Public Papers

Message to the Congress Transmitting a Report on Panamanian Government Assets Held by the United States


To the Congress of the United States:

1. I hereby report to the Congress on developments since the last Presidential report of April 30, 1990, concerning the national emergency with respect to Panama. This report is submitted pursuant to section 207(d) of the International Emergency Economic Powers Act, 50 U.S.C. 1706(d).

2. On April 5, 1990, I issued Executive Order No. 12710, terminating the national emergency declared on April 8, 1988, with respect to Panama. While this order terminated the sanctions, the blocking of Panamanian government assets in the United States was continued to permit completion of the orderly unblocking and transfer of funds I directed on December 20, 1989, and to foster the resolution of claims of U.S. creditors involving Panama, pursuant to 50 U.S.C. 1706(a). The termination of the national emergency did not affect the continuation of compliance audits and enforcement actions with respect to activities taking place during the sanctions period, pursuant to 50 U.S.C. 1622(a).

2. Since March 12, 1990, the Office of Foreign Assets Control (``FAC'') has released million of the remaining 9.7 million blocked to the control of the Government of Panama. This million was comprised of 0,000 from blocked accounts at commercial banks, and .4 million from blocked reserve accounts established under section 509 of the Panamanian Transactions Regulations, 31 C.F.R. 565.509 (``509 accounts'').

The 0.7 million remaining blocked consists of 7.8 million in the Federal Reserve Bank of New York that continues to be held in escrow at the request of the Government of Panama to fund a portion of Panama's arrearage to international financial institutions, .5 million in commercial banks for which the Government of Panama has not requested unblocking, and .4 million in 509 accounts. The remaining 509 account balances are subject to bilateral negotiations between the Government of Panama and U.S. firms that have both debts to and obligations owed from the Government of Panama. We will continue to work with the Government of Panama to resolve its outstanding obligations.

4. Representatives of the Department of the Treasury visited Panama to discuss with senior Panamanian officials and representatives of the business community the conclusion of the Panama emergency and the unblocking of funds, and to request their assistance in enforcement and compliance actions that may still occur. The Department of the Treasury is in the process of reviewing potential civil penalty cases involving violations of the Panamanian Transactions Regulations, 31 C.F.R. Part 565, which occurred prior to the end of the economic sanctions program against the Noriega regime. Prepenalty Notices have been issued in two such cases as of this date.

5. I will continue to report periodically to the Congress on the exercise of authorities to prohibit transactions involving property in which the Government of Panama has an interest pursuant to 50 U.S.C. 1706(d).

George Bush

The White House,

October 27, 1990.