Panama Canal Commission. At the present time, that is the deputy administrator and the four so-called directors, really members, of the Panama Canal Commission that are not U.S. citizens.

I would stress that there is no authority whatever in the Panama Canal Act for these appointments. The Panama Canal Act, which follows my testimony, says that no less than five shall be U.S. citizens. Nothing prevents the President from appointing nine U.S. citizens. Then it says the remainder shall be Panamanian nationals. Well, this, with a great deal of hair splitting, can be read to be Panamanian nationals resident in the United States. That would be possible because they would owe allegiance to the United States. That is one thing that must be done under the Constitution.

The other thing which must not be done is that the President, the executive branch, invokes the Panama Canal treaties as authority for anything they want to do in the future. There is nothing in the law which authorizes him to do so; on the contrary, the law specifically states that we still have the Panama Canal and that it can be transferred only by legislation and not before 1999. I refer to sections 1503 to 1505 of the act.

Now, those are the things that must be done: One, a positive one, remove the Panamanians; the other one, do not invoke the Panama Canal Treaty as authority for anything. The legal position is exactly as it was before the treaties were ever signed in September 1977, with one important exception, and that is anything we have given away by legislation is gone.

We can complain to Panama that this, citing you again, was a hoax-a swindle, in my words. But that is a complaint to be taken up in diplomatic channels. Now, beyond this, the President is perfectly free to do whatever he, in his wisdom, decides to propose to the Senate and subsequently to the Congress.

He can propose a new treaty. He can say, "I do not want any treaty; I just stand pat at the present time." That is entirely up to the President in conducting his foreign policy.

Senator HELMS. Thank you, sir.

Mr. Chairman, again, I thank you for allowing this interloper to come in. While you were answering the question, I was thinking about a fellow named Jim Allen-Senator James B. Allen of Alabama. How I wish he could be here this morning and participate in this.

Thank you, Mr. Chairman, very much.

Senator EAST. Thank you, Senator, and we would be glad to have you anytime. If you ever have a spare moment, drop by anytime. If you wish to drop back, you would be welcome and we would be glad to hear your comments. Thank you.

Since time continues to move along, Dr. Breecher, if that would be satisfactory with you in terms of your comments, I think the questions you answered propounded by Senator Helms will be very valuable in this record, too, in terms of potential remedies. The problem, aside from identifying it, is what might be done to try to unravel the knot, as you see it. So I think that has added a considerable dimension to the building of our record here.

If it is satisfactory with you in terms of your having completed your basic testimony-and as we have already indicated, all written materials you have now submitted or would like to submit

based upon what you hear this morning will be made a permanent part of the record.

As Senator Laxalt has said, certainly a minimum that we would like to come out of this whole proceeding is a complete and full, formal record indicating the concerns that you and others here this morning may have on this matter. So I want to assure you that you are not foreclosed from further adding to this formal record, and that shall be made as clear as we might.

Dr. BREECHER. Thank you, Mr. Chairman.

Senator EAST. Often, subsequently, on reflection, one does like to add additional commentary.

Well, if that is satisfactory with you, then what I would like to do is to move to Mr. Robert E. Dalton, who is here with us this morning, Assistant Legal Adviser for Treaty Affairs, Office of the Legal Adviser, Department of State.

Mr. Dalton, I do wish to thank you for taking the time out of your schedule and for the cooperation of the State Department in sending you here to respond to what Dr. Breecher or others may be saying and, of course, to add your contribution to this overall hearing.

So we welcome you, and I would again remind you that any statement you wish to make as permanent part of the written record will be so ordered now as a part of it and we will leave the record open, and you and the Department of State, of course, will have the opportunity to submit additional materials you might think are pertinent based upon the general testimony and thrust of this hearing.

So, again, I thank you for coming and welcome you, and if you will proceed, please.

STATEMENT OF ROBERT E. DALTON

Mr. DALTON. Thank you, Mr. Chairman. I welcome this opportunity to present the views of the Department of State on certain questions concerning the Panama Canal Treaty and the treaty concerning the permanent neutrality and operation of the Panama Canal. As Assistant Legal Adviser for Treaty Affairs, I particularly welcome the opportunity to discuss with the committee the issues of treaty law raised by the questions in your letter.

Mr. Chairman, the first issue raised in that letter relates to the ratification of the Panama Canal treaties, and the third relates to the process of ratification in general. With your permission, because of the relationship between these two topics, I would like to deal with them together.

The State Department is well aware of the arguments that have been raised prior to this hearing, and also we listened with great interest to the remarks of Dr. Breecher this morning raising issues with respect to the claim that the canal treaties are not legally valid because the United States allegedly did not agree to a supposed Panamanian counterreservation within Panama's instrument of ratification. Over the last few years, we have responded on several occasions to this contention, raised in both congressional and private correspondence. The Department continues to find this contention to be without merit.

The argument, as we understand it, focuses on a three-paragraph statement included in Panama's instrument of ratification of the treaties. It has been argued that the treaties are somehow defective because the Panamanian instruments of ratification differed from those of the United States by those three paragraphs, that the Panamanian paragraphs should have been subject to advice and consent by the U.S. Senate, and that the United States and Panama did not agree on the same treaty.

It might be useful to address the two fundamental elements of this argument separately. First, was the exchange of instruments of ratification of the treaties effective to bring those treaties into force as a matter of law? Second, did the President act properly in exchanging the instruments in light of the Panamanian statements?

As a matter of international law, in our view there is no serious question as to the validity of the Panama Canal treaties. In this respect, we differ fundamentally from the position just outlined by Dr. Breecher.

In the Protocol of Exchange of Instruments of Ratification, President Carter and General Torrijos, the responsible officers to carry out the process of ratification on behalf of their respective governments, fully accepted the treaties, with the attached reservations, conditions and understandings, and the instruments of ratification submitted by both sides. Under international law, as reflected in part II of the Vienna Convention on the Law of Treaties, that act was sufficient to create binding treaties. The Panama Canal treaties remain in full force and effect.

In this regard-and here, again, we differ from Dr. Breecher-we believe that there is no requirement in international or in domestic law that instruments of ratification be identical. While the parties to a treaty must, of course, agree on a single treaty, they need not, and often do not, communicate that agreement through identical instruments of ratification. Indeed, it is not normal practice for one government to repeat in its own instruments the amendments, reservations, and understandings of the other party. Rather, each party usually includes only its own statements. In this case, Panama took the unusual step of including all the Senate conditions in its own instruments, as was required by the resolution of advice and consent.

The substantive issue, then, is not whether the treaties exist in international law; in our view, they plainly do. Rather, the more serious issue raised by the committee's questions is whether the President acted properly in accepting Panama's instrument of ratification in light of the fact that Panama's instruments included a three-paragraph statement that was not before the Senate at the time it gave its advice and consent. While the executive branch has consistently found no defect in that acceptance-and indeed the treaties would still be binding on the United States as a matter of international law even if the President had acted improperly in this respect-this subject deserves more extended discussion.

As we understand it, the argument of a defect in the President's acceptance of the treaties asserts, in essence, that the three Panamanian statements constituted a counter-reservation-and Dr. Breecher used that term again a few minutes ago-requiring

Senate approval before the treaties could be considered properly ratified.

The supposed counter-reservation is read in this argument as undercutting the DeConcini condition added by the Senate in its advice and consent to the treaties. The DeConcini resolution reads: Notwithstanding the provisions of Article V or any other provision of the Treaty, if the Canal is closed, or its operations are interfered with, the United States of America and the Republic of Panama shall each independently have the right to take such steps as each deems necessary, in accordance with its constitutional processes, including the use of military force in the Republic of Panama, to reopen the Canal or restore the operations of the Canal, as the case may be.

That concludes the text of the DeConcini reservation.

That reservation, as we have indicated, was in the instrument of ratification and it was in the Protocol of Exchange of Instruments of Ratification that was specifically accepted by the Government of Panama.

In analyzing the argument set forth by Dr. Breecher, it should be emphasized that far from rejecting the DeConcini condition, the Panamanian instruments of ratification expressly adopted it. I have just said the texts were repeated verbatim and explicitly accepted by the Government of Panama both in the instruments and the protocol of exchange.

Nevertheless, notwithstanding Panama's clearly expressed acceptance of the Senate's conditions, it has been argued that the language in the three-paragraph Panamanian statement undercuts that acceptance and constitutes a counter-reservation requiring Senate approval.

It is indeed true that an amendment or reservation added to a treaty after Senate ratification may require Senate approval. This is based on the notion that the constitutional mandate of Senate advice and consent to a treaty should not be undercut by subsequent changes to the document which the Senate has approved. However, the flaw in the application of these principles to the three-paragraph Panamanian statement is that the Panamanian statement is not an amendment or reservation either in form or substance. The Vienna Convention on the Law of Treaties defines a reservation as a "unilateral statement, however phrased or named, made by a state when signing, ratifying, accepting, approving, or acceding to a treaty, whereby it purports to exclude or to modify the legal effect of certain provisions of the treaty in their application to that state."

As reflected in the restatement of foreign relations law of the United States, only a true reservation-that is, one which purports to exclude or modify the legal effect of certain provisions of a bilateral treaty such as this one-would require Senate approval.

On the other hand, where a government's statement is merely an understanding or declaration-that is, one that does not purport to change the rights and obligations under the treaty-then the Executive need not submit that statement to the Senate.

In the present case, the first two Panamanian paragraphs are quite clearly labeled "understandings," and the third is a "declaration." On their face, then, they are not statements that would seem to require submission to the Senate. Of course, the definition in the Vienna Convention says, quite rightly, that the label is not neces

sarily controlling; it is the substance which determines whether a statement is a true reservation. An analysis of the three Panamanian paragraphs makes clear that they are what they are labeled. None purports to exclude or modify the DeConcini condition or any other provision of the treaties, as advised and consented to by the Senate. None is a true reservation.

Because the meaning of the Panamanian statement is thus the crux of the issue, let us look briefly at the text of each of the three paragraphs. The first paragraph provides:

The Republic of Panama agrees to the exchange of the instruments of ratification * * * on the understanding that there are positive rules of public international law contained in multilateral treaties to which both the Republic of Panama and the United States of America are parties, and which consequently both governments are bound to implement in good faith, such as article 1, paragraph 2, and article 2, paragraph 4, of the Charter of the United Nations, and articles 18 and 20 of the Charter of the Organization of American States.

This language is no more than a correct, factual statement that Panama and the United States are bound by obligations contained in multilateral treaties to which they are parties. This legal fact is true, regardless of whether it is expressed in the Panamanian instrument or are not. It is clear from the records of the Senate proceedings that no part of the treaties was designed to or has the effect of derogating from the responsibilities of the United States under the UN Charter or the OAS Charter. That there is no inconsistency between the treaties and these charters is amply confirmed in the report of the Senate Foreign Relations Committee on the treaties. In short, the reference in Panama's first paragraph to already existing obligations, which are in any event entirely consistent with the treaties, cannot be construed to legally modify the express terms of the treaties. This first paragraph is thus not in any sense a reservation.

Now, let us look at the second paragraph. That provides:

It is also the understanding of the Republic of Panama that the actions which either party may take in the exercise of its rights and the fulfillment of its duties in accordance with the aforesaid treaties, including measures to reopen the canal or to restore its normal operation if it should be interrupted or obstructed, will be effected in a manner consistent with the principles of mutual respect and cooperation on which the new relationship established by that treaty is based.

Again, it should be noted that far from indicating any modification or rejection of the DeConcini condition, this Panamanian understanding in its initial clauses emphasizes Panama's acceptance of the DeConcini condition. I refer, in particular, to the language recognizing the actions either party may take to reopen the canal or to restore its normal operations.

In essence, the language in Panama's second paragraph simply states Panama's understanding of the spirit in which the rights and duties under the treaties, including the DeConcini condition, will be effected. The principles of mutual respect and cooperation referred to in this paragraph form the foundation of the treaties themselves. They are reflected throughout those documents and they continue to govern the relationship between the two governments.

The Panamanian understanding says no more than what is clear from the texts of the treaties themselves. Particularly in light of Panama's explicit acceptance of the Senate's reservations and con