§3751 Payments to Republic of Panama

Summary

The Commission must make the payments to the Republic of Panama required by paragraph 5 of Article III and paragraph 4 of Article XIII of the 1977 Panama Canal Treaty. Payments under paragraph 5 of Article III must be checked each year by the Comptroller General, and any overpayment found under Understanding (1) in the Senate’s Resolution of Ratification (adopted April 18, 1978) must be paid back by Panama or taken off future paragraph 5 payments. To decide if operating revenues exceed costs for paragraph 4(c) payments, revenues for a fiscal year are reduced by all costs shown in the accounts under section 3721 and by the running total from prior years of any years when costs exceeded revenues, starting when the treaty began. The President may not accept any reading of paragraph 1 of Article IX that lets Panama tax businesses or U.S. citizens in the Canal Zone retroactively for activity before October 1, 1979. If the treaty ends, any unpaid balance under paragraph 4(c) can only be paid out of any operating surplus in the treaty’s last year; the United States is not required to pay unpaid balances after the treaty ends. Tolls cannot be set to cover paragraph 4(c) payments (see section 3792(b)). No paragraph 4(c) payments may be made unless leftover funds first pay all canal operation and maintenance costs, including operating expenses under generally accepted accounting rules and the other specific payments and reserves the law lists (such as payments under other treaty paragraphs, Treasury payments under section 3793, reimbursements for services under section 3731, plant replacement and working capital, and treaty implementation costs). The limits in this law and in sections 3712(b) and 3783 apply even if other laws would allow moving or reprogramming money. Also, budget-cut orders under the Balanced Budget and Emergency Deficit Control Act of 1985 cannot be applied to force cuts if doing so would cause a payment to Panama under paragraph 4(c) and this rule.