[Public Papers of the Presidents of the United States: William J. Clinton (1994, Book II)]
[October 3, 1994]
[Pages 1681-1682]
[From the U.S. Government Publishing Office www.gpo.gov]

Message to the Congress Reporting on the Unblocking of
Panamanian Government Assets
October 3, 1994

To the Congress of the United States:
    1. I hereby report to the Congress on developments since the last 
Presidential report on November 9, 1993, which have resulted in the 
termination of the continued blocking of Panamanian government assets. 
This is the final report with respect to Panama pursuant to section

[[Page 1682]]

207(d) of the International Emergency Economic Powers Act, 50 U.S.C. 
    2. On April 5, 1990, President Bush issued Executive Order No. 
12710, terminating the national emergency declared on April 8, 1988, 
with respect to Panama. While this order terminated the sanctions 
imposed pursuant to that declaration, the blocking of Panamanian 
government assets in the United States was continued in order to permit 
completion of the orderly unblocking and transfer of funds that the 
President 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).
    3. The Panamanian Transactions Regulations, 31 CFR Part 565 (the 
``Regulations''), were amended effective May 9, 1994, to foster the 
resolution of U.S. persons' claims against the Government of Panama 
arising prior to the April 5, 1990, termination date. (59 Federal 
Register 24643, May 12, 1994.) A copy of the amendment is attached. The 
amendment, new section 565.512, includes a statement of licensing policy 
indicating that the Department of the Treasury's Office of Foreign 
Assets Control (``FAC'') would issue specific licenses authorizing the 
release of blocked Government of Panama funds at the request of that 
government to satisfy settlements, final judgments, and arbitral awards 
with respect to claims of U.S. persons arising prior to April 5, 1990. 
In addition, FAC stated that it would accept license applications from 
U.S. persons seeking judicial orders of attachment against blocked 
Government of Panama assets in satisfaction of final judgments entered 
against the Government of Panama, provided such applications are 
submitted no later than June 15, 1994.
    4. No applications were received pursuant to this amendment for the 
purpose of obtaining judicial orders of attachment against blocked 
Government of Panama assets. Since the last report, however, specific 
licenses were issued at the request of the Government of Panama to 
unblock about $4.4 million to satisfy settlements reached with the vast 
majority of U.S. creditors by the Government of Panama. On September 9, 
1994, the FAC gave notice to the public that the remaining blocked 
Government of Panama assets, approximately $2.1 million, would be 
unblocked effective September 16, 1994. (50 Federal Register 46720, 
September 9, 1994.) A copy of the notice is attached. Half of the $2.1 
million had been held at the Federal Reserve Bank of New York at the 
request of the Government of Panama. The remaining amounts were held in 
blocked commercial bank accounts or in blocked reserved accounts 
established under section 565.509 of the Panamanian Transactions 
Regulations, 31 CFR 565.509. The remaining known claimants were informed 
that, prior to the unblocking, the Government of Panama and Air Panama 
had directed the transfer of $400,000 into a trust account administered 
by counsel to the Republic of Panama and Air Panama, as escrow agent, to 
be utilized toward resolution of the few remaining U.S. claims. This sum 
exceeds the face amount of the total of the known remaining claims.
    5. With the unblocking on September 16, 1994, of Government of 
Panama funds that had been subject to the continued blocking, the 
sanctions program initiated to deal with the threat once posed by the 
Noriega regime in Panama is completed. However, enforcement action for 
past violations may still be pursued within the applicable statute of 
    6. The expenses incurred by the Federal Government during the period 
of the national emergency with respect to Panama from April 8, 1988, 
through April 5, 1990, that are directly attributable to the exercise of 
powers and authorities conferred by the declaration of a national 
emergency with respect to Panama are estimated to total about $2.225 
million, most of which represents wage and salary costs for Federal 
personnel. Personnel costs were largely centered in the Department of 
the Treasury (particularly in the Office of Foreign Assets Control, the 
U.S. Customs Service, the Office of the Under Secretary for Enforcement, 
and the Office of the General Counsel), and the Department of State 
(particularly the Bureau of Economic and Business Affairs and the Office 
of the Legal Adviser).

                                                      William J. Clinton

The White House,
October 3, 1994.