§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 Panama Canal Treaty of 1977. Payments under Article III, paragraph 5 must be audited every year by the Comptroller General, and any overpayment found under Understanding (1) in the Senate’s April 18, 1978 Resolution of Ratification must be returned by Panama or deducted from future treaty payments. When deciding if canal revenues exceed costs for payments under Article XIII, paragraph 4(c), yearly revenues are reduced by (1) all costs for that year as shown in the accounts under section 3721, and (2) the total prior years’ shortfalls starting when the treaty takes effect. The President must not accept any reading of Article IX, paragraph 1 that would let Panama retroactively tax businesses or U.S. citizens who were in the Canal Zone before October 1, 1979. Any unpaid balance under Article XIII, paragraph 4(c) at treaty end can only be paid out of any operating surplus in the final year, and the United States is not required to pay amounts after the treaty ends. Tolls may not be set to cover payments under Article XIII, paragraph 4(c). No payment under that paragraph may be made unless unspent funds first cover all operation and maintenance costs, including seven categories of expenses (operating costs under generally accepted accounting principles; other treaty payments to Panama; extra funds for plant replacement/expansion; payments to the U.S. Treasury under section 3793; reimbursements to the Treasury for services under section 3731; treaty implementation costs for canal maintenance/operation; and working capital). The bans in this law and in sections 3712(b) and 3783 apply even if other laws would otherwise allow moving or reprogramming funds. Finally, no cuts ordered under the Balanced Budget and Emergency Deficit Control Act of 1985 may be applied to the Commission if doing so would force a payment to Panama under Article XIII, paragraph 4(c).