Statement by Assistant to the President for Press Relations Fitzwater on the Transfer of United States Funds to Panama

 

March 31, 1988

 

We commend those persons who are resisting General Noriega's threats and intimidations to provide him with financial resources. We urge all U.S. companies and persons to comply with the lawful requests of President Delvalle concerning payment of financial obligations to the Government of Panama. Meanwhile, the U.S. Government is taking the following steps in support of the legitimate Government of Panama:

 

1. United States Government payments due the Government of Panama are to be deposited in an account of the Government of Panama at the Federal Reserve Bank of New York. This account will be set up at President Delvalle's request.

 

2. The Department of Justice will participate in actions by private parties who have debts to the Government of Panama to declare that President Delvalle is the leader of the recognized Government of Panama. Pursuant to court orders, the Secretary of the Treasury will assist in the establishment of an account to be available for the deposit of funds.

 

3. The Internal Revenue Service will issue guidance to U.S. taxpayers explaining how tax credit may be claimed for Panamanian income taxes paid into an account to be specified at the Federal Reserve Bank of New York.

 

Through these measures, we are giving U.S. companies and persons an incentive and opportunity not to provide financial support to the Noriega regime. Should these measures prove insufficient, we will review additional legal steps that may be necessary to deny transfer of funds to the Noriega regime from U.S. companies and persons.

 

These measures are in addition to the following actions that were announced on March 11:

 

1. Withdrawal of trade preferences available to Panama under the Generalized System of Preferences and the Caribbean Basin Initiative.

 

2. Increased scrutiny of Panama by the Immigration and Customs Services in order to apprehend drug traffickers and money launderers.

 

3. Placing in escrow certain payments by the Panama Canal Commission to the Government of Panama.

 

The United States remains committed to the goal of restoring democratic government and constitutional order in Panama. When that goal is achieved, the United States is fully prepared to work with the Government of Panama to help restore quickly Panama's economic health. In addition, the U.S. Government is providing one-quarter million dollars to support the Caritas emergency feeding program in Panama. We will continue to examine the food needs of the poor in Panama.