

3 Code is amended to read as follows:

4 "SEC. 411. PRESCRIPTION OF MEASUREMENT RULES

5 AND TOLLS.-(a) The- Panama, Canal Commission may pre6 scribe, and from time to time change:

7 "(1) the rules for the measurement of vessels for

8 the Panama Canal; and

9 "(2) subject to section 412 of this title, the tolls

10 that shall be levied for the use of the Canal.

11 "(b) The Commission shall give three months' notice, by

12 publication in the Federal Register, of proposed changes in 13 basic rules of measurement or in rates of tolls, during which 14 period a public hearing shall be conducted. Changes in basic 15 rules of measurement and changes in rates of tolls shall be 16 subject to and shall take effect upon the approval of the 17 President of the United States, whose action in such matters 18 shall be final.".

19 SEc. 231. In order to insure that the rates of tolls in

20 effect on the effective date are adequate to meet the require21 ments of section 412 of title 2 of the Panama Canal Code, as 22 amended by section 232 of this Act, the Panama Canal Comn23 pany is authorized, in advance of that date, to change the 24 rates, effective on the effective date, such change to be sub25 ject to the approval of the President whose action in the








21
1 matter shall be final. If and to the extent that time permits, 29 the Company shall give three months' notice, by publication 3 in the Federal Register, of such proposed changes in rates of 4 tolls, during which period a public hearing shall be

5 conducted.

6 SEc. 232. BA SES OF TOLLs.-(a) Subsection (b of sec7 tion 412 of title 2 of the Panama Canal Code is amended to

8 read as follows,:

9 "Nb Tolls shall be prescribed at rates calculated to

10 cover as nearly as practicable all anticipated costs of main11 taining and operating the Panama Canal, together with the 12 facilities and appurtenances related thereto, including depre13 ciation of assets, amortization of use rights, and the pay14 ments to Panama pursuant to paragraph 5 of Article III and 15 paragraphs 4(a) and 4(b) of Article XII of the Panama 16 Canal Treaty of 1977. In determining the rates of tolls, there 17 may also be taken into account unrecovered past costs, fund18 ing required to establish or maintain a capital reserve ac19 count programed to fund requirements for plant replacement, 20 expansion, and improvements, and the necessity of establish21 ing reserves for the purpose of matching revenues with ex22 penses during the period projected for a given toll rate to 23 remain in effect.".

24 Nb Subsection (c of section 412 of title 2 of the Panama

25 Canal Code is amended to read as follows:





23


22
1 "(c) Vessels operated by the United States, including

2 vessels of war and auxiliary vessels, and ocean-going training 3 ships owned by the United States and operated by State nau4 tical schools, shall pay tolls.".

5 (c) Subsection (d) of section 412 of title 2 of the Panama
6 Canal Code is amended by deleting* the words "of articles 7 XVIII and XIX of the convention between the United States 8 and Panama concluded on November 18, 1903, and", by in9 serting a comma in place of the period at the end of the 10 subsection, and by adding thereafter "and of Articles 11, 111, 11 and VI of the Treaty Concerning the Permanent Neutrality 12 and Operation of the Panama Canal, between the United 13 States of America and the Republic of Panama, signed Sep14 tember 7, 1977.".

15 CHAPTER 3-CLAIMS

16 SEc. 260. Chapter 11 of title 2 of the Panama Canal

17 Code is amended as follows:

18 (a) The title of the chapter is amended to read "Claims

19 Arising from Operation of Canal." 20 (b) Section 271 of title 2 of the Panama Canal Code is

21 repealed.

22 (c) The headings of subehapters I and H are deleted.

23 (d) Section 291 of title 2 of the Panama Canal Code is

24 amended as follows:





2 4



1 (1) The period at the end of the first sentence is
4) changed to a cornma, and the following language is

3 added: "unless it is established that the injury was not
4 proximately caused by the negligence or fault of any of
5 its officers or employees acting within the scope of his
6 employment and in the line of his duties in connection
7 with the operation of the Canal.".
8 (2) In the fourth sentence, the words "the side"

9 are amended to read "any portion of the hull".
10 (e) Section 293 of title 2 of the Panama Canal Code is
11 amended to read as follows:
12 "SEC. 293.MEASURE OFDAMAGES.-(a) In determin13 ing the amount of the award of damages for injuries to a 14 vessel for which the Panama Canal Commission is deter15 mined to be liable, there may be included 16 "(1) actual or estimated cost of repairs;

17 "(2) charter hire actually lost by the owners, or

18 charter hire actually paid, depending upon the terms of
19 the charter party, for only the time the vessel is actu20 ally undergoing repairs, on drydock or otherwise;
21 "(3) maintenance of the vessel and wages of the

22 crew, if they are found to be actual additional expenses

23 or losses incurred outside of the charter hire, for only
24 the time the vessel is actually undergoing repairs, on

25 drydock or otherwise; and





25


24
1 "(4) except as prohibited by subsection (b) of this

2 section, or by, any other provision of law, other ex3 penses which are definitely and accurately shown to

4 have been incurred necessarily and by reason of the

5 accident or injuries.

6 "(b) Agent's fees or commissions, general average ex7 penises, attorney's fees, bank commissions, port charges or 8 other incidental expenses of similar character, or any items 9 which are indefinite, indeterminable, speculative, or conjec10 tural shall not be allowed.

11 "(c) The Commission shall be furnished such vouchers,

12 receipts, or other evidence as may be necessary in support of 13 any item of a claim. If a vessel is not operated under charter 14 but by the owner directly, evidence shall be secured if availa15 ble as to the sum for which vessels of the same size and class 16 can be chartered in the market. If the charter value cannot 17 be determined, the value of the use of the vessel to its owners 18 in the business in which it was engaged at the time of the 19 injuries shall be used as a basis for estimating the damages 20 for the vessel's detention; and the books of the owners show21 ing the vessel's earnings about the time of the accident or 22 injuries shall be considered as evidence of probable earnings 23 during the time of detention. If the books are unavailable, 24 such other evidence shan be furnished as may be necessary.".






26


25
1 (f) Section 294 of title 2 of the Panama Canal Code is

2 amended by deleting the word "or" in parag-raph (5), by re:3 numbhering the present paragraph (6)) as parag-raph (7), and by

4 inserting a new paragraph (6) to read as follows:

5 "(6) time necessary for investigation of marine ace6 cidents; or"

7 (g) Section 296 of title 2 of the Panama Canal Code is

8 amended by deleting the words "United States District Court 9 for the District of the Canal Zone" in the first sentence and 10 inserting in lieu thereof the words "United States District 11 Court for the Eastern District of Louisiana" 12 (h) The present section 297 of title 2 of the Panama

13 Canal Code is designated as subsection (a), and a new sub14 section (b) is added to read as follows: 15 "(b) Lack of knowledge on the part of the master, offi16 cers, crew, or passengers that an accident giving rise to a 17 claim under this chapter has occurred does not excuse non18 compliance with the requirements of this section." 19 (i) A new section 298 of title 2 of the Panama Canal

20 Code is added, to read as follows: 21 "SEC. 298. TIME FOR PRESENTING CLAIM AND COM22 MENCING ACTION.-A claim against the Commission under 23 this chapter shall be forever barred unless it is presented in 24 writing to that agency within two years after such claim ac25 crues or unless action is begun within one year after the date





27


26
1 of mailing of notice of final decision on the claim by the Com

2 mission.".

3 A new section 299 of title 2 of the Panama Canal
4 Code is added, to read as follows:

5 "SEC. 299. BOARD OF LOCAL INSPECTORS.-(a)
6 There is established a Board of Local Inspectors of the 7 Panama Canal Commission which shall perform, in accord8 ance with regulations prescribed by the Commission9 "(1) the investigations called for by section 297 of
10 this chapter; and

11 "M such other duties in matters of a marine

12 character as it may be assigned by the Commission.
13 "N The Commission shall, by regulation, designate the

14 members of the Board and establish procedures by which the 15 Board carries out its functions. 16 "(c) In conducting the investigations provided for by
17 subsection (a) of this section, members of the Board may 18 summon witnesses, administer oaths, and require the produc19 tion of books and papers necessary thereto.". 20 CHAPTER 4-SEA-LEVEL CANAL STUDY

21 SEC. 270. (a) The President shall appoint the repre22 sentatives of the United States to any joint committee or 23 body with the Republic of Panama to study the possibility of 24 a sea-level canal in the Republic of Panama pursuant to Arti25 cle X111 of the Panama Canal Treaty of 1977.






2S


27
1 (b) Upon the completion of any Joint study between the

2 United States and the Republic of Panama concerning the 3 feasibility of a sea-lev~el canal in the Republic of Panama pur4 suant to parag-raph 1 of Article X1I of the Panama Canal 5 Treaty of 1977, the text of the study shall be transmitted by 6 the President to the President of the Senate and to the

7 Speaker of the House of Representatives.

8 (c) No construction of a sea-level canal by the United

9 States in the Republic of Panama shall be undertaken except 10 with express congressional authorization after submission of 11 the study by the President as provided in subsection (b). 12 TITLE EI-EMPLOYEES AND POSTAL MATTERS 13 CHAPTER 1-EMPLOYMENT SYSTEM

14 SEC. 301. (a) Sections 101, 102, 122, 123, 147, and

15 154 of title 2 of the Panama Canal Code are repealed. 16 (b) Section 103 of title 2 of the Panama Canal Code is

17 amended by striking the terms "Canal Zone Government, 18 Panama Canal Company" and inserting in lieu thereof the 19 term "Panama Canal Commission", and by redesignating 20 that section as section 122 of that title and code. 21 SEC. 302. Section 141 of title 2 of the Panama Canal

22 Code is amended as follows: 23 (a) The definition of the word "department" is amended

24 to read as follows: "'department' means (i) the Panama 25 Canal Commission, and (ii) an executive agency (Within the






29


28

1 meaning of section 105 of title 5 of the United States Code) 2 which makes an election under section 142(b) of this chap3 ter;.

4 Nb The definition of the word "position"~ is amended to 5 read as follows: "'position' means those duties and responsi16 bilities of a civilian nature under the jurisdiction of a depart7 ment which are performed in the ]Republic of Panama."

8 SEC. 303. Section 142 of title 2 of the Panama Canal

9 Code is amended by redesignating subsection (b) thereof as 10 subsection (d), and by striking the caption and subsection (a) 11 thereof and inserting in lieu thereof the following: 12 "SEC. 142. PANAMA CANAL EMPLOYMENT

13 SYSTEM.-(a) The Panama Canal Commission shall conduct 14 its wage and employment practices in accordance with a 15 Panama Canal Employment System which shall be estab16 lished in accordance with17 "(1 the principles established in the Panama 18 Canal Treaty of 1977 and related agreements, and

19 with the provisions of this chapter and other applicable

20 law; and

21 "(2) regulations promulgated by, or under the au22 thority of, the President in accordance with this chap23 ter and taking into account any recommendation of the

24 Panama Canal Commission.






4f5-.988 0 -79 -3





30

')9

1 "(b) The head of an executive agency other than the
2 Panarna Canal Commission may elect to have the Panama 3 Canal Eimployment Systern made applicable in whole or in 4 part to personnel of his agency in the Republic of Panama. 5 "(c) The provisions of chapter 71 of title 5 of the United
6 States Code shall not apply to the Panama Canal Commis7 sion or to its personnel. In lieu thereof, the President shall 8 establish a form of collective bargaining, applicable to the 9 Commission's employees; into which is incorporated the sub10 stance of sections 7102, 7106, 7116, 7120, and 7131. The 11 form of collective bargaining so established shall contain such 12 other necessary provisions, and shall be administered, so as, 13 to provide the Commission's employees with the right to bax14 gain collectively under the same conditions and with respect 15 to the same subject matter that obtains where that right is 16 exercised generally in the Federal service within the conti17 nental United States.".
18 SEC. 304. Notwithstanding other provisions of this

19 chapter, the provisions of subchapter III of chapter 7 of title 20 2 of the Panama Canal Code establishing the Canal Zone 21 Merit System, and the administrative regulations promulgat22 ed thereunder, shall continue in effect until such time as the 23 Panama Canal Employment System has been established 24 pursuant to section 303 of this Act.






31


30
1 SEC. 305. Section 144 of title 2 of the Panama Canal

2 Code is amended by deleting subsection (d) thereof. Section

3 146 is amended to read as follows:

4 "SEC. 146. RECRUITMENT AND ]RETENTION REMU5 NEBRATION.-(a) In addition to basic compensation, addition6 al remuneration in such amounts as the head of the depart7 ment concerned determines, may be paid as overseas recruit8 ment and retention differentials to the following categories of 9 individuals if, in the judgment of the head of the department 10 concerned, the recruitment and retention of such employees 11 is essential12 "(1) persons employed by the Panama Canal

13 Company, Canal Zone Government, or a department

14 in the Canal Zone prior to the effective date;

15 "(2) persons thereafter recruited outside of

16 Panama for a position in the Republic of Panama; and

17 "(3) medical doctors employed by the Department

18 of Defense or Panama Canal Commission.

19 "(b) Employees who fall into more than one of the three

20 categories described in subsection (a) of this section may 21 qualify for additional remuneration under only one of those 22 categories.

23 "(c) Additional remuneration prescribed under this sec24 tion may not exceed 25 percent of the rate of basic compen25 sation for the same or similar work performed in the conti-





32


31
1 nvintal Uited States by employees of the Governmenit of the 2United States..

3 SE(,. 306. (a) Title 2 of the Panama Canal Code is

4 amended by adding a new section 147 to read as follows: 5 'SEC. 147. TRANSFER OF FEDERAL EMPLOYEES TO

6 PANAIMA CANAL COIMISSION.-The head of aniy Federal 7 agency, including the United States Postal Service, is au8 thorized to enter into agreements for the transfer or detail of 9 that agency's employees, serving under permanent appoint10( ment, to the Panama Canal Commission. Under regulations 11 prescribed by the Office of Personnel Management, any em12 ployee so transferred or detailed shall, upon completion of his 13 tour of duty with the Commission, he entitled to reemploy14 ment with the agency from which he was transferred or de15 tailed without loss of pay, seniority, or other rights or bene16 fits to which he would have been entitled had he remained on 17 the rolls of that agency."

18 (b) Section 148 of title 2 of the Panama Canal Code is

19 amended by20 (1) changing the parenthetical citation "(5 U.S.C.,

21 sec. 2091 et seq.)" in paragraph (1) to read "(5 U.S.C.

22 H8701 et seq.)";

23 (2) changing the parenthetical citation "(5 U.S.C.,

24 sec. 751 et seq.)" in paragraph (2) to read "(5 U.S.C.

25 H8101 et seq.)";






33


32c

1(3) changing the parenthetical citation "(5 U.S.C., 2 sec. 2251 et seq.)" in paragraph (4) to read "1(5 U.S.C.

3 8331 et seq.)"; and

4 (4) revising the unindented portion of the section

5 following paragraph (6) to read as follows:

6 "the basic compensation of each employee shall include the 7 rate of basic compensation established for his position, and, 8 where appropriate, the amount of overseas recruitment and 9 retention differentials, determined in the manner respectively 10 provided by sections 144 and 146 of this title.". 11 SEC. 307. Section 149 of title 2 of the Panama Canal

12 Code is amended to read as follows:
13 "SEC. MERIT AND OTHER EMPLOYMENT RE14 QUIREMENTS.-(a) Subject to this subchapter, the President 15 may, from time to time and taking into account any recoin16 mendation of the Panama Canal Commission, amend or 17 modify the provisions of the Panama Canal Employment 18 System, including provisions relating to selection for appoint19 ment, reappointment, reinstatement, reemployment, and re20 tention with respect to positions, employees, and individuals 21 under consideration for appointment to positions, established 22 by regulations under section 142 of this chapter. 23 "(b) The Panama Canal Employment Sy~stem shall24 "(1) subject to and as limited by the Panama

25 Canal Treaty of 1977 and related agreements, be





:34


:33
1 based on the merit of the employee or individual and

2 upon his qualifications and fitness to hold the position

:3 concerned;

4 "(2) conform generally to policies, principles, and

5 standards for the competitive civil service of the Gov6 erment of the United States; and

7 "(3) include provision for appropriate interchange,

8 between the Panama Canal Employment System and

9 the competitive civil service of the Government of the

10 United States, of citizens of the United States em1 1 ployed by the Government of the United States."

12 SEC. 308. Section 155 of title 2 of the Panama Canal

13 Code is amended by redesignating subsection (b) thereof as 14 subsection (c), and by inserting in lieu of subsection (a) there15 of the following:

16 "(a) The President shall issue regulations necessary and

17 appropriate to carry out the provisions and accomplish the 18 purposes of this subchapter and, in the event of any election 19 under section 142(b), coordinate the policies and activities 20 under this subchapter of the departments involved. 21 "(b) In order to assist in carrying out his coordination

22 responsibility under subsection (a) and in implementing the 23 provisions of the Panama Canal Treaty of 1977 and related 24 agreements relating to recruitment, examination, determina25 tion of qualification standards and similar matters, the Presi-






35


34
1 dent may establish, as the successor to the Canal Zone Cen2 tral Examining Office, an office which shall be an entity

3 within the Panama Canal Commission."

4 SEC. 309. Subsection (a) of section 201 of title 2 of the

5 Panama Canal Code is amended by deleting the words "Gov6 ernor of the Canal Zone and President of the Panama Canal 7 Company, or as Lieutenant Governor of the Canal Zone and 8 Vice President of the Panama Canal Company," and insert9 ing in lieu thereof the words "Administrator or Deputy Ad10 ministrator of the Panama Canal Commission.". 11 SEC. 310. The provisions of this chapter shall be appli12 cable to Federal employees of the Smithsonian Institution. 13 CHAPTER 2-CONDITIONS OF EMPLOYMENT,

14 PLACEMENT, AND RETIREMENT

15 SEC. 321. Title 2 of the Panama Canal Code is amend16 ed by adding a new section 202 to read as follows: 17 "SEC. 202. TRANSFERRED EMPLOYEES.-With re18 spect to employees of the Panama Canal Company or Canal 19 Zone Government who are transferred to employment with 20 the Panama Canal Commission or other United States Gov21 ernment agencies in the Republic of Panama, the following 22 terms and conditions of employment shall be generally no 23 less favorable, from and after the entry into force of the 24 Panama Canal Treaty of 1977, than the terms and conditions





1 6


35
1 of eiliploYinent with the Panama Canal Company and Canal
2 Zone Government immediately prior to that date3 it Wage rates; tropical differential; premium pay
4 and night differential; reinstatement and restoration
5 rights; injury and death compensation benefits; leave
6 and travel, except as modified to provide equity with

7 other employees within the agency to which the em8 ployee is transferred; transportation and repatriation
9 benefits; group health and life insurance; reduction-in10 force rights; an employee grievance system, and the

11 right to appeal adverse and disciplinary actions as well
12 as position classification actions; veteran's preference

13 eligibility; holidays; saved pay provisions; and sever14 ance pay benefits.".

15 SEC. 322. Title 2 of the Panama Canal Code is amend16 ed by adding a new section 203 to read as follows: 17 "SEC. 203. PLACEMENT.-(a) A United States citizen
18 who, immediately preceding the effective date of exchange of 19 instruments of ratification of the Panama Canal Treaty of 20 1977, was an employee of the Panama Canal Company or 21 Canal Zone Government, who separates or is scheduled to 22 separate on that date or thereafter in accordance with the 23 program established under subsection (c) of this section for 24 any reason other than misconduct or delinquency, and who is 25 not placed in another appropriate position with the United











1 States Government in the Republic of Panama shall, upon 2 the employee 's request, be accorded appropriate placement 3 assistance to vacancies with the United States Government

4 in the United States.

5 "(b) A United States citizen who, immediately preced6 ing the effective date of exchange of instrument's of ratification of the Panama Canal Treaty of 1977, was an employee 8 of an agency of the United States Government, or a Federal 9 employee of the Smithsonian Institution, in the Canal Zone 10 other than the Panama Canal Company or Canal Zone Gov11 erment, whose position is eliminated as the result of imple12 menting the Panama Canal Treaty of 1977 or related agree13 ments, and who is not placed in another appropriate position 14 with the United States Government in the Republic of 15 Panama shall, upon the employee's request, be accorded the 16 placement assistance provided for in subsection (a). 17 "(c) The Office of Personnel Management shall develop

18 and administer a Federal Government-w-ide placement pro19 gram for all eligible employees who request placement assist20 ance under this section.".

21 SEC. 323. Title 2 of the Panama Canal Code is amend22 ed by adding a new section 204 to read as follows: 23 "SEC. 204. EDUCATIONAL TRAVEL BENEFJTS.-De24 pendents of United States citizen employees of the Panama 25 Canal Commission who are eligible for educational travel





138


37"
1 benefits under regulations issued by the Commission shall be 2. entitled to one round trip per year for undergraduate studies 3 in the United States until they reach their 23rd birthday.". 4 SEc. 324. ADJUSTMENT OF COMPENSATION.-United

5 States citizen emp loyees of the Panama Canal Commission 6 shall be paid an allowance to offset the increased cost of 7 living that may result from the withdrawal of the eligibility of 8 such employees and their dependents to use military postal 9 services, sales stores and exchanges five years after the date 10 of entry into force of the Panama Canal Treaty of 1977. The 11 amount of the additional compensation shall be determined by 12 the Panamal Canal Commission. 13 SEC. 325. EARLY RETIREMENT ELIGI]BILITY.-Sec14 tion 8336 of title 5 of the United States Code is amended15 (1) by redesignating subsection (c) as subsection

16 (c)(1) and adding a new paragraph (2) to read as fol17 lows:

18 "(2) A law enforcement officer or firefighter employed

19 by the Panama Canal Company or the Canal Zone Govern20 ment immediately prior to the effective date of exchange of 21 instruments of ratification or entry into force of the Panama 22 Canal Treaty of 1977, who is separated from the service 23 prior to January 1, 2000, and, upon separation, meets the 24 age and service requirements in paragraph (1), or who is sep-





'3 9


38
1 arated within 2 years prior to meeting the age and service

2 requirements in paragraph (1) is entitled to an annuity.",
3 (2) by redesignating subsection (h) as subsection

4 (k) and inserting new subsections (h), (i), and (j) to read

5 as follows:

6 "(h) An employee of the Panama Canal Commission or

7 of an Executive agency conducting operations in the Canal 8 Zone or Republic of Panama, who is separated from the serv9 ice prior to January 1, 2 00010 "(1 involuntarily, as a result of the implementa1.1 tion of the Panama Canal Treaty of 1977 or related

12 agreements, except by removal for cause on charges of

13 misconduct or delinquency, after completing 20 years

14 of service;

15 "(2) voluntarily, after completing 25 years of

16 service or after becoming age 50 and completing 20

17 years of service; or

18 "(3) involuntarily, as a result of the implementa19 tion of the Panama Canal Treaty of 1977 or related

20 agreements, except by removal for cause on charges of

21 misconduct or delinquency, or voluntarily within 2

22 years prior to meeting the age and/or service require23 ments in paragraph (2) is entitled to an annuity if he24 "(A) was employed by the Canal Zone Gov25 emiunent or the Panama Canal Company immedi-





40


:39

1 ately prior to the effective late of exchange of intrunments of ratification or entry into force of the

3 Panama Canal Treaty of 19771; and

4 "(B) has been continuously employed by the

0 Panama Canal Commission or by an Executive

6 agencir conducting operations in the Canal Zone

7 or the Republic of Panama since the effective date

8 of exchange of instruments of ratification of the

9 P~anama Canal Treaty of 1977 or its entry into

10 force .

11 "(i) An employee of the Panama Canal Commission or

12 of an Executive agency conducting operations in the Canal 13 Zone or Republic of Panama, who is separated from the serv14 ice as a result of the implementation of the Panama Canal 15 Treaty of 1977 or related agreements, prior to January 1, 16 2000, involuntarily, except by removal for cause on charges 17 of misconduct or delinquency18 "(1) after completing 20 years of service; or

19 "(2) within 2 years prior to meeting the age and/

20 or service requirements in paragraph (2) of subsection

21 (h) of this section is entitled to an annuity if he22 "(A) was employed in the Canal Zone by an

23 Executive agency other than the Panama Canal

24 Company or the Canal Zone Government immedi25 ately prior to the effective date of exchange of in-






4t1


40
1 struments of ratification or entry into force of the

2 Panama Canal Treaty of 1977; and

3 "(B) has been continuously e mployed by the

4 Panama Canal Commission or an Executive

5 agency conducting operations in the Canal Zone

6 or the Republic of Panama since the effective date

7 of exchange of instruments of ratification of the

8 Panama Canal Treaty of 1977 or its entry into

9 force.

10 "()For the purpose of subsections (h) and (i) of this

11 section, Federal employment by or under the United States 12 District Court for the District of the Canal Zone and by the 13 Smithsonian Institution shall be treated as employment by an 14 'Executive agency'."

15 SEc. 326. EARLY RETIREMENT COMPUTATION.-Sec16 tion 8339 of title 5 of the U~nited States Code is amended17 (1) by inserting in subsection (f0, immediately after

18 "subsections (a)-(e)", the following: "and (n)";

19 (2) by inserting in subsection (i), immediately after

20 subsectionss (a)-(h)", the following: "and (n)";

21 (3) by inserting in subsections (j) and (k)(1), imme22 diately after "subsections (a)-(i)" each time it appears,

23 the following: "and (n)";

24 (4) by inserting in subsection (1), immediately after

25 "subsections (a)-(k)", the following: "and (n)";





42


41
1 (5) by inserting in subsection (m), immediately
2 after "subsections (a)-(e)", the following: "and (n)";

3 and
4 (6) by adding at the end thereof new subsections

5 (n), (o), and (p) to read as follows:
6 "(n) The annuity of in employee retiring under this sub7 chapter who was employed by the Panama Canal Company 8 or Canal Zone Government immediately prior to the entry 9 into force of the Panama Canal Treaty of 1977, who conti10 ues in employment with the Panama Canal Commission, or 11 with another Executive agency or the Smithsonian Institu12 tion, in the Republic of Panama is computed with respect to 13 the period of that service performed on a continuous basis 14 after the entry into force of the Panama Canal Treaty of 15 1977 by multiplying16 "(A) 2 1/2 percent of the employee's average pay

17 by so much of such service as does not exceed 20
18 years; plus

19 "(B) 2 percent of the employee's average pay
20 multiplied by so much of such service as exceeds 20

21 years.
22 "(o) The annuity computed under subsection (n) of this
23 section for an employee who was employed as a law enforce24 ment officer or firefighter shall be increased by $8 for each 25 full month of such service in the Republic of Panama after





43


42
1 the entry into force of the Panama Canal Treaty of 1977. 2 This increase in annuity shall not be paid with respect to 3 service performed after completion of 20 years as a law en4 enforcement officer or firefighter.

5 "(p) The annuity computed under this subehapter for an

6 employee who was employed as a law enforcement officer or 7 firefighter by the Panama Canal Company or the Canal Zone 8 Government immediately prior to the effective date of ex9 change of instruments of ratification or entry into force' of the 10 Panama Canal Treaty of 1977, who does not qualify for re11 tirement under section 8336(c) of this title, shall be increased 12 by $12 for each full month of such service prior to the entry 13 into force of the Panama Canal Treaty of 1977. This increase 14 in annuity shall not be paid with respect to service performed 15 after completion of 20 years as a law enforcement officer or 16 firefighter.

17 SEC. 327. LAw ENFORCEMENT, CANAL ZONE CIVIL18 IAN PERSONNEL POLICY COORDINATING BOARD, ANDRE19 LATED EMPLOYEEs.-(a) For the purposes of sections 202, 20 203, and 204 of title 2 of the Panama Canal Code, as amend21 ed by sections 321, 322, and 323 of this Act, and sections 22 325 and 326 of this Act, the United States Attorney for the 23 District of the Canal Zone and the Assistant United States 24 Attorneys and their clerical assistants, and the United States 25 Marshal for the District of the Canal Zone and his deputies





44

43

1 and clerical assistants, shall be treated the same as employ2 ees of the Panamia ('anal Commissiol.

3 (b) For the purposes of this Act, the Executive Director

4 of the (anal Zone C(ivilian Personnel Policyv Coordinating 5 Board, thle Manager, Central Examining Office, and their 6 staffs shall be considered employees of the Panama Canal 7 Company for service prior to the entry into force of the 8 Panama Canal Treaty of 1977 and as employees of the 9 Panama Canal Commission for service on or after that date. 10 SE(. 328. (a) Chapters 81 (Compensation for Work In11 juries), 83 (Retirement), 87 (Life Insurance), and 89 (Health 12 Insurance) of title 5 of the United States Code are inapplica13 ble to persons who are not citizens of the United States, who 14 are hired by the Panama Canal Commission after the effec15 tive date and who are covered by the Social Security System 16 of the Republic of Panama pursuant to the Panama Canal 17 Treaty of 1977 and related agreements. 18 (b) In section 8701 of title 5 of the United States Code,

19 the definition of "employee" in subsection (a) is amended by 20 revising paragraph (B) to read as follows: 21 "(B) an employee who is not a citizen or national

22 of the United States and whose permanent duty station

23 is outside the United States, unless such person was an

24 employee for the purpose of this chapter on the day

25 before the effective date by virtue of service with a





45


44
Federal agency in the Canal Zone, or the Smithsnian

2 Institution."

3 (c) In section 8901 of title 5 of the 17nited States ("ode,

4 the definition of employee in subsection (i) is arnided by

5 revising paragraph (ii) to read as follows:

6 "(ii) an employee who is not a citizen or wrtional

7 of the United States and whose permanent duty t tin

8 is outside the United States unless such person was an

9 employee for the purpose of this chapter on the day

10 before the effective date by virtue of service with a
11 Federal agency in the Canal Zone, or the Smithsonian

12 Institution. '

13 SEC. 329. NON-UNITED STATES CITIZEN RETIHE14 MENT UNDER SPECIAL TREATY PROVISIONS.-(e)l Under 15 such regulations as the President may prescribe, there shall 16 be paid to the Social Security System of the Republic of 17 Panama, out of funds deposited in the Treasury of the Uinited 18 States to the credit of the Civil Service Retirememt lind 19 under section 8334(a)(2) of title 5 of the United State od, 20 such sums of money as may be necessary to aid in the pur21 chase of a retirement equity in that System for each person 22 who is separated from employment with the Panama Canal 23 Company, the Canal Zone Government, or the Panama 24 Canal Commission, as the result of the implementation o" the 25 Panama Canal Treaty of 1977 or related agreements, and




45-988 0 79 -4





46


45
1 becomes emiployed under the Social Security Sy~stem of the 2 Republic of Panama through the transfer of a function or 3 activity to the Republic of Panama from the United States or 4 through a job placement assistance program, provided such

5 person6 (1) has been credited with at least five years of

7 Federal service under the United States Civil Service

8 Retirement System;

9 (2) is not eligible for an immediate retirement an1 0 nuity, and does not elect a deferred annuity under the

11 United States Civil Service Retirement System; and

12 (3) elects to withdraw the entire amount of his

1:3 contributions to the United States Civil Service Retire14 ment System and transfer it to the Social Security

15 System of the Republic of Panama pursuant to the

16 special regime referred to in paragraph 3 of Article

17 VIII of the Agreement in Implementation of Article

18 111 of the Panama Canal Treaty of 1977.

19 (b) The sums of money made available under subsection

20 (a) shall not exceed, in any case, the amount of the employee 21 contribution withdrawn from the fund and paid over to the 22 Panamanian Social Security System. 2:3 (c)( 1) Pursuant to paragraph 2(b) of Annex C to the

24 Agreement in Implementation of Article IV of the Panama 25 (Canal Treaty of 1977, there are authorized to be appropni-





47



1 ated such sums of money as may be necessary to purchase a 2 nontransferable deferred annuity for the benefit of each em3 ployee of the United States Forces, including employees of 4 all nonappropriated fund activities of the Department of De5 fense, in the Republic of Panama

6 (A) who is not a citizen of the United States of

7 America;

8 (B) who was employed prior to and is employed

9 upon the effective date by an instrumentality of the
10 United States Government in the Republic of Panama

(including, in the case of emploN-ment prior to such 12 date, the former Canal Zone);

13 (C) who, for any period of his or her employment
14 with that instrumentality of the United States Govern15 ment prior to the effective date was not covered by a
16 retirement program for the full period of employment;

17 (D) who, on the effective date is under a retire18 ment system provided by, the United States or an in19 strumentality of the United States Government, or
20 would have been eligible to be under a retirement
21 system of such instrumentality had one been available

22 during previous creditable service; and
23 (E) who, on the effective date has at least five

24 years of creditable service.









47
~) The, Presitdent of the United States, or his designee,

S:ll: pay iut of the general funds of the United States Treas, ,:1ch s as are appropriated pursuant to subsection

4 f. 1) t i section in accordance with such regulations as

S resident or his designee may prescribe.

) The annuity referred to in subparagraph (c)(1) above

will cr ret activelylv, from the effective date, all periods of e e(1i1 (e service of such persons with United States Gov0 &rT Lt instrumentalities in the Republic of Panama (includnt) t, t >jr'er Canal Zone) during which such persons were i nK ;o.ereu by an appropriate retirement program.

(4) Neither the United States Government nor its inS n :~,~n litis is required to furnish or to pay for retirement

14 u rge for the individuals referred to in subparagraph (c)(1) ,5 Tho,, in the Social Security System of the Republic of 16 Panam, for periods of employment with the United States

1 7 r (vnment or its instrumentalities prior to the effective


19 SE. 330. (a) Section 5316(87) of title 5 of the United

20 States Code is amended by striking out "Governor of the 21 Cmanl Zone" and substituting in lieu thereof "Administrator 22 of the Panama Canal Commission". 23 (b) Section 6322(a) of title 5 of the United States Code

24 s amended by deleting the words "the Canal Zone, or", by 25 inserting a comma in place of the period after "the Trust








48
1 Territory of the Pacific Islands at e end o : 2 tence, and by adding thereafter "or t! 1

3 Panama.".

4 (c) Subchapter III of chaptw: L5 of title of :,

5 States Code, pertaining to Overseas ,iffcviei< and 6 Allowances, is inapplicable to employees a nfld Uo w(rK ln 7 the Republic of Panama for the P narna Cna ( morasion 8 or an executive agency which makes an eleci lider see9 tion 142(b) of title 2 of the Panama C tn i J 10 (d) References to the Canal Zone in the loik)Wing sec11 tions of title 5 of the United States Code shalI be deemed t> 12 refer to areas in the Republic of Panama used or rei. < :< 13 the United States pursuant to the Panama C'ianal T rea ; : 14 1977 and related agreements: 15 (1) section 5595(a)(2)(iii);

16 (2) section 5724a(a); and

17 (3) section 8102(b).

18 (e) Section 1(b) of the Act of April 14, i%H (0i :<

19 903(c)) and section 6(a) of the Act of July 17, 1>I U 20 U.S.C. 904(a)(2)) are inapplicable to teachers who are 21 ployed by the Canal Zone Governiment school system ilmle22 diately prior to the effective date and are transferred to the 23 Department of Defense Overseas Dependent School Syt. 24 (f) Section 5102(c)(12) of title 5 of the United -Ntes

25 Code is amended to read as follows: "Federal employees





30


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1 whose pay is fixed under authority and regulations of the

2 Panamna ("anal Employmnent System.". :3 CHAPTER 3-POSTAL MATTERS

4 SEC. 341. POSTAL SERvicE.-(a) The postal service

5 established and governed by chapter 73 of title 2 of the 6 Panama Canal Code shall be discontinued upon the effective

7 date.

8 (b) The provisions of chapter 73 relating to postal-say9 ings deposits, postal-savings certificates, postal money 10 orders, and the accounting for funds shall continue to apply 11 for the purpose of meeting the obligations of the United 12 States concerning outstanding postal savings and money 13 orders and disposition of funds. 14 (c) The Panama Canal Commission shall take posses15 sion of and administer the funds of the postal service and 16 shall assume its obligations. The Commission and the United 17 States Postal Service are authorized to enter into agreements 18 for the transfer of funds or property and the assumption of 19 administrative rights or responsibilities, with respect to the 20 outstanding obligations of the postal service. 21 (d) Mail addressed to the Canal Zone from or through

22 the continental United States may be routed by the United 23 States Postal Service to the military post offices of the 24 United States Forces in the Republic of Panama. Such miii25 tary post offices shall provide the required directory servces





p
al


50
1 and shall accept such mail to the extent permitted under the 2 Panama Canal Treaty of 1977 and related agreements. The 3 Panama Canal Commission is authorized and directed to fur4 nish personnel, records, and other services to said military 5 post offices to assure wherever appropriate the proper distri6 bution, rerouting, or return of said mail.
7 (e)(1) The words "Except as provided in the Canal Zone
8 Code, the" in the second sentence of section 403(a) of title 9 39 of the United States Code are revised to read "The". 10 (2) The words "each post office in the Canal Zone

11 postal service," in section 3402(a) of title 39 of the United 12 States Code are revised to read "each military post office of 13 the United States Forces in the Republic of Panama" and 14 section 3402(b) of title 39 of the United States Code is de15 leted.

16 (3) Section 3682(b)(5) of title 39 of the United States

17 Code is amended by striking the words "the Canal Zone 18 and".

19 (4) Section 3401(b) of title 39 of the United States Code

20 is amended by inserting the word "or" before the words "the 21 Virgin Islands" and by striking the words "or the Canal 22 Zone".

23 TITLE IV-COURTS AND RELATED FUNCTIONS 24 SEc. 401. CONTINUATION OF CODE AND OTHER
25 LAWS.-(a) Except as otherwise provided in this Act, the






52


51
1 provisions of the Panama Canal Code, as amended, and other 2 laws applicable in the Canal Zone prior to the entry into 8 force of the Panama Canal Treaty of 1977 by virtue of the 4 territorial jurisdiction of the United States in the Canal Zone 5) shall continue in force only for the purpose of the exercise of 6 the authority vested in the United States by that Treaty and
7 related agreements.

8 (b) None of the provisions or laws referred to in subsec9 tion (a) shall be construed as regulating, or providing authori10 tv to regulate, any matter as to which the United States may 11 not exercise jurisdiction under the Panama Canal Treaty of 12 1977 and related agreements. 13 SEC. 402. JURISDICTION DURING TREATY TRANSI14 TrION PERIOD.-(a) The Congress of the United States finds 15 that Article XI of the Panama Canal Treaty of 1977 pre16 scribes certain special provisions governing the jurisdiction of 17 the United States in the Republic of Panama during a transi18 tion period of thirty months beginning upon the date the 19 Panama Canal Treaty of 1977 enters into force. 20 (b) Notwithstanding inconsistent provisions of the
21 Panama Canal Code or any other law, the jurisdiction of the 22 district court'and magistrates' courts established pursuant to 23 title 3 of the Panama Canal Code shall be limited as provided 24 by Article XI of the Panama Canal Treaty of 1977.








52
1 (c) For the purposes of the exercise of the Jurisdiction

2 described in subsection (b), the terms "United States citizen 3 employees", "members of the United States Forces", "civil4 ian component", and "dependents" shall be construed as 5 they are defined in the Panama Canal Treaty of 1977 and 6 related agreements. Simnilarly, the term "areas and installa7 tions made available for the use of the United States" shall 8 be construed to mean (1) the Canal operating areas and hous9 ing areas described in Annex A to the Agreement in Imple10 mentation of Article III of that Treaty, (2) the Ports of 11 Balboa and Cristobal described in Annex B to that Agree12 ment, and (3) the Defense Sites and Areas of Military Co13 ordination described in Annex A to the Agreement in Imple14 mentation of Article IV of that Treaty. 15 SEC. 403. DIVISIONS AND TERMS OF DISTRICT

16 COURT.-(a) The United States District Court for the Dis17 trict of the Canal Zone is authorized to conduct its affairs at 18 such places within the areas made available for the use of the 19 United States under the Panama Canal Treaty of 1977 and 20 related agreements, and at such times, as the district judge 21 may designate by rule or order. 22 (b) Sections 2 and 3 of title 3 of the Panama Canal

23 Code are repealed.

24 SEC. 404. TERM OF CERTAIN OFFICEs. -Notwith25 standing the provisions of sections .5, 41, 45, and 82 of title 3





54


53
1 of the Panamna Canal Code, the term of office of the district 2 judge, magistrate, United States attorney or U~nited States 3 marshal appointed after the date of enactment of this Act 4 shall extend for a period of thirty months beyond the date the 5 Panama Canal Treaty of 1977 enters into force, and be sub6 ject to such extension of time as may be provided for disposi7 tion of pending cases by agreement between the United 8 States and the Republic of Panama pursuant to the last sen9 tence of paragraph 7 of Article X1 of the Panama Canal 10 Treaty of 1977.

11 SEC. 405. RESIDENCE RE QUIRE MENTS. -Sections

12 5(d), 7(d), 41(d), and 45(d) of title 3 of the Panama Canal 13 Code, the second sentence of section 42 of that title, and the 14 second sentence of section 82(c) of that title, which require 15 that certain court officials reside in the Canal Zone, are re16 pealed.

17 SEC. 406. (a) Section 6 of title 3 of the Panama Canal

18 Code is amended to read as follows: 19 "SEC. 6. SPECIAL DISTRICT JUDGE.-The chief judge

20 of the judicial circuit of which the district court is a part may 21 designate and assign a special district judge to act when nec22 essarv:

2:3 "(1 during the absence of the district judge;





55


54
1 "(2) during the district judge's disability or dis2 qualification, because of sickness or otherwise, to dis3 charge his duties; or
4 "(3) when the office of district judge is vacant.".

5 N Each such designation and assignment by the chief
6 judge shall be made in accordance with chapter 13 of title 28 7 of the United States Code, which shall be deemed to apply
8 for such purposes.

9 SEC. 407. MAGISTRATES' COURTS.-(a) The two mag10 istrates' courts established pursuant to section 81 of title 3 of 11 the Panama Canal Code and existing immediately preceding 12 the date upon which the Panama Canal Treaty of 1977 13 enters into force shall continue in operation for thirty months 14 from that date unless discontinued during that period as oth15 erwise provided by this section. 16 (b) During the period referred to in subsection (a), one

17 or both magistrates' courts, together with the positions of 18 magistrate and constable corresponding thereto, may be abol19 ished by the President or his designee if in his judgement the 20 workload is insufficient to warrant continuance of either or 21 both courts. If one of the courts is so abolished, the remain22 ing magistrate's court shall exercise the jurisdiction that oth23 erwise would have been exercised by the abolished court and 24 shall take custody of and administer all its records.








55
1 (c) If both magistrates' courts are abolished pursuant to

2 subsection (h). the following provisions shall thereafter apply:
(1) The district court shall exercise the jurisdic4 tion of the magistrates' courts.
5 (2) All records of the magistrates' courts shall be

6 deemed records of the district court.

7 (3) A criminal action that otherwise would have
8 come within the original jurisdiction of the magistrates'

9 courts shall be instituted in the district court by a com10 plaint executed pursuant to section 3701 of title 6 of

11 the Panama Canal Code, and the law and rules appli12 cable in the district court shall thereafter apply. All

13 other criminal actions shall be instituted in the district
14 court by the filing in each case of an information pur15 suant to chapter 213 of title 6 of the Panama Canal

16 Code.
17 (4) The requirement of and procedures for prelimi18 nary examinations under section 172 of title 3 and sec19 tions 3801 through 3806 of title 6 of the Panama

20 Canal Code shall not apply.
21 SEC. 408. Section 543 of title 3 of the Panama Canal

22 Code is amended to read as follows: 23 "SEc. 543. OATH.-Before receiving a certificate the
24 applicant shall take and subscribe in court an appropriate 25 oath prescribed by the district judge.".





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56
1 SEC. 409. TRANSITION AUTHORITY.-Except as ex2 pressly provided to the contrary in this Act, in any other 3 statute, in the Panama Canal Treaty of 1977 and related 4 agreements, or by Executive order, any authority necessary 5 to the exercise during the transition period of the rights and 6 responsibilities of the United States specified in Article XI of 7 the Panama Canal Treaty of 1977 shall be vested in the

8 Panama Canal Commission.

9 SEc. 410. SPECIAL IMMIGRANTS.-(a) Section

10 101(a)(27) of the Immigration and Nationality Act (8 U.S.C. 11 1 101(a)(27)) relating to the definition of special immigrant, is 12 amended13 (1) by striking out "or" at the end of subpara14 graph (C);

15 (2) by striking out the period at the end of sub16 paragraph (d) and inserting in lieu thereof a semicolon;

17 and

18 (3) by inserting after subparagraph (D) new sub19 paragraphs (E) and (F) to read as follows:

20 "(E) an immigrant who is an employee of the

21 Panama Canal Company or Canal Zone Government,

22 who is resident in the Canal Zone on the effective date

23 of the exchange of instruments or ratification of the

24 Panama Canal Treaty of 1977, and who has performed








57
faithful service for one Near, or more, and his spouse 2 and children N-,,Iio accompany or folloNN, to join him; or
3 "(F) an immigrant, and' his spouse and children
4 who accompany or follow to join him, who is a Pana5 manian national and (i) who, prior to the date of entry
6 into force of the Panama Canal Treaty of 1977, has
7 been honorably retired from United States Government

8 employment in the Canal Zone (or former Canal Zone)
9 with a total of fifteen years, or more, of faithful service
10 or (ii) who, on the date of entry into force of the
11 Panama Canal Treaty of 1977, has been a faithful em12 ployee of the United States Government in the Canal

13 Zone (or former Canal Zone) for fifteen years or more
14 and who subsequently is honorably retired from such
15 employment.".

16 N Section 212(d) of such Act (8 U.S.C. 1182(d)), relat17 ing to waivers of conditions of inadmissibility to the United 18 States, is amended by adding after paragraph (8) new para19 graphs (9) and (10) to read as follows: 20 "(9) The provisions of paragraph (7) of subsection (a)
21 shall not be applicable to any alien who is seeking to enter 22 the United States as a special immigrant under subparagraph 23 (E) or M of section 101(a)(27). 24 "(10) The provisions of paragraph (15) of subsection (a)
25 shall not be applicable to any alien who is seeking to enter





59


58
1 the United States as a special immigrant under subparagraph 2 (E) or M of section 101(a)(27) and who applies for immigra3 tion ho later than thirty calendar months after the date the
4 Panama Canal Treaty of 1977 enters into force.".

5 SEc. 411. PRISONS; PAROLE; PARDON.--(a) Subsec6 tion W of section 6503 of title 6 of the Panama Canal Code
7 is amended to read as follows:

8 "(c) Pursuant to the provisions of section 5003 of title
9 18 of the United States Code, the Governor shall contract 10 with the Attorney General for the transfer to the custody of 11 the Attorney General of prisoners sentenced by the United 12 States District Court for the District of the Canal Zone to 13 terms of imprisonment in excess of one year.". 14 (b) Upon entry into force of the Panama Canal Treaty of

15 197716 (1) all prisoners then imprisoned in United States
17 prisons pursuant to contracts entered into under sub18 section W of section 6503 of title 6 of the Panama

19 Canal Code shall be committed to the custody of the

20 Attorney General as if committed in accordance with

21 part Ell of title 18 of the United States Code;

22 (2) all persons convicted of offenses in the United

23 States District Court for the District of the Canal
24 Zone, and sentenced to terms of imprisonment of one








59
year or less, shall be committed to the custody of the

2 Panama Canal Commission;
3 (3) the Panama Canal Commission shall prescribe,

4 and from time to time may amend, regulations provid5 ing for the management of prisoners in the jails located
6 in the areas and installations made available for the
r i use of the United States pursuant to the Treaty, m8 eluding provisions for treatment, care, assignment for

9 work, discipline, and welfare;
10 (4) sections 6501 through 6505 of title 6 of the

11 Panama Canal Code are repealed; and

12 (5) chapter 355 of title 6 of the Panama Canal

13 Code is repealed.
14 (c) After entry into force of the Panama Canal Treaty of
15 1977, all persons convicted of offenses in the United States 16 District Court for the District of the Canal Zone, and sen17 tenced to terms of imprisonment in excess of one year, shall 18 be committed to the costody of the Attorney General pursu19 ant to parts III and IV of title 18 of the United States Code. 20 TITLE V-MISCELLANEOUS PROVISIONS

21 SEc. 501. HEALTHi DIRECTOR; HOSPITALS.-(a) In
22 chapter 57 of title 5 of the Panama Canal Code, references to 23 "hospitals", to the "Health Bureau", and to the "health di24 rector", shall be deemed to be, respectively, to the hospitals 25 operated by the United States in the Republic of Panama





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1 after the effective date, to the organizational unit operating 2 such hospitals, and to the senior official in charge of such

3 hospitals.

4 (b) In section 4784 of title 6, section 2 of title 7, and

5 sections 32, 35 through :38 of title 8 of the Panama Canal 6 Code, references to the health director shall be deemed to be 7 to the senior official in charge of the hospitals operated by 8 the United States in the Republic of Panama after the effec9 tive date.

10 SEC. 502. DISINTERMENT, TRANSPORTATION, AND

11 REINTERMENT OF REMAINS.-(a) There are hereby author12 ized to be appropriated such sums as may be necessary to 13 carry out the purposes and provisions of reservation 3 to the 14 Resolution of Ratification of the Treaty Concerning the Per15 manent Neutrality and Operation of the Panama Canal, 16 adopted by the LUnited States Senate on March 16, 1978, 17 said sums to be made available to those agencies that are 18 directed and empowered by the President of the United

19 States to carry out such purposes and provisions.

20 (b) With regard to remains that are to be reinterred in

21 the United States, the U~nited States will not bear the cost of 22 funeral home services, vaults, plots, or crypts unless other23 wvise provided for by law.

24 SEC. 503. EFFECTIVEDIATE.-(a) Except as otherwise

25 provided in subsection (b) of this section, the provisions of



45-988 0 79-5






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1 this Act shall take effect on the effective date of the Panama

2 Canal Treaty of 1977.

3 (b) Sections 231, 321, 322, 325, 326, 404, 410, 411,

4 and 502 of this Act shall become effective upon the date of

5 enactment of this Act.
the in I ito tee, us






di in










a





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Ms. HOLTZ31AN. The witnesses before us today are the U.S. Ambassador to the Republic of Panama, Hon. Ambler H. Moss, Jr.; and the Special Representative of the Secretary of State for Panama Treaty Affairs, Hon. David H. Popper.
We will begin by hearing from Mr. Popper.

TESTIMONY OF HON. DAVID H. POPPER, SPECIAL REPRESENTATIVE
OF THE SECRETARY OF STATE FOR PANAMA TREATY AFFAIRS
Ambassador POPPER. Thank you, Madam Chairman.
May I ask that Ambassador Moss sit at the table with me so we can both testify seriatim.
Ms. HOLTZMAN-. Very good. In order to expedite this hearing, unless there is objection I will ask for the inclusion of your entire testimony in the record at this point. Perhaps it would be best if you summarized it. Mr. Popper, you may begin, and then Mr. Moss.
Ambassador POPPER. Thank you. I do appreciate the opportunity, Madam Chairwoman, to appear here today before this subcommittee to express the views of the Department of State with respect to the Panama Canal Treaty, the implementing legislation which enables us to execute those parts of the treaty which are not self-executing, and various sections of the proposed legislation of interest to the Judiciary Committee and to the subcommittee.
As suggested by the chairwoman, I will not read in detail the earlier and more general parts of mv statement. I do appreciate their being submitted for the record.
I would like, if I may. to save the committee's time, simply to go directly to the subject of special immigration which is of particular interest to this subcommittee.
The business under consideration, principally the administration's proposal, H.R. 1716 and the proposal of Chairman Murphy in the House Merchant. Marine and Fisheries Committee, H.R. 111, include measures to facilitate the immigration into the United States of certain employees of the Panama Canal Company and Canal Zone Government and their families.
As you know, present law provides that U.S. Government employees in any foreign country who are retired or have 15 years or more of faithful service may enter the United States as immigrants upon a recommendation, limited to exceptional circumstances, by the head of a U.S. diplomatic mission and a determination by the Secretary of State that the proposed action is in the national interest.
Persons entering as special immigrants under this provision are exempt from numerical restrictions and from the requirement for labor certification. The proposed legislation goes beyond this limiting provision. In order to respond to the needs of a particular group of present and past canal employees who will undergo a unique and profound transition when the treaty goes into effect. While the canal was being constructed, a part of the work force was recruited from West Indian islands. Some of the descendants of those early workers are still serving with the canal organization. They have lived and worked for generations under American jurisdiction.
They have not assimilated with the Panamanians, and their cultural background and allegiance lies rather with the United States yet, as a





64

matter of law. Ihese individuals are lanamanians and not Americans.
While the Iiplenmenting le:rislation(m is not anld could not be framed to apply to them alone, our intention is to enable them, if they desire. to settle in the United States. In brief, under the administration's prOp)osal, an employee now resident in the Canal Zone who has performed faithful service for 1 year or more, or one residing in Panama whoi has honorably retired or in the future retires from U.S. Governnwnt eImployment with 15 or more years of faithful service prior to October of this year, maiy enter the United States as a special innuicrrant.
The i, persons are exempted for a period of 30 months from the public charge and certain health requirements of present law. Spouses and children are included in this authorization. We expect that the bulk of those who take advantage of these provisions will be retired persons receiving U.S. Government pensions.
Should they wish to come we believe their admission to the United States is called for as a mark of recognition of their devoted service.
Chairman Murphy's bill. H.R. 111, would extend special immigration benefits to all canal employees of 1 year's standing or more as of October 1, but would apply the public charge exemption with restrictions generally similar to those in the administration's proposals. In addition, it drops the 30-months limitation. We prefer the administration s version.
Madam Chairwoman, I hope these remarks will be helpful in the subcommittee's consideration of this important legislation and I would suggest, if you agree. that the subcommittee now hear Ambassador Moss.
[Complete statement of Ambassador Popper follows:]

STATEMENT ON PANAMA CANAL TREATY IMPLEMENTATION BY AMBASSADOR DAVID H. POPPER, SPECIAL REPRESENTATIVE OF THE SECRETARY FOR PANAMA TREATY AFFAIRS
I am happy to participate in this Subcommittee's hearings on legislation to implement the Panama Canal Treaty of 1977.
The Subcommittee is I know interested in those portions of the Panama Canal Treaty implementing legislation which involve immigration problems, and those hearing upon our commitments and responsibilities under international law. The full Committee will also wish to take into account the substance of Title IV of the Administration's bill (H.R. 1716) which includes items with respect to the law applicable during and after the Treaty transition period and the court structure for enforcing those laws.
If I may, I should like to begin with some general remarks on the significance of the implementing legislation, in terms of our broader international interests.
The Panama Canal Treaties of 1977 were the result of 13 years of arduous negotiations, under four American Presidents. Those negotiations began because the vexing difficulties we had encountered in managing the Canal led us to the conclusion that the arrangements under which it had been built and operated were no longer appropriate to the circumstances of the times. The world had changed. The morality and the feasibility of exercising jurisdiction in the territory of another country, over its opposition, had been called into question. While we continued to have the naked power to maintain the 1903 Treaty arrangements, the price of doing so had become inordinately high. That price had to be measured in two ways. First, we had to consider the resources required to keep the Canal open in the hostile environment of a resentful and unhappy Panama. Four of our Presidents and their military advisers reached the conclusion that it was not necessary or desirable to pay that price.
From a broader point of view, standing pat on the then existing arrangements was similarly unpalatable. For years, in every international forum discussing the Panama Canal problem, the United States had been condemned for what was






65

termed its colonial policy. The subject constantly embittered our H1emi sphere relations. It stood in the way of our friendships with Latin American andI Carib)bean countries and hampered our efforts to encourage e self-determina tioni andl independence in the ipost-World War 11 system of nation.
The negotiations started against this background were beset with difficulties. Our country has had a special attachment to the Panama Canal. and the thought of parting with it was-and remains-a wrenching concept to many pa trioti( Americans. On the Panamaniani side, it was just a ditticuilt to admit that the American presence which hiad cut their country in two since its origin sh4ouild remain in place any longer.
As you know, mutually acceptable solutions for the problems of transferring the Canal were eventually worked out. In brief, under the Treaties the United States continues to operate and defend the Canal until the year 2000, in association with Panama.
After the year 2000, the UInited States retains indefinitely the right to protect the Canal against any threat or act of a zression.
Thus we have arranged for a carefully phased transition to Panamanian mailagement of the Canal in the 21st century, while protecting our ability to ensure that we can always use the waterway for commercial or (defense purposes.
The agreements reached in 1977 have already demonstrated their potentialities and their promise. Where the Treaty of 1903 had long been resisted by Panama, the new Treaties were decisively accepted in a national referendum, and the Government of Panama is giving first priority to preparations for the new Treaty arrangements. Relationships between Panamanianm and American officials have improved very substantially. These developments have coincided with, and undoubtedly reinforced, Panama's substantial progress toward greater respect for human rights and a more representative system of government.
From the American standpoint, conclusion of the Treaties has removed a divisive issue in our relations with other Hemisphere countries. The Treaties are supported not only in Latin America. but throughout the world. They stand~ as an example of howv a large nation and a small nation, approaching a complex problem in a spirit of fairness and on a basis of sovereign equality, can reach an accord which is mutually advantageous.
The exchange of ratifications of the Panama Canal Treaties became effective on April 1. Accordingly, the Panama Treaties are now a part of the law of the land. Both domestically and internationally, they are binding upon us. The specific provisions of the Treaty will by their terms come into force six months from the effective date of ratification-that is, on October 1 next. Every (lay of this period is needed to prepare adequately for the steps which must be taken before the new Treaty system can be put into effect.
The implementing legislation must be viewed in this perspective. Since the Panama Canal Treaty is not entirely self-executing, legislation is required to fill the gaps. In many respects the Treaty tells us what must be done, but not how it is to be done under American law. The bills before the Subcommittee address themselves to this situation.
The legislation establishes the Panama Canal Commission, the new Canal operating agency, as an instrumentality of the United States G'overnment operating under United States law. It lprescribes the personnelI system for the Canial operation ; establishes the basis for determining tolls and making the nleces.-sary payments to Panama from Canal revenues: sets forth the law enforcement arrangements to prevail during the life of the Treaty; and covers a number of other important matters.
The complexity of the legislation is indicated by the fact that four Cominitte-es of the House of Representatives are considering its various Titles. We expect that four Senate Committees will do likewise. A fruitful discussion has been under way with a view to producing a statute which will best reflect the views of Congress and the Executive Branch. The Administration has stressed the urgency of the legislation. I believe all parties understand the need for adequate lead time if the transition is not to be inefficient, costly, and in the extremity even crippling to the continued operation of the Canal.
Treaty implementation legislation must be judicious as well as timely. As eventually adopted, it should lbe fully consistent with the letter andl spirit of the P~anama Treaties. Otherwise the good faith of the United States; will be questioned, and the spirit of cooperation and trust engenderedI during the negotiations will not be fully preservee(.






66

The United States can protect its own interests in the Canal without abandoning that spirit (r unilaterally departing from the cooperative posture which characterized the Treaty negotiations and our subsequent planning for Treaty implenmentation. We can assure the attainment of our fundamental objectives without injustice to our Panamanian partners. But to do so) requires a constructive rather than a. vindictive approacIh.
Given its oncern for international law. this Subcommittee will wish to ensure that the implementing legislation is framed in terms consonant with the Panama (nal Treaty. Any attelimpt to ue the legislative process to alter the Treaty terms would call our credibility into question and would probably violate specific Treaty conminitmenits. This is not a role our country has played or one which we could defend.
We have raised this point in the course of consideration of the implementing legislation introduced by Congressman John Murphy, Chairman of the House Merchant Marine and Fisheries Committee, together with other Representatives. Chairman Murphy's bill (H.R. 111) presents an alternative to the Administration prnpo)a1l. In many respects, the two bills are similar; in some, they differ quite substantially.
The administration has challenged certain provisions of H.R. 111 on the ground that they are not consistent with the letter or the spirit of the Treaty by which we are bound. We believe that the bill is faulty in the following particulars:
It contains provisions which would reduce to zero the possibility that
Panama might receive some or all of a $10 million contingent annuity to which under the Treaty it is entitled if the Canal should have a surplus in
any given year.
It requires that Treaty payments to which Panama is entitled be withheld
while entirely unrelated expropriation claims (virtually regardless of their
merits) remain unresolved.
It would require Congressional assent for each transfer of property to
Panama after the initial turnover next October, thus creating a doubt that the Treaty provisions for such turnovers phased over time will be honored.
It puts the Panama Canal Commission and its Board of Directors "under
the direction" of the Secretary of Defense, reducing the role of Panamanian
directors to a nullity.
It gives the President power to put the entire Canal operation under the
control of a U.S. military officer in the case of war or imminent war-in effect, setting the Treaty aside. Under the Treaty the President already has
ample authority to defend the Canal.
All of these provisions seem to us to contravene the intent or the spirit if not the letter of the Panama Canal Treaty. They will not, if adopted into law, serve our national interest. If Panama should become convinced that we mean to disturb the delicate balance of rights and obligations contained in the Canal Treaty by our own unilateral action and in ways disadvantageous to it, Canal operations will inevitably be affected. The spirit of cooperation and partnership which underlies the Treaties will be impaired, and Panama might react accordingly.
We hope that before the implementing legislation reaches the floor of the House of Representatives, it will be purged of such provisions. This Committee, we believe, should have an interest in this matter, given its interest in international law.
I should like to make comments on two other elements of the proposed legislation.
First, the Panama Canal Treaty and the accompanying agreements provide in some detail for the way in which the criminal and civil laws of the United States should be pi)hased out and Panamanian jurisdiction should be phased in during the Treaty's life. In a word, during the two and one-half year transition period beginning in October, the United States will retain the primary right to exercise criminal jurisdiction over Americans in the Canal Commission component and the Defense forces, for offenses committed within the areas we retain and in cases involving offenses committed prior to October 1. We will retain police authority in retained areas and installations, and U.S. courts will continue to function to try Americans under applicable United States law. Civil cases pending on the effective d(late of the Treaty will be dlisposed of by the existing courts. These courts will have no jurisdiction over new civil cases.
After 1982, Panamanian law will be applicable, but numerous safeguards are







67

provided to protect the interests of American natural or juridical persons inl the present Canal Zone. Panama is pledged to give favorable consideration to requests that it waive its jurisdiction in our favor as regards offenses commflitted by Americans. When jurisdiction is waived, these persons would be triedI in the United States. Where American defendants are tried iii the courts of Panama, an annex to the Treaty implementation agreement lists a wide-ranging group of procedural guarantees which will be applied. In this connection, we have negotiated a Treaty with Panama which when ratified will entitle American citizens convicted of offenses in Panama to serve their sentences in prisons in the United States.
The implementing legislation provides for continuation of the present court system for the purpose of exercising U.S. jurisdiction during the transition period. The legislation also transfers responsibility for the incarceration of persons convicted of felony offenses from the Canal Zone Government, which will go out of existence, to the Department of Justice. There are no important substantive differences between the alternative bills under consideration. We would have no problem with a provision in Chairman Murphy's bill establishing an Office of Ombudsman, with power to make recommendations to the Commission or other U.S. agencies regarding the problems of employees.
Finally, let me touch on one additional matter: The subject of special immigrants.
The bills under consideration include measures to facilitate the immigration into the United States of certain Canal employees and their families.
As you know, present law provides that U.S. Government employees in any foreign country who are retired or have 1.5 years or more of faithful service may enter the United States as special immigrants upon a recommendation, limited to exceptional circumstances, by the head of a U. S. dhiplomfatic mission, and a determination by the Secretary of State that the proposed action is in the national interest. Persons entering as special immigrants under this provision are exempt from numerical restrictions and from the requirement for labor certification. The proposed legislation goes beyond this limited provision in order to respond to the needs of a particular group of present or past Canal Company employees who will undergo a unique and profound transition when the Treaty goes into effect.
While the Canal was being constructed, a part of the work force was recruited from West Indian Islands. Some of the descendants of those early workers are still serving the Canal Company. They have lived and worked for generations under American jurisdiction. They have not completely assimilated with Panamanians, and their cultural allegiance is to the United States.
As a matter of law, these individuals are Panamanians and not Americans. While the implementing legislation is not and cannot be framed to apply to them alone, the intention is to enable them-if they desire--to, settle in the United States.
In brief, under the Administration proposal an employee now resident in the Canal Zone who has performed faithful service for a year or more, or one who has honorably retired or in the future retires from U. S. Government employment with 15 or more years of faithful Government service prior to October 1, may enter the United States as a special immigrant. These persons are exempted for a period of 30 months from the public charge ,ind certain health requirements of present law. Spouses and children are included in this authorization.
We expect that the bulk of those who take advantage of these provisions will be retired persons receiving U. S. Government pensions. We believe their admission to the United States is called for should they wish to come, as a mark of recognition of their devoted service.
Chairman 'Murphy's bill would extend special immigration benefits to all Canal employees of one year's standing or more as of October 1, but would apply the public charge exemption with restrictions generally similar to those in the Administration proposal. In addition, it drops the thirty-mionth limitation. 'We prefer the Administration version.
Mr. Chairman, I hope that these remarks will be helpful in the S .ubcommittee's consideration of this important legislation.
Thank you.
N19. HorLTZAAN. Thank you very much.
We appreciate vour appearance here and vour testinion-y.






6 1 S

Mol-l-, wc will jnIiilo Ywir fill] :ztitenit nt ill tliv record. 111:11ter- it.
\N( N\0 111(1 11 1 1 )-TESTIMONY OF AMBLER H. MOSS, JR., U.S. AMBASSADOR TO THE REPUBLIC OF PANAMA

I NVollid ()111Y w,171t told(l from om- point of i-iew tile Treaty date is I of fliis year. Tt*s veiy important that
(,()I1LrTv ,S act car]N- to 1111pleni( ntin" ](,crlslatlon which will define tll(, 1,111e, 11TIder which 111anY of the employees NN-111 be determinitig their own
We \\-I]] lwzettinpr ill) the l,-inam,-t ('anal Cominissioll. lie T Gov(,I*Tllll(,Ilt acrell(,N- which Will IN' 0j)('I-,'ltIT1Cr in the C,11121 until the end of the cclit III, I-. all(l we will be slAling out those provisions of flie Treaty w1iieli do iwed furthei- elal'- oration I)v lorrislation
I would only waiif to add t 'a C011111lent to What the Ambassador
that T th i'nk tli:it flie special iijinilurrati OTI provisions under coni(lenltioll I)v thi!: sulwollinlittee are N-erv con -_i 4ellt with tbe proVisions of the treatN". paitwill.11-IN- tile ('111 ploy(le,
'PAI-V (111T 1111port"Allt for two rea., ;olls. For faithful employees they fill a ceitaiii Iiiiiii(in need. in(l ecnnd, because it transmits a very imporl). N-(-jl(,)j0(rWa1 41crnal to all the employees down there whether Tlie sigiial isthat "Washington" meanincr the executive an(I branclies-doeq care about then-i, and rec()frlliz(- their service ail(I 1111portalic", ill year" to come.
Th(at ] '- zin important signal to transillit. at this th-ne since it's a time
4 j), _N-Cjj0jo(r1ca] adapt ation to new conditions.
They (To nee(l rea- -znrance that tho U.S. Go\-ernnlent. cares about theiii. E%-en tllollfr]l this particidar -,ct of proi-Isions applies only, t,0 a finilted number of employees and not to meilcan citizens, it's a 11%ful r-,I(riial for our citizens as well as the Panamanian vinployees, continuing to worlC oil the c(Inal.
I woul(I ( nd Ili N- remark th( re in the intcre t of brevity.
rnic, ftoi stateillellt follo v., :]
STATEMENT OF AMBASSADOR A-MBLER H. "Moss, Jr.
Aly nanit, i,, Amhler 11. Mo.", Jr., and T ani the United States Ambassador to the Repuf)lie of Panmiia. I im ple;i, -;ed to nwet with you and the members of the Silhcoillill'Itee to di q:Tlss the j)r4)jW,- ed iI1lj)le1lW1ltiD- legislation for the Panama Canal Treat.v.
We are rapidly approaehin- Ilw date of entry into force of the Treaty, Octo1wr i, 1!il!). In anticiliation of tli:it (hite, (-on.siderable effort in planiiingfor Treaty i illpleillel I m t i I'll has heell illwle by re,-iwiisible element-, of the United States Goveninient a.- Nvell -I-- I)N- I,rejlo--'es of tile 1),,inam:iiiian Government. This planning ,ict vit v is ncc( ssarilN, a (-()niplex procedure, involvin- not only the coordination
()f tile W a,-41 i oil a,.ellcies willi each i)tli(,r aii(l with the field, but oil the Isthmus it tile need for a clo,- ely-coordinated approach between the American Emthe Palmill'i ("Inal OinipmY Cnii,,d Zone Government, and the U.S. Southorn Command.
It is of ,11,,rent iniportince to wir planning effort that tile Congress act early to pasl- illlpl( Illclltill (" 1c'J,1;ttiwi which not ()ill v -- supports the letter and spirit of the Pananm ('anal Trent v hut which enable,, the phimin.- for Treaty (lay to go abea(l hy completing the le, ,klativc franiew()rk within which the Paiiania Canal will operate.
'I'll(, Tr(,:it.N- contain,< iniiiiial odili,,;-itions to N-Odch both sides are committed.







69

and the work being done by both countries' planners represent an honet effor to be prepared for the new Treaty arranigements. The P"Timni,, Goverinent. as well as our own, is well aware of the need for the soothe ;t possibh -itic in order to keep the operation of the C,mal as efficient in tho f:!ue i it h, been in the past, for their own country's benefit and that of woxv 'm mv ".
We are fortunate in that many of the leaders of the Panamanivn &o' :n] e today were personally involved in the Treaty process over the last few ears and are therefore extremely knowledgeable. President Aristides I1oyo, a yomig lawyer who became President of Panama last October 11, was a chief Treaty ,etiatn r for Panama. He has shown a particular sensitivity toward the uee~L "xd ,oncerns of the U.S. citizens who live in the Canal Zone and who work on ihe Canal. President Royo has visited both the Atlantic and Pacific ,ides of thi C:'al Zone where he has met with American and Panamanian ctiens who !x( ::' work there. As a gesture of goodwill, he recorded a television me'sag in lgih to the American residents of the Canal Zone which was bro11.tci K ,: rh loca) Armed Forces television stations on New Year's Iay this year.
Numerous subcommittees made up of representatives frou
have been working together since mid-1978 to plan for the i eto o the Treaty on a wide range of subjects from operational transfers, such as the ports and railroads, to areas of employee and community iuterests, including personnel, housing, social security, utilities, the environment, an.d police :nC fire protection. Similar bi-national committees are working in areas of concern to our Southern Command and the Panamanian National Gu',ard.
Certain portions of our work have been dispatched in a very Cmely manner. In January we signed three agreements with Panama whirh were called for under the new Treaty relationship. These are:
A new civil aviation agreement which provides for the -iiAcdng over f our present air traffic control in Panama's air space to Panama over a ive-yeast period, which represents a considerable cost saving to the Unit-d Sfate: ;
An agreement providing for a permanent United States cemetery at the tVeseiit Corozal Cemetery in the Canal Zone, over which our flag will f1- and whichh ,v'l! be administered by the American Battle Monuments Commission
A prisoner exchange Treaty which provides procedures whereby American citizens convicted of a crime in Panama can serve their sentences in he ;ited& States and Panamanians convicted of a crime by a United States court -aY serve their sentences in their homeland.
It is apparent that we are already beginning to realize the benefits of our new partnership with Panama in the military field. In January and February of this year, conventional warfare exercises were held by our 193rd Infantry Brigade at the Rio Hato Military Base in cooperation with the manamanian National Guard. This military area, large in size and ideal in terrain for such exercises, is deep in Panama's interior and would not have been made availa> to us except under the new Treaty relationship. On Febrauary 16, I Lcc,.n panied President Royo on a visit to the U.S. Army School of the "ei s Given full military honors upon his arrival, he stated in a press conference at the School that he wished it to continue in operation after the ex_.,'atiun of the five-year agreement which will come into effect October 1, and he eucumae' the beginning of talks between the United States and Panamanian representative for that purpose. He has remarked to me that he is proud of the fact that cr, have been numerous Panamanian graduates of the School, and he hopes for greater Panamanian participation in it.
There are several elements I consider to be critical in the role of the United States Government in discharging its responsibilities under the new Treaty:
First, we must operate, maintain and defend the Panama Canal i ihi mo,efficient manner possible. Implementing legislation will be crucial in his r( ..... particularly in the manner in which it establishes the new Panama Canal Commission and the basis for setting tolls. Here it is important to cotinwcepts that the Canal be run as a self-sustaining enterprise, with the requisite managerial flexibility and tolls set at as low as possible a level to provide the greatest benefit to our shipping and that of the world.
Second, we must build a genuine working partnership with Panama, although that country will be a minority partner until the end of the century. Workimz in a spirit of collegiality is the essence of the Treaty scheme--to share decision, making responsibility and to impart to Panamanians the knowledge we have gained through the years in the intricate business of maintaining the Canal and in modernizing it to keep it competitive.


45-988 0 79 6






70

Third, and no less important, we must safeguard the interest of the United States citizens and the ('anal employees, recognizing their loyal service in the past and the tremendous need for them to continue to devote their best work to the enterprise in the future, Both the Administration bill (H.R. 1716) and the bill introduced by the Chairman of the House Merchant Marine and Fisheries ('ununittee (II.R. 111) would accomplish this purpose. Closely related to this last point are the special immigration provisions under consideration by this Subcommittee. These provisions are important for two reasons: First, because they fill a human need and help certain Canal employees and retired employees to cope with the changes in their lives which are inevitable under the Treaty; and second, because they transmit a signal to all employees that "Washington", meaning both the Ex(cutive and Legislative Branches of our Government, is sensitive to employee concerns. The efficiency of the Canal operntion will depend to a large degree upon the perception of the employees that they will be treated generously and equitably.
In conclusion, let me just say that I believe there is every reason to be optimistic about the success of our new treaty relationship. A new government in Panama took office last October which is composed of young, energetic, highlyeducated people who are determined to make their country an economic and social success. They have expressed a policy of vigorous stimulation of the private sector and have extended an open invitation to private foreign investment. An important part of their program is continued cooperation with the United States. They have demonstrated sensitivity to the concerns of American citizens who live in the present Canal Zone. If we are able to implement both the spirit and letter of the Treaties both with respect to Panama and to our own employees, and if we can help, through the coordinated efforts of our Government agencies, to maintain a true spirit of collegiality between both countries, the important service to our country and to world shipping provided by the Panama Canal will be assured well into the future.
Ms. HOLTZMAN. Thank you very much.
Let me start off by saying that I want to question you closely about this. It seems we are going to be changing our immigration provisions and it ought to be for very good reasons. I am not sure that just psychological signals are adequate justification. Let me ask you first: Is it true that the legislation the administration proposes would in essence permit 48,000 persons to come to this country? Is that correct?
Ambassador POPPER. That is the number who would be eligible for admission under these provisions.
Ms. HTOLTZMAN. Isn't it a fact that all but 400 of those 48,000 would be eligible for admission to the United States under existing law?
Ambassador POPPER. All but 400? I had not heard that. If I might, could I ask if Colonel Rhode, who represents the Department of the Army here today, might join us at the table.
Ms. HOLTZMAX. Four hundred workers plus dependents. Approxiimiately 2,800 persons would not be covered under the existing section 101 (a)27(D) of the immigration law.
Is that correct?
[The text of Section 101(a) (27) (D) follows:]
"(27) The term "special inunigrant"mean~* *
"(D) an immigrant who is an employee, or an honorably retired former employee., of the United States Government abroad, and who has performed faithful service for a total of fifteen years, or more, and his accompanying spouse and children: Proided, That the principal officer of a Foreign Service establishment, in his discretion, shall have recommended the granting of special immigrant status to such alien in exceptional circumstances and the Secretary of State approves such recommendation and finds that it is in the national interest to grant such status."






71

TESTIMONY OF COL. MICHAEL RHODE, JR., MILITARY ASSISTANT
TO THE ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS)
Colonel RHODE. I would have to check those figures. For those, of West Indian-descent living in the Canal Zone alone, we have approximately 800 who, along with their dependents, Would not be eligible under current authority.
Three hundred sixty are below the 15-year service requirement. I don't have the figures as to how many who have less than 15 years' service live outside the Canal Zone, but they would not be eligible under the proposed provisions.
MS. HOLTZMAN. Would you identify yourself for the record?
Colonel RHODE. I am Colonel Rhode, Military Assistant to the Assistant Secre,,tary to the Army (Civil Works).
MS. HOLTZMAN Thank you very much.
It would be very useful to the subcommittee to have the exact number of people who would not be covered under present law.
It seen-is to me -vvheii you come to Congress asking for new legislation to help a situation, we need to know the extent to which there is need for it.
Twenty-eight hundred people is considerably different from 48,000. That is a figure that our staff came up with.
We very much appreciate, you providing us with that information as quickly as possible.
Colonel RHODE. Yes, We Will.
[Information was not submitted.]
Ms. HOLTZMAN. Have you done a survey to determine whether the proposed beneficiaries of this special immigration legislation would take advantage of it?
Colonel RHODE. The Company has done a partial survey and has reported to us that an estimated 10 to 20 percent would take advantage of the special immigration provisions.
MS. HOLTZMAN. Not more than 20 percent. You don't know whether these are persons who have worked for 15 years or not.
Colonel RHODE. I don't, but I assume it is 20 percent of all those eligible.
MS. HOLTZMAN. Would you be able to get that breakdown for us?
Colonel RHODE.We will-attenipt to get that for you.
[Information was not submitted.]
Ms. HOLTZMAN. In fact, if none of the persons who have served 15 years would even want to come to the United States, there may not be a need for this legislation at all.
With respect to why the Department of State and the administration are asking for this legislation, it is my understanding there is some concern that these persons will lose their jobs once, the treaty takes effect.
What is the basis for this concern? Isn't it a fact that the supervisory board of the Panania Canal Commission will consist of five U.S. representatives and only four Panainaiiian nationals? What is the basis for the claim that these people's jobs are in jeopardy?






7 2)

A T I I h: I ; 'I( I( I I- P( ) T' I 'Y I Z. Ak (lnm T (]()it*t tliink it"s a question of thell. ])(,III ill :i- iwit-li :is the que.4ion of inany
of th('111 for 01c. fir-t t lille h) M lt tll(, trt'at N-. thl)-4, I'low NN-M -k'111cr for tilt, P all"Illia, ColnP"Ill V 1111d till, (".w al Zoll- 'tre t1w iiiaximuni
ext('711 T110 I-MvIlt 1()Il of theli, Nvot-king aii(l conditions
()f
it'-, Tmf Ilec('- 'i rih. t rie t hat thev Nvoiil(l feel Nvell-adjusted to a
-lt wit MI I 011(11 ('Xl '1110,41 '11V people, a-: T wliw;c ciiltin'al orientatioji i-uns towards, tile Vwte(l
Tsn*t it a f.i(-t flifit wil v 1.000 of these persons at tile pre,-zeiit tinie 11v(, Nvitldn tli(, Caital Zoiw all(I 10.000 live in
I T I I I I I -,I
ATIlb"Is Ms. 11'1)at about the cliltutal orielitation of tilose people
alrea(IN- 'n Panaiiia I
Fli, ,t, I tliink flivi-e is. -zoiiw fear on the part, of
0111(1 Of tlwiii tliev NN-mild lol ze theii, T tim t,,ilkin(y not, about, the (1111 NN-11o 1'eiiuiin with the Pammia Canal Commiqsion but some
Of the einployecs whose. Jobs \vlll be transferred along Avitli certain
to Panama. Tlii!: in(Iii(leq functloiis s-ticli as the ports and I.,a] which we re no\v pei-foi'inincy kit wli'cli Panaina would
pel-fol'ill in the filtill.e.
Pmama, ba,; a ti'eatv ohli(ration to retain these people to the maxiiniiiii extent possible.
However Hwy are of a different cultural background. Tliev often do not We 1)axe no i'ea.- on to believe fears are well-founded, but. the
fears aiv tliei-e. Tliese individuals are worried about flils problem

1,s it true Hie 10.000 eiiiployees wlio live. in Panama Lave itot a- _kw1)as.-:ad()r Moss. A niiiiiber of them liaven't. Tf vou Cro, to the city of Colon, you find people of the same, ethnic background but families speak only Enalish and otlier families speak Spanish.
'Flie assiiiii1ation is une\-en. Up until a few years ago, those who lived in tlie Caiial Zotio, oidN- lia(I acce s to Englisli-speaking schools
- o tlieir (Iii](Iren didii't ill) spe(,iking Spanisli.
To(I.-tv. becaiise of fiiiiilk- and cojimimilty ties, ina.nv still continue to ',-'peak 14'11(r as fliell. ':Il'lbbeall Ij1cC-stoi--. (lid, t1ley have not, assIT1111.1tA (.1 illto tlic P all.1111"ll"I(111 soclet.v.
IfOLTZAIAN. A-) I 1111(1(,r- tand it. in the tieatN- N-ou provide emplo N-111elit as- Ilrallc(-' fol. tile V.S. cltlzell ;. In otlwl' words, all "U.S. citlZODS Wilo Used to Nvoi-k foi- tilt, Panaiiia Canal liave been guarailteed blit no "llcil assui-ance liave I)een (rIN-CjI to tile J reSt, I nolians.
'111 44 ad. the solutloii to t1wir problem seeiiis to I)e tliiougli special iIIIIIII(ri-at loll jaw -;.
C,,Ill Ywl tell I]< Nvli.y You Nvajit t o solve tli(, problenis of U.S. citizens





73

through employment guarantees but solve the problems of the W~ Indians by increasing inn migration to the United States?
AmbasSador POPPER. As a. general rule under the treaty emp~loymfent assurances are for people, regardless of their nationality. Wts not correct that, no one will lose his job. However, in the treaty and the, legislation there are measures to insure, that there will be protection for those who choose to retire or who, for one reason or another in the shuffle of responsibilities from one ageiicy to another, don't have
-posit ionls.
Protection is afforded for American citizens through priority placemient in other U.S. Federal positions and through advantageous retirement benefits.
Protection would have to be appllied to Panamanians in a different way, but there are job protection guarantees throughout the treaty for both groups.
MS. HOLTZ.MAN. Thank you.
The gentleman from Texas.
Mr. HALL. Ambassador Moss, I notice on page 5 of your statement, in the third position, you indicate third and no less important, we must safeguard the interest of U.S. citizens who are canal employees. Recognizing their loyal service in the past and the tremendous need for them to continue to devote, their best work to the enterprise in the future--do I understand that is one of the paramount reasons why you think the United States should have 48.000 people eligible to come to this country?
Ambassador Moss. No, sir. The section that I was referring to concerned other provisions of the implementing legislation, such as the optional early retirement program.
Nevertheless, I think of the legislation which this subcommittee is considering as being in the nature of a safety net or escape valve just as the optional early retirement program. is the kind of things that give people the assurance they need to be happy with their situation and not simply to want to pick up and leave precipitously or not be able to put out their best efforts. I think this is a kind of a safety net for people who may need it.
Mr. HALL. None of these people are citizens of the United States, I take it?
Ambassador Moss. No, sir.
Mr. HALL. A lot of them that live in the Panama. area have lived there, the bulk of their lives.
Ambassador Moss. That is right.
Air. HALL. You say they have not become a part of the culture of Panama during all those years.
Ambassador Moss. That is right. By and large they were, the descendants of West Indians who camie tovhelp construct the canal. Their lives, work and ties were more to the United States than to the IRepublic of Panama, even though they' have never been here.
Mr. HALL. I didn't get an answer a moment ago. Do the bulk of these people live in the immediate area of the Panamna or do they live in the entire area?
Ambassador Moss. It is my understanding that the bulk of them live across the Canal Zone boundary line in the Republic of Panama,





74

hut they live in the vicinity of the canal and close to the canal where their 1)lare of work is.
I. HAl,. W hen11 this t1caty was signed was there diret language in the t reatvy that said that the pIeople that we are speaking of here today would \have the ri lit to co1e n11to Ithe 1 i1t(I States?
Ambassador Moss. No, sir. The treaty doesn't give them that right. We only made a promise to them to make our bhst effort to obtain such legislation.
Mr. I ITAL. Who made the promise?
AmIbassador Moss. The administration. I am not sure where the promise was first enunciated. Probably the treaty negotiators.
Mr. TLu. Is it in writing anywhere between the two countries that these people have the right to settle in the United States?
Ambassador Mss. No, sirl. There is no agreement between the two count ries to that effect.
Mr. tL Who initiated this idea that they come?
An tassador Moss. IThle idea wNas initiated by the administration after hearing the petitions of these people when they came to see the negotiators, and their employers. They pleaded(l that they deserved special treatment and needed special treatment simply because the treaties would change their lives in Nways they felt might harm them.
It was out of humanitarian concern and concern for good management that these provisions were put in the administration's implementing legislation for the treaties.
Mr. hALL. Is this request for admission based more on "humanitarian concerns" rather than any justification that would be to the best interests of the United States.
Ambassador Moss. I would justify it on two grounds. First, humanitarian. Also, I would say it is good management practice in that it does show employer concern for the employee. It shows employer recognition of valuable employee services.
In sonime cases, of course, it provides a direct benefit to family members of employees who are still there, thus directly affecting their morale. I think it is good management as well as humanitarian. I would not put it in the same category as refugees from a war-torn country or something which the United States had no part or interest in.
Mr. HALL. If you examine the sentence on page 5, "recognizing their loyal service in the past and the tremendous need for them to continue to devote their best work to the enterprise in the future," that would also apply to an illegal alien from Mexico, wouldn't it?
Ambassador Moss. It might apply toMr. hALL. Wouldn't it?
Ambassador Moss. I don't believe so. I think it might apply to the need to provide legislation to bring in aliens to perform work in the United(l States, something like that. We are not talking about illegal immigration at all. There was no movement I know of among these people to immigriate illegally into the United States.
Mfr. HAL.. The same language would apply ini both cases. We need for them to continue their best work in this country to the enterprise in the future.
I have serious reservations about this, Madam Chairman. I yield back the balance of Nmy time.
Ms. HoLTZm\aN. Thank you.





705

The gentleman from Virginia.
Mr. HARRIS. Thank you, Madam Chairman. I am pleased to be with you all again.
As we attempt to understand all the provisions here, the bulk of those that this law would apply to have not lived in Canal Zone; is that correct?
Ambassador POPPER. That is true.
Mr. HARRIS. The reference was made that this would be in recognition of service. Yet, this special immigration classification would apply to those who have just worked for the Panama Canal Company for I year.
Aii bassador POPPER. If they are resident in the Canal Zone, yes, Sir.
Mr. HARRIS. It would not apply to those who were outside the Canal Zone?
Ambassador POPPER. Those outside the Canal Zone, residing outside the zone, would have to have had 1 -a years of service by Oct ber 1 next. They would need to have retired or to be retired subsequently to be eligible.
Mr. HARRIS. It would not apply to them until they are retired if they lived outside the Canal Zone?
Ambassador POPPER. They would need at least 15 years service.
Ambassador Moss. I would like to make one observation. Retirees wouldn't be able to find housing in the Canal Zone because the housing is all owned by various U.S. Government organizations which leases -it, makes it available to current employees. That is the rea-son most of these retirees would be livinLy outside the Panama Canal zone.
Mr. HARRIS. You are saying the special immigration does not apply to the current employees of the Panama Canal Company, those who are not retired, who live outside, the Canal Zone, and who have served less than 15 years?
Ambassador POPPER. That is correct.
Mr. HARRIS. I just wanted to be sure that is correct on the record. That is correct?
Ambassador POPPER. Yes, Sir.
Mr. HARRIS. Both the administration and Mr. Murphy's bill would waive the public health requirements with respect to this special classification of immigrants. What exactly is being waived?
Ambassador POPPER. I would ask Colonel Rhode if he would respond to that question.
Colonel RHODE. Subparagraph 7 says:
Aliens not comprehended within any of the foregoing classes who are certified by the examining surgeon as having a physical defect, disease or disability when interpreted by the consul or immigration officer to be of such a nature that it might affect the ability of the alien to earn a living unless the alien affirmatively establishes that he would not have to earn a living.
Mr. HARRIS. So that regardless of any disease that the person affected might have, this would in no way interfere with his or her right to immigrate under these special provisions: is that correct?
Colonel RHODE. There are still other things that apPlv to him. If he is, mentally retarded, insane, have any type of mental defect, an alcoholic, other things listed here are not waived.
Mr. HARRIS. For the Purposes of the record, we better list those that are not waived. Alcoholics would still be barred from entry.




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Colon< I liiiE,.. Thiey are not waived, that is right.
Mr. 1Ii \Ius. Both bills also waive the requirement that the immigrant proxy ide someC proof that he or she will not become a public charge. T)),s this mean you anticipate that a number of these will not he able t present such proof and that we will in fact be permitting nWi.I"i ation of a number of people that will become public charges?
('olonel RHIoE. There are probably some who would want to imniigrat to the United States that would not have an income, I would suppose. The monthly average annuity for those retirees of the Panama Canal Company is $400. So if a former employee or an em)ployee with that amount of money had more than one dependent, then the waiver of public charge would be required.
Mr. HARIs. It would be anticipated then that a number of these would become public charges when they come to the United StatesV
Colonel RHODE. These are current employees or retirees. Retirees ihave an income and current employees have various skills ranging from linehandler to physician. I would have to provide that informafor the record as to the exact number.
Mr. HkRRIS. If I have any time left, I would like to ask one final question. This is a question I suspect may be gnawing at an awful lot of members of the subcommittee. I know it gnaws at me. Is it anticipated that Panama will actively violate human rights and discriminate against the people whose special immigration protection we are trying to achieve in this act?
Anb ador POPPER. NO, sir. The provision is not motivated by any expectation that Panama will violate the human rights of these people.
It is rather a question of cultural affinity, cultural tranquility, if I can use that word, for these people. It is their own fears and apprehensions which led them to request special treatment and which led us to proposed it.
Mr. ILimals. Are these fears you feel largely unfounded?
Ambassador POPPER. I feel that Panama's record is one of recent and very appreciable improvement in the area of human rights. It offers a good argument for further development of improved human rights practices. I would be optimistic about that. But even so this is, in a sense, an alien group culturally within the Panamanian population.
Ms. HOLTZ>MAN. Your time has expired.
The gentleman from Maryland.
Mr. BARNES. Thank you.
Could you just let inme know-I am a new member of the subcommittee-whether there are recent precedents for this action with respect to other employees of the U.S. Government? Is what we are asked to approve fairly common? What are some of the precedents?
Ambassador POPPER. I mentioned in my remarks that embassy employees and other long-time employees of the United States with 15 years or more of 3ervice can, in special circumstances, under recent law, be permitted to immigrate to the United States as a matter of special consideration. That is the closest and the only precedent I know for what is being proposed here.
The grounds for the proposal here will reside in the unique characteristics flowing from the authority we have exercised in operating the Panama Canal.





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Mr. BARNES. I am confused at the, rationale for the distinction. As T understand your explanation, employees who have worked for 1 year and lived within the zone would come within the ambit of the new legislation.
But if you happened to live outside the zone, you would have had to work for 15 years. If what we are talking about. is the humanitarian response to reward employees for their service, what is the rationale for distinction ?
Colonel RHODE. The 1,000 or so we have living in the zone are generally the direct descendants of the West Indian employees that came over to help dig the Canal many years ago and are either second or third generation Canal Zone residents. As Ambassador Moss mentioned, many of them at this time don't speak any Spanish. They have been going to schools in the Canal Zone where only English is taught.
I am told a number of them have never been to Panama outside Ollie Canal Zone which is a 10-mile strip across the isthmus. For that group, we want to insure that they have the right to immigrate, to the U.S.
Mr. BARNES. Just so I understand, you are going to provide subcommittee the numbers that the Chair read earlier.
You are not sure whether those are accurate or not.
Colonel RHODE. I have not done a survey as to how many could come under current law. We will do that. I will provide that for the record.
Mr. BARNES. Thank you very much.
Ms. HOLTZMAN. The gentleman from California.
Mr. LUNGREN. Thank you, Madam Chairman.
I apologize for not having been here, for the whole testimony. I ho-oe I won't go over things that have already been said. If I do, I hope you will bear with me.
I would have to say at the outset that hearing about this particular aspect of the Panama Canal Treaty is another manifestation, to me, of a treaty that was supposed to give us no problems whatsoever finan-cially or in any other way.
Evei y time I turn around, we in the Congress are looking af
other aspect. With respect to this particularly, I am very colic er,. r''Cli because we are dealing in this subcommittee with an -extremely d,-Lfficult problem, and that is of the refugees from Southeast, sia, many who have been in camps for as long as 4 years.
We are trying to increase the numbers that can be allowed into this country. It brings to me the question of priorities. What are we doing with this legislation?
. Aren't we, jumping the gun with this? I heard someone say there is no evidence that they will have their human rights violated.
I hope that is true, although I have serious doubts about it. You gentlemen know more about it 4- than I.
If that is the case, is this the type of legislation we need in terms of priorities when dealing with refugees from Southeast Asia .
Which in an of itself will be a complex problem and one we have to address immediately.
AmbassadorPOPPER. I won't for a minute dispute the priorities you attribute to Southeast Asian refugees. We are aware of their problems and needs and commend the Congress for the things it's doing in response to those needs.





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This is obviously an entirely different sort of situation. It's a unique situation in which it is, we think, important from the humanitarian and managerial standpoint to protect the rights of a group which served the United States well by its labor and devotion over generations. It's on that basis we come io the Congress with these provisions.
Mr LUNGnR I thought the administration's position was the Goveminent in Panama represents the interests of the people there, and it is better for us to turn the canal over to them and not have to worry about some of these questions that some of us brought up earlier.
Now, you are telling me we have to worry about those things.
Ambassador PorPrn. I don't think we ever thought the treaty would solve all the problems involved in this complex matter.
Mr. Lu NGREN. I have yet to see a problem it has solved.
Ambassador POPPER. We do believe that the legislation should include this special immigration element, in consideration of this partictular problem of a special character which is not duplicated anywhere else.
Ambassador Moss. As I stated before, we also have management interests apart from the humanitarian interests. These individuals hav ben U.S. employees. In addition, a number of family members as well as families of some of the people who immigrate here may still be U.S. employees.
The speelial immigration provision is important as a signal. It reflects employer concern for the welfare of their employe-es and for the motivating factor in their future work. We have an interest which puts this apart from your usual humanitarian considerations concerning immigration for refugees.
Mr. LUNGREx. I heard what. you said. But I do not quite understand the management interest. When someone is employed by the United States in a foreign country, do we have an obligation to bring him to the United States to show him we are good employers?
Ambassador Moss. I meant as an incentive to good employee relations in a particular situation. It certainly is not an obligation. I would never say that. In this particular situation, with this group of people, and with this particular set of concerns, I would advocate the principle. It's not only supportable on humanitarian grounds, but also on good management grounds.
Mr. LUNGREN. NO further questions, Madam Chairman.
I yAield back my time.
Ms. IOLTZMAN. Thank you very much.
Let me go over some other questions. With regard to the management problem here, we don't know of those 20 percent who indicated they wanted to come to the United States or might want to come, how many of them are present employees and how many are retirees, (1do we?
Colonel Ruoi)E. No; I don't, but I believe that it is fair to assume that we are talking about 20 percent across the board.
Ms. HOLTZMAsN. Could you get that information for the record? Colonel RHODE. Yes.
Ms. ThTZAs. Second, there is nothing to prevent the new company which will take over the management of the canal from using its best efforts to provide employees with jobs; is that correct?
Ambassador Moss. They are required to do so in the case of em-





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employees whose, jobs will be retained by U.S. organizations such as the Panama Canal Commission. They would be kept on the payroll.
Ms. HoLTzMAN. What harm do you see if this committee were to recommend no action on such a provision at this time on the grounds, first, that most of the people would qualify in any case under the, existing law, second, that there is no indication in the record that these people would suffer any discrimination, and, third, that it may well be their employment problems can be solved under the implementing legislation with regard to the treaty?
What specific harm would you see?
Ambassador Moss. I would see specific harm in employee morale, particularly since a number of these employees have families who would feel affected and would feel Washington had abandoned them. They have worked for the U.S. Government for generations.
Ms. HoLTz1VJ:AN. We established that those people would qualify tinder existing law.
Ambassador Moss. It might be more diffic It and time-consuming to qualify.
MS. HOLTZMAN. But they could. The State Department has the authority to make a finding of "exceptional circumstances" in order for them to immigrate.
Ambassador Moss. I am not an expert in immigration law but I am not sure emergency conditions could be said to apply to their situation.
What we are asking for here is legislation which would provide entry to the United States on more flexible terms than the present law would allow and make it easier for them
Ms. HoLTzMAN. Do you think that ':exceptional circumstances," warranting a recommendation to confer special immigrant status under current law, exist with respect, to the non-T-T.S. citizen employees in Panama?
Ambassador Moss. That would be a question of judgment as to how exceptional they would be in light of precedents. I am not expert in the application of that statute.
Ms. HoLTzMAN. Do any of my colleagues have any further questions ?
Well, let me say that we very much appreciate your coming before the subcommittee. I am sori y things had to be as rushed as they were, but I think we got the full benefit of your testimony. We would appreciate seeing the additional information for the record.
Thank you very much.
FDiscussion off the record.]
Ms. HOLTZMAN.On the record.
I would like to ask unanimous consent to proceed to consideration of H.R. 1716.
Is there objection?
The Chair hears none. Clerk will commence to read.
Mr. ENDRES. H.R. 1716, a bill to implement the Panama Canal Treaty of 1977 and related agreements and for other purposes. Be it enacted by the Senate and House of Representatives of America in Congress assembly. that it is the purpose of this act to provide legislation necessary to or desirable forMr. HALL. I ask unanimous consent further reading of H.R. 1716 be dispensed with.






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Ms. HOrzLMArN. Is there objection?
Hearing none, the further reading will be dispensed with.
Members of the subcommittee, let me say first that I appreciate your attendance at this meeting.
Second, I also appreciate the fact that you are willing to do the markup quickly. Since most of the members were here to hear the testimony, I think we can act responsibly on this legislation.
My recommendation would be that we report unfavorably on the special immigration section on the ground basically that no immediate need was shown for this legislation.
We can always act on this matter should an emergency develop or should there be a serious problem with regard to these people.
We could do so in the ordinary course. According to the testimony, there is nothing in the treaty itself that requires any action on the special immigration provisions. I would say for that reason we ought to report unfavorably on the legislation at this time.
In fact, I will make that motion so we can have debate on the issue.
Anyone else wish to be heard?
The gentleman from Virginia.
Mr. HARRIS. Madam Chairman, as we have gotten to these various aspects of the legislation, I have been privileged to have responsibility for various aspects of the legislation.
It's extremely complicated. It seems to me the chairperson's notion of reporting out the judicial aspects of this bill has a great deal of merit.
The immigration aspects seem to be so broad and difficult to give proper consideration to-I realize we are under a time constraint.
I don't think the subcommittee can give proper consideration today to the immigration provision.
I suppose that adds up in my mind to supporting the chairperson's recommendation that we go ahead and report out the judicial aspects of the bill favorably, and it seems to me the subcommittee should continue to consider the other aspect perhaps with the notion that we can handle that at a later date.
Ms. HOLTZMAN. The gentleman from Texas.
Mr. HALL. So I understand what we are doing, are we omitting section 410 in its entirety beginning on page 56?
Ms. HOLTZMAN. That's bill 1716.
Mr. ENDRES. That's correct. I think your motion is to report unfavorably on section 410 and favorably on the other sections in title IV.
Mr. HALL. The special immigration area. We are talking about section 410, are we not, in its entirety?
Mr. ENDREs. Yes.
Ms. HOLTZM.AN. That's correct. I would also like to introduce in the record at this point a letter from the gentleman from Wisconsin, the chairman of the Subcommittee on Courts, saying in essence that he has no objection to the sections dealing with the court's in this legislation.
The gentleman from Virginia.
Mr. BUTLER. That is very nice, but I suspect he does not know much more about it than we do. I think your suggestion with reference to section 410 is well taken but I am not sure that there is any great urgency in the judicial provisions either.
It seems to me that if MAr. Kastenmeier's subcommittee will abdicate





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their responsibility in this area, then we have a real responsibility to go into it.
I do confess that I was late but I understand we did not, take any evidence on the judicials' provisions today. I simply would prefer that we at least make a record on it; it's the appropriate thing to do.
A letter from Mr. Kastenmeier does not satisfy my curiosity in this regard.
If the chairwoman insists on her position, I would like to separate the motion.
Ms. HOLTZMAN. I would say frankly to the gentleman from Virginma, I would not object to a separation of the question. In fact, if it's the concern of the members of this subcommittee, we could make no recommendation with regard to the court's legislation. But staff has analyzed the court's provision and could briefly enlighten the gentleman from Virginia if you would like.
Mr. BUTLER. I read the memorandum. It enlightened me. to the degree that I think we ought to think about it.
MS. HOLTZMAN. Is there any further discussion on the motion ?
The gentleman from California.
Mr. LuNGREN. Madam Chairman, with respect to section 410, I would like to support the motion and reiterate and echo what was said. which is that we have absolutely no testimony here, no evidence here, nothing to support the need for such legislation at the present time. I think the question of priorities is extremely important when we are dealing with the question of admitting aliens into this country from a section of the world in Southeast Asia which will undoubtedly bring up a series of questions as to the numbers and those who will be allowed in. I think we will cloud the issue if, at the same time, we report legislation out of subcommittee which could conceivably have as many as 48,000 aliens entering this country when there does not appear to be any need whatsoever for additional legislation.
MS. HOLTZMAN. Does anybody else wish to be heard?
Since the gentleman from Virginia asked for a, division of the question, why don't we vote on the first part of the motion?
This is to report unfavorably on section 410 of H.R. 1716.
All in favor, say "aye." [Chorus of ayes.]
Opposed no. [No response.]
The motion is unanimously agreed to.
The second question occurs on the balance of the motion which is to report favorably on section 2 in title V and the remainder of title IV.
Mr. BUTLER. Section 2 in Title V-502.
Ms. HOLTZMAN. 502?
Mr. D'UVA. These are the general provisions amending the, United States Code and Canal Zone Code to conform with the treaty. Section
2 begins on page 4. Page 4 of H.R. 1716.
Ms. HOLTZMAX. And goes through where?
Mr. D'UvA. Through line 14 of patxe 6.
Ms. HOLTZMAN. Why are we required to act on this? What does this have. to do with the court system ?
Mr. ENDRES. The parliamentary system is such this was referred to four committees. Those sections of the bill refer to the Judiciary Committee and required to be acted upon by April 10 are section 2 dealing with definitions and title V dealing with miscellaneous other provisions of the bill.





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Mr. BUTLER. If I may inquire of counsel, what is the urgency that we do this today?
Mr. EmrRs. This administration bill, H.R. 1716, has been divided and the various titles referred to four separate committees. The referral deadline to this committee is April 10. We are required to report on these sections I mentioned bv April 10. That means it must be reported by the committee, and the committee report nust he filed by April 10, or else the committee will be discharged from consideration of the bill.
Mr. BUTER. That is blackmail. That is fine if they have set up a schedule. I am perfectly willing to let them go forward without. me, rather than say I have looked into this, and I approve it.
If we (1do not meet the deadlines, other than having incurred the wrath of several other committee chairmen and things like that, what about the great world of relations between the people this is concerned with and the people in Panama and things of that nature?
Are we jeopardizing their rights or anything else by not meeting this deadline?
Mr. ENDRES. As I said, if the committee does not act, the committee will simply be discharged from consideration, and it will go to the floor with the recommendations of other committees who do report on the legislation.
Mr. HARRIs. Does the gentleman yield on that point?
Mr. BUTLER. My pleasure.
Mfr HARMS. I have worked on this legislation in other committees. If the committee didn't act on this, it would go to the floor the way the bill was introduced with the committee's recommendations on it. So our failure to act under this sequential referral would simply mean the bill and titles we had judisdiction over would go to the floor without our recommendation-410, for example, would continue to be on the floor, if we failed to act today.
This is a point I thought my colleague would want to take cognizance of.
Mr. BUMTLER. I thank the gentleman. I think I was aware of that. Just the same, I do not think we are prepared to give our blessing to this legislation without going into it more thoroughly. Maybe we owe it to the other committees to take some evidence on this and go into it, in order to meet that deadline, but if there is no urgency about it, I would just as soon let it happen as to say I think it is sound.
That is my reason for saying that we ought to go into it rather than just passing it out with such speed.
Ms. HolrZAN. Any other discussion on this? The gentleman from California.
Mr. LrNGREN. The only thing I would like to say is that I, too, do not feel I am really prepared to vote on these other sections of the bill. I had a bit of background on this. We took some testimony on the section we already voted on, but I feel I would be voting in the dark on this.
I think that is the complaint Mr. Butler registered, and I would like to say that is the complaint I would resister at this time. It's hard to vote on something you do not know much about, and I would not want to mistakenly vote to approve it, if it turns out that is not what I want to do, nor would I like to hold it up if, upon reflection, I would be able to vote for it.





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Mr. HARRIS. Really, if the vote carries, it will mean that this title will be in the bill. If the vote fails, it will mean this title will be in the bill. [Laughter.]
I wanted to explain it that way, because it might set-my colleague grasps these sorts of points awfully quickly. The provision in the bill with regard to the courts is a sound provision. I feel it's important that we go ahead and vote on it. But even if the vote failed to carry, the provision would still be in the bill. So I would say we go ahead and vote on it one way or the other.
MS. HIOLTZMAN. I would say to my colleagues that I do share concern with respect to section 2 with regard to the definitions. The subcommittee hasn't taken any testimony about the significance of those definitions.
Second, with regard to the health sections, miscellaneous provisions in title V. I can't tell you I understand the implications of those. But I have read the balance of the provisions in title IV regarding courts and related functions and have no objection to them and -am prepared to support them.
If the gentleman from Virginia wants to separate the question, we can vote as he wishes.
Mr. BUTLER. Obviously, the entire committee hasn't fallen under the spell of my logic here. I would like to suggest for a moment that I am not clear as to what the. effect of this is on the right of private civil actions during the transition period.
I am not smart enough to know what the rights are now. But I understand the U.S. courts do not have jurisdiction to hear new private civil actions after entry into force of this treaty.
I would like to know what happens now, and what are the civil and criminal rights of the people.
Ms. HOLTZMAN. Do you want staff to respond briefly?
Mr. BUTLER. Yes.
Mr. D'UvA. The treaty provides that the United States will not have jurisdiction over civil cases which arise after its entry into force. The implementing legislation cannot, provide jurisdiction where the treaty does not.
Mr. BUTLER. The in-force date of the treaty for those purposes is what? We are talking about the date the treaty goes into force.
Mr. D'UvA. October 1, 1979.
Mr. BUTLER. October 1. When does the 3O-month transition period start?
Mr. D'UVA. October 1, 1979.
Mr. BUTLER. Where did I get the idea it was April 1? 'Well, I must have been mistaken about that. With regard to the time prior to the effective date, would citizens of the United States residing in this area have civil rights in the existing territorial courts for any cause of action which arise between them?
Mr. D'UvA. In the U.S. District Court for the District of the Canal Zone.
Mr. BUTLER. Is that what we call a territorial court?
Mr. D'UvA. It's not a territorial court, because the CIanal Zone is not a territory of the United States.
Mr. BUTLER. Is it an article 3 court?
Mr. D'U-vA. It's a legislative court.




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Mr. BitLER. An artcl e 1 court? Mr. D'UvA. Yes.
Mr. BTnER. You mean a provision of the United States Codel
Mr. I)'UCA. The 1903 treaty between the United States and the Republic of Panama gave the United States jurisdiction over areas within the Canal Zone. I wonder if I could get some advice on this.
Mr. Brum. I am not going to be hard to get along with. I would not vote for it and do what you want; you understand why I am doing it, and I understand why you are doing it. I would like to know the answer to the question.
Ms. IOLTZMAN. Can you identify yourself for the record? Mr. FORTUNE. I am Terrence Fortune. I am an attorney-adviser with the Office of the Legal Advisor, Department of State.
Mr. BIULER.We have an existing court system which is an article 1 court in Panama. That adjudicates, among other things, the rights between citizens of the United States in Panama and the right of those people to litigate their actions for causes of action arising after the effective date of the treaty even during the transition period for civil actions is terminated; is that true?
Mr. FORTUNE. That is true. Civil actions which are pending upon the effective date of the treaty will be adjudicated by the existing court systems during the 30-month transition period, but those courts will have no jurisdiction to hear any civil cases arising after the effective date of the treaty.
Mr. HRRTS. I think I can help the colleague and the subcommittee if my colleag ue will yield on this.
We have taken action by the previous motion to report unfavorably on the immigration section. It seems to me with the-it's a real dilemma. I listened to my colleague from Virginia. The committees could report out the other section without recommendation and that way clear the subcommittee and let it go at that.
I would move we amend the motion to report these sections out without recommendation. The remaining sections, section 2, balance of title IV and title V.
Mr. HARRIS. Yes.
Ms. HOLTZMfAN. Except for the section 503(b) reference to section 410.
Mr. HARRIs. Right.
Ms HOLTZMyAN. The question occurs on the motion of the gentleman from Virginia.
Those in favor say "aye."
[Chorus of ayes.]
Those opposed ?
[No response.]
The motion is carried.
The question occurs on the original motion as amended.
Those in favor say "aye."
[Chorus of ayes.]
Those opposed?
No response.]
Motion carried unanimously.
Our consideration of IT.R. 1716 is concluded.
[Whereupon, at 2:33 p.m., the meeting of the subcommittee was adjourned.]











APPENDIXES

APPENDIX 1-Statements submitted for the record in support of H.R. 1716

STATEMENT OF Ho.N. JOHN M. MURPHY. CHAIRMAN, COMMITTEE ON '.NIERCIIANT MARINE AND FiSHERIEs-APRIL 3, 1979
I appreciate the opportunity to appear here today to discuss with you the provisions of title IV of H.R. 1716, the bill to implement the Panama Canal Treaty of 1977 introduced by me, Chairman Rodino, and other chairmen on Janu, r, 31 based on the draft submitted by the Executive branch. As you know On anuary 15 1 had previously introduced H.R. 111, a bill to provide for operation of the Panama Canal tinder the provisions of the 1977 treaty which bill embraces the same subject matter as the administration bill, but H.R. 111 differs from the provisions of title IV of H.R. 1716 in certain important respects, and I would like to point out these differences and commend the provisions of H.R. 111 to your consideration as amendment of H.R. 1716.
Section 1516 of H.R. 111 originally followed closely the language of section 407 of H.R. 1716, and authorized the President to abolish one or both of the two magistrates courts now established in the canal zone. As a result of hearings in the canal zone by the subcommittee, however, the section was amended to limit the authority of the President to the elimination of only one of such courts. If, both courts are abolished, preliminary hearings in the magistrates courts would be eliminated and all criminal proceedings would commence by complaint in the District court.
The subcommittee considered the right to a preliminary hearing to be of such basic importance that it should be preserved and so amend(,d the bill. The amendment similarly preserves the right of appeal to a local district court oii conviction in a court of limited jurisdiction of charges of insufficient gravity to be heard in the district court under the present law.
Section 409 of H.R. 1-16 vests any authority necessary to the exercise of the rights of the United States during the transition period in the Panama Canal Commission. Section 1516 of H.R. 111 vests this authority in the President, an assignment more appropriate to the importance of the power in view of the treaty provisions making the rights and responsibilities involved those of the United States Government as a whoh-.
Section 1532 of H.R. 111 establishes an Office of Ombudsman in the Panama Canal Commission to receive complaints, grievance requests and suggestions from employees of the Commission and their dependents. The function of the Ombudsman is advisory only, but on the basis of facts developed at hearings in the Canal Zone, the Panama Canal Subcommittee of the Merchant Marine and Fisheries Committee was convinced that such an Office would well serve the interests of the United States in the difficult circumstances that will confront employees engaged in the operation of the canal during the transition period and thereafter. I urge you to consider the inclusion of a similar provision in H.R. 1716.
Finally, section 1611 of H.R. 111 follows generally the provisions of section 410 of H.R. 1716. However, the Panama Canal Subcommittee has amended that section by adding a new subsection subparagraph "G" in section 101 (a) (27) of the Immigration and Nationality Act. This subparagraph includes in the definition of "special immigrant" an immigrant from Panama who has been an employee of the Panama Canal Company or Canal Zone Government Act who is not a resident in the Canal Zone on the effective date of the exchange of ratifications of the 1977 treaty. This provision would of course substantially enlarge the number of immigrants eligible to enter as special immigrants. However, the contribution of noncitizen employees in the construction and operation of the canal has been so significant, and the privilege of immigration to the United States by such former employees is held in such high esteem., that 1
(95)

45-988 0 79 7






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consider the extension of the privilege in the manner to be definitely in the interest of the United States.
As this subcommittee knows, a large percentage of the non-United States citizens who have been employed by the Canal Authority since 1914 were original builders of the Panama Canal or descendants of those builders. Many of the canal builders were of Caribbean origin. In the period since their residence on the Isthmus of Panama, they have been an ethnic group which maintained in considerable degree their antecedent social mores, and many have retained English as a primary language. I need not go on at great length to discuss the dangers and hardships and even discrimination in Panama to which Panamanian and West Indian employees of the Canal Organization have been exposed. Their contributions have been documented in such volumes as David McCullough's Path Between the Seas, as well as several other works.
The affinity of the non-U.S. employees for United States Customs, the allegiance of the non-U.S. citizen employees to the United States in time of peace and war, and the plight of these persons who have worked and in many cases lived under United States law for a lifetime but are now without that framework, demands special attention. The United States has opened its doors in recent years to persons from several countries who have been thrown inder suppressive rule. The circumstances of canal employees are quite different than those of the Vietnamese or Cambodian people, but neither of these peoples have served the United States so long or so intensely as have the canal employees who are non-United States citizens. Providing special immigration privileges for these employees is fair and in accordance with our interests in Panama.
Before concluding let me emphasize the importance of the transition period and the transition period authority contained in title IV of H.R. 1716. In the two visits which members of the committee have made to the Isthmus of Panama in the last two months, it has become clear that the 30-month transition period will be the acid test of the real strength of the new treaty arrangement. The treatment of U.S. citizens by the Government of Panama and the efficiency of canal operations during that period will set the tone for the remaining years of the twenty-year relationship. By the end of the transition period we will know whether an adequate number of U.S. citizens remain on the isthmus in order to efficiently operate the canal. My comments, then are directed toward this subcommittee in order to make you aware of the criticality of the period for which you are providing legislation.
I thank the subcommittee for the opportunity to present my views.

STATEMENT OF HoN. MICHAEL BLUMENFELD, DEPUTY UNDER SECRETARY OF THE ARMY
I regret that I am unable to testify today before this Committee on the Administration's proposed legislation to implement the Panama Canal Treaty of 1977 : however. I appreciate the opportunity to make a statement on the immigration issue this ( nmittee has before it.
As you know, there are three categories of employees or former employees addressed in the proposed legislation. The first category, non-U.S. employees of the Panama Canal Company or Canal Zone Government residing in the Canal Zone with one year or more of service, would number approximately 1,000. With their ,000 dependents, who also would be eligible for immigration, the total would be approximately 7,000.
The second category, Panamanian nationals who have been honorably retired from United States Government employment in the Canal Zone after having had 15 years or more of service, would total about 4,500. 1With their estimated 9.000 dependents, this category totals about 13.500.
Lastly, the third category is comprised of 1,tanm:vi f nationals employed by the Canal Zone (or former ('anal Zone) who have 15 ye,. s of service as of the treaty date, and later retire. We estimate thait their tr< ~1 such employees. With their 22.(40 deenldents, the category wolil tot &. 27 500 people.
The grand total, -h ,refore, would bo 11.000 employe Y with their 37.000 del)end'ens, would v.ke fo(r a rand iotal of 4.(0 ,O iole juimigrants under

We have n,, a:n of stimating what proportion of that 48,000 people would in fa:t end up immnigrating. A, a -'ess, I would think that somewhere between I0 aiid 20 ?,t keni would rights
10 anuI 20 p ean~i wouh(I exercise eligibility rights. These em ploywes r:prsent di e skills ranging from unskilled linehandler, nelper and boatman wc ; nations toi skilledl professionals. Lelude(,d in this group






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are 37 non-U.S. citizen physicians. Of these, 14 reside in the Zone and two, although not residing in the Zone, have fifteen or more years service; thus, some 43 percent of the physicians presently employed could become eligible for special immigrant status.
As indicated, many of our dedicated employees reside outside the Canal Zone, not by virtue of their own decisions but because of the Canal Enterprise's lack of housing. The location of the residence of our employees is not, in our view, a valid indicator of service, and thus should not be the criterion upon which to waive the public charge provision. Likewise, retirees may have resided within the Zone for long and dedicated careers. Their prior retirement and forced departure from Canal Enterprise housing within the Zone again should have no bearing upon the public charge waiver. We have proposed, and employees have been informed through the required labor consultation process, that the waiver of public charge would apply to all three categories.
The proposed legislation on immigration was very carefully developed in order to balance our obligations to dedicated employees with our need to minimize the number of individuals eligible to immigrate. The concern and the need for special immigration is focused on the West Indians; but it is difficult, if not impossible, to write legislation which will apply only to employees of specified ethnic descent. What we really want to do is ease problems of people who are least assimilated into the Panamanian culture and society.
If the public charge portion of the Immigration and Nationality Act is not waived, this would effectively preclude approximately half of 'our current retirees, and many of our current employees with more than 15 years of service who later retire, from exercising the special immigrant option at all. This would contravene the spirit and basic intent that generated the inclusion of the special immigrant status in the implementing legislation. The approval of this provision with its recommended limitation to the transition period would constitute an appropriate expression of appreciation by the U.S. Government for the contribution made by these loyal employees, many of whose ancestors partieipated in the construction of the waterway. Therefore, I urge the Committee's support in including the provisions of the immigration portion in the implementing legislation.
Thank you.
APPENDTx 2

PANAMA CANALTREATY

The United States of America and the Republic of Panama,
Acting in the spirit of the Joint Declaration of April 3, 1964, by the Representative-s of the Government of the United States of America and the Republic of Panama, and of the Joint Statement of Principles of February 7, 1974, initialed by the Secretary of State of the United States of America and the Foreign Minister of the Republic of Panama, and
Acknowledging the Republic of Panama's sovereignty over its territory,
Have decided to terminate the prior Treaties pertaining to the Panama Canal and to conclude a new Treaty to serve as the basis for a new relationship between them and, accordingly, have agreed upon the following:

ARTICLE I
ABROGATION OF PRIOR TREATIES AND ESTABLISHMENT OF A NEW RELATIONSHIP
1. Upon its entry into force, this Treaty terminates and supersedes:
(a) The Isthmian Canal Convention between the United States of America and the Republic of Panama, signed at Washington, November 18, 1903;
(b) The Treaty of Friend ship and Cooperation signed at Washington, March 2, 1936, and the Treaty of Mutual Understanding and Cooperation and the related Memorandum of Understandings Reached, signed at Panama, January 25, 1955, between the United States of America and the Republic of Panama;
(c) All other treaties, conventions, agreements. and exchanges of noteg between the United States of America and the Republic of Panama concerning the Panama Canal which were in force prior to the entry into force of this Treaty; and
(d) Provisions concerning the Panama Canal which appear in other treaties, conventions, agreements and exchanges of notes between the United States of






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America and the Republic of Panama which were in force prior to the entry into force of this Treaty.
2. In acor(dance with the terms of this Treaty and related agr-eements, the ReIpublic of Panama, as territorial sovereign, grants to the United States of America, for the duration of this Treaty, the rights necessary to re-gulate the transit of ships through the Panama Canal, and to manage, operate, maintain, improve, protect andl defend the Canal. The Republic of Panama guarantees to the United States of America the peaceful use of the land and water areas which it has been granted the rights to use for such purposes pursuant to this Treaty and related agreements.
3. The Republic of Panama shall participate increasingly in the management and protection and defense of the Canal, as provided in this Treaty.
4. In viewV of the special relationship established by this Treaty, the United States of America and the Republic of Panama shall cooperate to assure the uninterrupted and efficient operation of the Panama Canal.

ARTICLE II
RATIFICATION, ENTRY INTO FORCE, AND TERMINATION
1. This Treaty shall be subject to ratification in accordance with the constitutional procedures of the two Parties. The instruments of ratification of this Treaty shall be exchanged at Panama at the same time as the instruments of ratification of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, signed this date, are exchanged. This Treaty shall mter into force, simultaneously with the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, six calendar months from the date of the exchange of the instruments of ratification.
2. This Treaty shall terminate at noon, Panama time, December 31, 1999.

ARTICLE III
CANAL OPERATION AND MANAGEMENT
1. The Republic of Panama. as territorial sovereign, grants to the United States of America the rights to manage, operate, and maintain the Panama Canal, its complementary works, installations and equipment and to provide for the orderly transit of vessels through the Panama Canal. The United States of America accepts the grant of such rights and undertakes to exercise them in accordance with this Treaty and related agreements.
2. In carrying out the foregoing responsibilities, the United States of America may :
(a) Use for the aforementioned purposes, without cost except as provided in this Treaty, the various installations and areas (including the Panama Canal) and waters, described in the Agreement in Implementation of this Article, signed this date, as well as such other areas and installations as are made available to the United States of America under this Treaty and related agreements, and take the measures necessary to ensure sanitation of such areas;
(b) Make such improvements and alterations to the aforesaid installations and areas as it deems appropriate, consistent with the terms of this Treaty;
(c) Make an d enforce all rules pertaining to the passage of veslses through the Canal and other rules with respect to navigation and maritime matters, in ae()rdance with this Treaty and related agreements. The Republic of Panama ill lend its operationo, when necessary, in the enforcement of such rules;
(d Establish, modify, collect and retain tolls for the use of the Panama Canal, and other charges, and establish and modify methods of their assessment;
(e) Regulate relations with employees of the United States Government;
( f) Provide supporting services to facilitate the performance of its resIonsibilities under this Article;
() Issue and enforce regulations for the effective exercise of the rights and responsibilities of the United States of America under this Treaty and related agreements. The Republic of Panama will lend its cooperation, when necessary, in the enforcement of such rules; and
(h) Exercise any other right granted under this Treaty, or otherwise agreed ui~n lt(,IIeI the t N Parties.
3. Pursuant to the foregoing grant of rights, the United States of America shall, in accordance with the terms of this Treaty and the provisions of United




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States law, carry out its respond si bili ties by means of a United States Government agency called the Panama Canal Commission, which shall be constituted by and in conformity with the laws of the United States of America.
(a) The Panama Canal Commission shall be supervised by a Board composed of nine members, five of whom shall be nationals of the United States of America, and four of whom shall be Panamanian nationals proposed by the Republic of Panama for appointment to such positions by the United Stqf-(- of America in a timely manner.
(b) Should the Republic of Panama request the United States of America to remove a Panamanian national from membership on the Board, the United States of America shall agree to such request. In that event, the Republic of Panama shall propose another Panamanian national for appointment by the United States of America to such position in a timely manner. In case of removal of a Panamanian member of the Board at the initiative of the United States of America, both Parties will consult in advance in order to reach agreemel.A concerning such removal, and the Republic of Panama shall propose another Panamanian national for appointment by the United States of America in his stead.
(e) The United States of America shall employ a national of the United States of America as Administrator of the Panama Canal Commission, and a Panamanian national as Deputy Administrator, through December 31, 19S9. Beginning January 1, 1990, a Panamanian national shall be employed as the Administrator and a national of the United States of America shall occupy the position of Deputy Administrator. Such Panamanian nationals shall be proposed to the United States of America by the Republic of Panama for appointment to such positions by the United States of America.
(d) Should the United States of America remove the Panamanian national from his position as Deputy Administrator, or Administrator, the Republic of Panama shall propose another Panamanian national for appointment to such position by the United States of America.
4. An illustrative description of the activities the Panama Canal Commission will perform in carrying out the responsibilities and rights of the United States of America under this Article is set forth at the Annex. Also set forth in the Annex are procedures for the discontinuance or transfer of those activities performed prior to the entry into force of this Treaty by the Panama Canal Company or the Canal Zone Government which are not to be carried out by the Panama Canal Commission.
5. The Panama Canal Commission shall reimburse the Republic of Panama for the costs incurred by the Republic of Panama in providing the following public services in the Canal operating areas and in housing areas set forth in the Agreement in Implementation of Article III of this Treaty and occupied by both United States and Panamanian citizen employees of the Panama Canal Commission: police, fire protection, street maintenance, street lighting, street cleaning, traffic management and garbage collection. The Panama Canal Commission shall pay the Republic of Panama the sum of ten million United States dollars ($10,,000,000) per annum for the foregoing services. It is agreed that every three years from the date that this Treaty enters into force, the costs involved in furnishing said services shall be reexamined to determine, whether adjustment of the annual payment should be made because of infl,"Ition and other relevant factors affecting the cost of such services.
6-. The Republic of Panama shall be responsible for providing, in all areas comprising the former Canal Zone, services of a general jurisdictional nature such as customs and immigration, postal services, courts and licensing, in accordance with this Treaty and related agreements.
7. The United States of America and the Republic of Panama shall establish a Panama Canal Consultative Committee, composed of an equal number of highlevel representatives of the United States, of America and the Republic of Panama, and which may appoint such subcommittees as it may deem appropriate. This Committee shall advise the United States of America and the Republic of Panama on matters of policy affecting the Canal's operation, In view, of both Parties' special interest in the continuity and efficiency of the Canal operation in the future, the Committee shall advise on matters such as, general tolls policy, employment and training policies to increase the participation of Panamanian nationals in the operation of the Canal. and international policies on matters concerning the Canal. The Committee's recommendatiom-'; -11,111 be tnansmitted to the two Governments, which -,,hall give such recommendations full consideration in the formulation of such policy decisions.







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8. In addition to the participation of Panamanian nationals at high management levels of the Panama Canal Comiission, as provided for in paragraph 3 of this Article, there shall be growing participation of Panamanian nationals at all other levels and areas of employment in the aforesaid commission, with the objective of preparing, in an orderly and efficient fashion, for the assumption by the Republic of Panama of full responsibility for the management, operation and maintenance of the Canal upon the termination of this Treaty.
9. The use of the areas, waters and installations with resxct to which the United States of America is granted rights pursuant to this Article, and the rights and legal status of United States Government agencies and employees operating in the Republic of Panama pursuant to this Article, shall be governed by the Agreement in Implementation of this Article, signed this date.
10. 1Upon entry into force of this Treaty the United States Government agencies known as the Panama Canal Company and the Canal Zone Government shall cease to operate within the territory of the Republic of Panama that formerly constituted the Canal Zone.
ARTICLE IV
PROTECTION AND DEFENSE
1. The United States of America and the Republic of Panama commit themselves to protect and defend the Panama Canal. Each Party shall act, in accordance with its constitutional processess, to meet the danger resulting from an armed attack or other actions which threaten the security of the Panama Canal or of ships transiting it.
2. For the duration of this Treaty, the United States of America shall have primary responsibility to protect and defend the canal. The rights of the United States of America to station, train, and move military forces within the Republic of Panama are described in the Agreement in Implementation of this Article, siLnel this date. The use of areas and installations and the legal status of the armed forces of the United States of America in the Republic of Panama shall be governed by the aforesaid Agreement.
3. In order to facilitate the participation and cooperation of the armed forces of both Parties in the protection and defense of the Canal, the United States of America and the Republic of Panama shall establish a Combined Board comprised of an Nual number of senior military representatives of each Party. Thebe representatives shall be charged by their respective governments with consulting and cooperating on all matters pertaining to the protection and defense of the Canal, and with planning for actions to be taken in concert for that purpose. Such combined protection and defense arrangements shall not inhibit the identity or lines of authority of the armed forces of the United States of America or the Republic of Panama. The Combined Board shall provide for coordination and cooperation cncerning such matters as:
(a) The preparation of contingency plans for the protection and defense of the Canal based upon the cooperative efforts of the armed forces of both Parties;
(b) The planning and conduct combined military exercises; and
(c) The conduct of United States and Panamanian military operations with respect to the protection and defense of the Canal.
4. The Combined Board shall, at five-year intervals throughout the duration of this Treaty. review the resources being made available by the two Parties for the protection and defense of the Canal. Also, the Combined Board shall make appropriate recommendations to the two Governments respecting proje-ted re-quirenents, the efficient utilization of available resources of the two Parties, and other matters of mutual interest with respect to the protection and defense of the Canal.
5. To the extent possible consistent with its primary responsibility for the protection and defense of the Panama Canal, the United States of America will endeavor to maintain its armed forces in the Republic of Panama in normal times at a level not in excess of that of the armed forces of the United States of America in the territory of the former Canal Zone immediately prior to the entry into force of this Trety.
ARTICLE V
PRINCIPLE OF NON-INTERVENTION
Employees of the Panama Canal Commission, their dependents and designated contractors of the Panama Canal Commission, who are nationals of the









United States of America, shall respect the laws of the Republic of Panama and Shall abstain from any activity incompatible with the spirit of this Treaty. Accordingly, they shall abstain from any political activity in the Republic of Panama as well as from any intervention in 'he internal affairs of the Republic of Panama. The United States of America shall take all measures within its authority to ensure that the provisions of this Article are fulfilled.
ARTICLE VI
PROTECTION OF THE ENVIRONMENT
1. The United States of America and the Republic of Panama commit themselves to implement this Treaty in a manner consistent with the protection of the natural environment of the Republic of Panama. To this end, they shall consult and cooperate with each other in all appropriate ways to ensure that they shall give due regard to the protection and conservation of the environment.
2. A Joint Commission on the Environment shall be established with equal representation from the United States of America and the Republic of Panama, which shall periodically review the implementation of this Treaty and shall recommend as appropriate to the two Governments ways to avoid or, -should this not be possible. to mitigate the adverse environmental impacts which might result from their respective actions pursuant to the Treaty.
3. The United States of America and the Republic of Panama shall furnish the Joint Commission on the Environment complete information on any action taken in accordance with this Treaty which, in the judgment of both, might have a significant effect on the environment. Such information shall be made available to the Commission as far in advance of the contemplated action as possible to facilitate the study by the Commission of any potential environmental problems and to allow for consideration of the recommendation of the Commission before the contemplated action is carried out.

ARTICLE VII

FLAGS
1. The entire territory of the Republic of Panama, including the areas the use of which the Republic of Panama makes available to the United States of America pursuant to this Treaty and related agreements, shall be under the flag of the Republic of Panama, and consequently such flag always shall occupy the position of honor.
2. The flag of the United States of America may be displayed, together with the flag of the Republic of Panama, at the headquarters of the Panama Canal Commission, at the site of the Combined Board, and as provided in the Agreement in Implementation of Article IV of this Treaty.
3. The flag of the United States of America also may be displayed at other places and on some occasions, as agreed by both Parties.

ARTICLE VIII

PRIVILEGES AND IMMUNITIES
1. The installations owned or used by the agencies or instrumentalities of the United States of America operating in the Republic-of Panama pursuant to this Treaty and related agreements, and their official archives and documents, shall be inviolable. The two Parties shall agree on procedures to be. followed in the conduct of any criminal investigation at such locations by the 'Repnblic of Panama.
2. Agencies and instrumentalities of the Government of the United States of America operating in the Republic of Panama pursuant to this Treaty and related agreements shall be immune from the jurisdict-ion of the Republic of Panama.
3. In addition to such other privileges and 1mmun--N(,s as are afforded to employees of the United States Government and their delwndents pursuant to this Treaty, the United States of America may designate up to twenty officials of the Panama Canal Commission who, along with their dependents, shall enjoy the privileges and immunities accorded to diplomatic agents and their dependents under international law and practice. The United States of America shall furnish to the Republic of Panama a list of the names of said officials and their de-







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, endent identifying the positions they occupy in the Oovernment of the United States of America, and shall keep such list current at all times.

ARTICLE IX

APPLICABLE LAWS AND LAW ENFORCEMENT
1. In accordance with the provisions of this Treaty and related agreements. tlh law of tHie Republic of Panama shall apply in the areas made available for the use of the United States of America pursuant to this Treaty. The law of the Republic of Panama shall be applied to matters or events which occurred in the former Canal Zone prior to ti entry into force of this Treaty only to the extent sIpcitlcally provided in prior treaties and agreements.
2. Natural or judicial persons who, on the date of entry into force of this Treaty, are engaged in business or non-profit activities at locations in the former Canal 7one may continue such business or activities at those locations under the same terms and conditions prevailing prior to the entry into force of this Treaty for a thirty-month transition period from its entry into force. The Republic of Panama shall maintain the same operating conditions as those applicable to the aforementioned enterprises prior to the entry into force of this Treaty in order that they may receive licenses to do business In the Republic of Panama subject to their compliance with the requirements of its law. Thereafter, such persons shall receive the same treatment under the law of the Republic of Panama as similar enterprises already established in the rest of the territory of the Republic of Pa nama without discrimination.
3. The rights of ownership, as recognized by the United States of America, enjoyed by natural or juridical private persons in buildings and other improvements to real property located in the former Canal Zone shall be recognized by the Republic of Panama in conformity with its laws.
4. With respect to buildings and other improvements to real property located in the Canal operating areas, housing areas or other areas subject to the licensing procedure established in Article IV of the Agreement in Implementation of Article III of this Treaty, the owners shall be authorized to continue using the land upon which their property is located in accordance with the procedures established in that Article.
5. With respect to buildings and other improvements to real property located in areas of the former Canal Zone to which the aforesaid licensing procedure is not applicable, or may cease to be applicable during the lifetime or upon termination of this Treaty, the owners may continue to use the land upon which their property is located, subject to the payment of a reasonable charge to the Republic of Panama. Should the Republic of Panama decide to sell such land, the owners of the buildings or other improvements located thereon shall be offered a first option to purchase such land at a reasonable cost. In the case of non-profit enterprises, such as churches and fraternal organizations, the cost of purchase will be nominal in accordance with the prevailing practice in the rest of the territory of the Republic of Panama.
6. If any of the aforementioned persons are required by the Republic of Panama to discontinue their activities or vacate their property for public purposes, they shall be compensated at fair market value by the Republic of Panama.
7. The provisions of paragraphs 2-6 above shall apply to natural or judicial persons who have been engaged in business or non-profit activities at locations in the former Canal Zone for at least six months prior to the date of signature of this Treaty.
8. The Republic of Panama shall not issue, adopt or enforce any law, decree, regulation, or international agreement or take any other action which purports to regulate or would otherwise interfere with the exercise on the part of the United States of America of any right granted under this Treaty or related agreements.
9. Vessels transiting the Canal, and cargo, passengers and crews carried on such vessels shall be exempt from any taxes, fees, or other charges by the Republic of Panama. However, in the event such vessels call at a Panamanian port. they may be assessed charges incident thereto, such as charges for services provided to the vessel. The Republic of Panama may also require the passengers and crew disembarking from such vessels to pay such taxes, fees and charges as are established under Panamanian law for persons entering its territory. Such taxes, fees and charges shall be assessed on a nondiscriminatory basis.






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10. The United States of America and the Republic of Panama will cooperate in taking such steps as may from time to time be necessary to guarantee the security of the Panama Canal Commission, its property, its employees an(I their dependents, and their property, the Forces of the United States of Amerif-ci and the members thereof, the civilian component of the United States For(,es, the dependents of members of the Forces and the civilian component, ai),,l their property, and the contractors of the Panama Canal Commission and of the United States Forces, their dependents, and their property. The Republic of Panama will seek from its legislative Branch such legislation as may be needed to carry out the foregoing purposes and to punish any offenders,
11. The Parties shall conclude an agreement whereby nationals of either State, who are sentenced by the courts of the other State, and who are not domiciled therein, may elect to serve their sentences in their State of nationality.

ARTICLE X

EMPLOYMENT WITH THE PANAMA CANAL COMMISSION
1. In exercising its rights and fulfilling its responsibilities as the employer, the United States of America shall establish employment and labor regulations which shall contain the terms, conditions and prerequisites for all categories of employees of the Panama Canal Commission. These regulations shall be provided to the Republic of Panama prior to their entry into force.
2. (a) The regulations shall establish a system of preference when hiring employees, for Panamanian applicants possessing the skills and qualifications required for employment by the Panama Canal Commission. The United States of America shall endeavor to ensure that the number of Panamanian nationals employed by the Panama Canal Commission in relation to the total number of its employees will conform to the proportion established for foreign enterprises under the law of the Republic of Panama.
(b) The terms and conditions of employment to be established will in general be no less favorable to persons already employed by the Panama Canal Company or Canal Zone Government prior to the entry into force of this Treaty, than those in effect immediately prior to that date.
3. (a) The United States of America shall establish an employment policy for the Panama Canal Commission that shall generally limit the recruitment of personnel outside the Republic of Panama to persons possessing requisite skills and qualifications which are not available in the Republic of Panama.
(b) The United States of America Will establish training programs for Panamanian employees and apprentices in order to increase the number of Panamanian nationals qualified to assume positions with the Panama Canal Commission, as positions become available.
(c) Within five years from the entry into force of this Treaty, the number of United States nationals employed by the Panama Canal Commission who were previously employed by the Panama Canal Company shall be at least twenty percent less than the total number of United States nationals working for the Panama Canal Company immediately prior to the entry into force of this Treaty.
(d) The United States of America shall periodically inform the Republic of Panama, through the Coordinating Committee, established pursuant to the Agreement in Implementation of Article III of this Treaty, of available positions within the Panama Canal Commission. The Republic of Panama shall similarly provide the United States of America any information it may have as to the availability of Panamanian nationals claiming to have skills and qualifications that might be required by the Panama Canal Commission, in order that the United States of America may take this information into account.
4. The United States of America will establish qualification standards for skills, training and experience required by the Panama Canal Commission. In establishing such standards, to the extent they include a requirement for a professional license, the United States of America, without prejudice to its right to require additional professional skills and -qualifications, shall recognize the professional licenses issued by the Republic of Panamn.
5. The United States of America shall establish a policy for the periodic rotation, at a maximum -of every five years, of United States citizen employees and other non-Panamanian employees, hired after the entry into force of this Treaty. It is recognized that certain exceptions to the said policy of rotation may be






94

madie for sound administrative reasons, such as in the case ot employees holding positions requiring certain non-transferable or non-recruitable, skills.
6, With regard to wages and fringe benefits. there shall be no discrimination on the basis of nationality, sex, or race. Payments by the Panamia ('anal C"ommiission of additional remuneration, <)r the provision of other benefits, such as home leave benefits, to United States national.-- emiployedl prior to entry into force of this Treaty, or to persons of any nationality, including Panamanian nationals who are thereafter recruited outside of the Republic of Panama and who change their place of residence, shall not be considered to he discrimination for the purpose of this lparngraph.
7. Persons employed by thle Panama (anal Company or Canal Zone Government prior to thle entry into force of this Treaty, who are displaced from their employment as a result of the discontinuance by thle United States of America of certain activities pursuant to this Treaty, will be placed by thle United States of America, to the maximum extent feasible, in other appropriate jobs with the Government of the United States in accordance with United States Civil Service regulations. For such persons who are not United States, nationals, placement efforts will be confined to United States Government activities located within the Republic of Panama. Likewise, persons previously employed in activities for which the Republic of Panama assumnes responsibility as a result of this Treaty will be continued in their employment to the maximum extent feasible by the Republic of Panama. The Republic of Panama sball, to the maximum extent feasible, ensure that the terms and conditions of employment applicable to personnel employed in the activities for which it assumes responsibility are no less favorable than those in effect immediately prior to the entry into force of this Treaty. Non-United States nationals employed by the Panama Canal Company or Canal Zone Government prior to the entry into force of this -Treaty who are Involuntarily separated from their positions becaus-e of the di-scontinuance of an activity by reason of this Treaty, who are not entitled to an immediate annuity under the United States Civil Service Retirement System, and for whom continued employment in the Republic of Panama by the Government of the United States of America is not practicable, will be provided special job placement assistance by the Republic of Panama for employment in positions for which they may be qualified by experience and training.
8. The Parties agree to establish a system whereby the Panama Canal Commission may, if deemed mutually convenient or desirable by the two Parties, assign certain employees of the Panama Canal Commission, for a limited period of time, to assist In the operation of activities transferred to the responsibility of the Republic of Panama as a result of this Treaty or related agreements. The salaries and other costs of employment of any such persons assigned to provide such assistance shall be reimbursed to the United States of America by the Republic of Panama.
9. (a) The right of employees to negotiate collective contracts with the Panama Canal Commission is recognized. Labor relations with employees of the Panama Canal Commission shall be conducted in accordance with forms of collective bargaining established by the United States of America after consultation with employee unions.
(b) Employee unions shall have the right to affiliate with International labor organizations.
10. The United States of America will provide an appropriate early optional retirement program for all persons employed by the Panama Canal Company or Canal Zone Government immediately prior to the entry into force of this Treaty. In this regard, taking into account the unique circumstances created by the provisions of this Treaty, including Its duration, and their effect upon such employees, the United States of America shall, with respect to them:
(a) determine that conditions exist which Invoke applicable United States law permitting early retirement annuities and apply such law for a substantial period of the duration of the Treaty;
(b) seek special legislation to provide more liberal entitlement to, and calculation of, retirement annuities than Is currently provided for by law.

ARTICLE XI
PROVISIONS FOR THlE TRANSITION PERIOD
1. The Republic of Panama shall reassume plenary Jurisdicion over the former Canal Zone upon entry Into force of this Treaty and In accordance with Its terms.





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In order to provide for faii orderly transition of the full application of the jurisdiction arrangements established by this Treaty and related agreements, the provisions of this Article shall become applicable upon the date this Treaty enters into force, and shall remain in effect for thirty calendar months. The authority granted in this Article to the United States of America for this transition period shall supplement, and is not intended to limit, the full application and effect of the rights and authority granted to the United States of America elsewhere in this Treaty and in related agreements.
2. During this transition period, the criminal and civil laws of the United States of America shall apply concurrently with those of the Republic of Panama in certain of the areas and installations made available for the use of the United States of America pursuant to this Treaty, in accordance with the following provisions:
(a) The Republic of Panama permits the authorities of the United States of America to have the primary right to exercise criminal jurisdiction over United States citizen employees of the Panama Canal Commission and their dependents, and members of the United States Forces and civilian component and their dependents, in the following cases:
(i) for any offense committed during the transition period within such areas and installations, and
(ii) for any offense committed prior to that period in the former Canal Zone.
The Republic of Panama shall have the primary right to exercise jurisdiction over all other offenses committed by such persons, except as otherwise provided in this Treaty and related agreements or as may be otherwise agreed.
(b) Either Party may waive its primary right to exercise jurisdiction in a specific case or category of cases.
3. The United States of America shall retain the right to exercise jurisdiction in criminal cases relating to offenses committed prior to 'the entry into force of this Treaty in violation of the laws applicable in the former Canal Zone.
4. For the transition period, the United States of America shall retain police authority and maintain a police force in the aforementioned areas and installations. In such areas, the police authorities of the United States of America may take into custody any person not subject to their primary jurisdiction if such person is believed to have committed or to be committing an offense against applicable laws or regulations, and shall promptly transfer custody to the police authorities of the Republic of Panama. The United States of America and the Republic of Panama shall establish joint police patrols in agreed areas. Any arrests conducted by a joint patrol shall be the responsibility of the patrol member or members representing the Party having primary jurisdiction over the person or persons arrested.
5. The courts of the United States of America and related personnel, functioning in the former Canal Zone immediately prior to the entry into force of this Treaty, may continue to function during the transition period for the judicial enforcement of the jurisdiction to be exercised by the United States of America in accordance with this Article.
6. In civil cases, the civilian courts of the United States of America in the Republic of Panama shall have no jurisdiction over new cases of a private civil nature, but shall retain full jurisdiction during the transition period to dispose of any civil cases, including admiralty cases, already instituted and pending before the courts prior to the entry into force of this Treaty.
7. The laws, regulations, and administrative authority of the United States of America applicable in the former Canal Zone immediately prior to the entry into force of this Treaty shall, to the extent not inconsistent with this Treaty and related agreements, continue in force for the purpose of the exercise by the United States of America of law enforcement and judicial jurisdiction only during the transition period. The TTnited States of America may amend, repeal or q.therwise change such laws, regulations and administrative authority. The two Parties shall consult concerning procedural and substantive matters relative to the implementation of this Article, including the disposition of cases pending at the end of the transition period and, in this respect, may enter into appropriate agreements by an exchange of notes or other instrument.
8. During this transition period, the United States of America may continue to incarcerate individuals in the areas and installations made available for the use of the United States of America by the Republic of Panama pursuant to this Treaty and related agreements. or to transfer them to penal facilities in the United States of Amercia to serve their sentences.








AnrTIce XII

A SEA-LEVEL CANAL OR A THIRD LANE OF LOCKS
1. The United States of America and the Republic of Panama recognize that a sealevel canal maty be important for international navigation in the future. Can sequently, during the duration of this Treaty, both Parties commit themselves to stI dy jointly the feasibility of a sea-level canal in the Republic of Panama, and in the event they determine that such a waterway is necessary, they shall negoti eI terms, agre- able to hoth Parties, for its construction.
2. The United States of America and the Republic of Panama agree on the following :
(a) No new interoceanic canal shall be constructed in the territory of the public of Panama during the duration of this Treaty, except in accordance with the provisions of this Treaty. or as the two Parties may otherwise agree; and
S(b) During the duration of this Treaty, the United States of America shall not negotiate with third States for the right to construct an interoceanic canal on any other route in the Western Hemisphere, except as the two Parties may otherwise agree.
3. The ltipublic of Panama grants to the United States of America the right to add a third lane of locks to the existing Panama Canal. This right may be exercised at any time during the duration of this Treaty, provided that the U nited States of America has delivered to the Republic of Panama copies of the plans for such construction.
4. In the event the United States of America exercises the right granted in paragraph 3 above, it may use for that purpose, in addition to the areas otherwise made available to the United States of America pursuant to this Treaty, such other areas as the two Parties may agree upon. The terms and conditions applicable to Canal operating areas made available by the Republic of Panama for the use of the United States of America'pursuant to Article III of this Treaty shall apply in a similar manner to such additional areas.
5. In the construction of the aforesaid works, the United States of America shall not use nuclear excavation techniques without the previous consent of the Republic of Panama.
ARTICLE XIII

PROPERTY TRANSFER AND ECONOMIC PARTICIPATION BY THE REPUBLIC OF PANAMA

1. Upon termination of this Treaty, the Republic of Panama shall assume total responsibility for the management operation, and maintenance of the Panama Canal, which shall be turned over in operating condition and free of liens and debts, except as the two Parties may otherwise agree.
2. The United States of America transfers, without charge, to the Republic of Panama all right, title and interest the United States of America may have with respect to all real property, including non-removable improvements thereon, as set forth below:
(a) Upon the entry into force of this Treaty, the Panama Railroad and such property that was located in the former Canal Zone but that is not within the land and water areas the use of which is made available to the United States of America pursuant to this Treaty. However, it is agreed that the transfer on such date shall not include buildings and other facilities, except housing, the use of which is retained by the United States of America pursuant to this Treaty and related agreements, outside such areas;
(b) Such property located in an area or a portion thereof at such time as the use by the United States of America of such area or portion thereof ceases pursuant to agreement between the two Parties.
(c) Housing units made available for occupancy by members of the Armed Forces of the Republic of Panama in accordance with paragraph 5(b) of Annex B to the Agreement in Implementation of Article IV of this Treaty at such time as such units are made available to the Republic of Panama.
(d) Upon termination of this Treaty, all real property and non-removable improvements that were used by the United States of America for the purposes of this Treaty and related agreements and equipment related to the management, operation and maintenance of the Canal remaining in the Republic of Panama.