Reagan Orders New Sanctions Against Panama

President Reagan ordered a new set of U.S. sanctions applied against Panama on Thursday in an escalation of his Administration’s effort to oust Panamanian strongman Manuel A. Noriega, officials said.

One source said that the new sanctions include diverting U.S. payments for use of the Panama Canal into an escrow account to withhold the money from Noriega’s regime, a proposal that has been under consideration. But White House and State Department spokesmen refused to confirm that report.

Reagan agreed to the new sanctions at a meeting with his top foreign policy advisers, including Secretary of State George P. Shultz, Lt. Gen. Colin L. Powell, the national security adviser, and Defense Secretary Frank C. Carlucci, the officials said.

“We will continue to push to see that Mr. Noriega gets out of Panama,” Shultz told the House Appropriations Committee earlier in the day. “We are very determined that the situation in Panama . . . must change.”

Shultz said that Panama’s treasury is virtually out of funds because of the sanctions the United States already has imposed, which include support for a freeze on transfers of U.S. dollars to the country. Because Panama does not have its own currency, its banks depend on a flow of dollars from the United States for their money supply.

“There is a severe cash flow problem,” Shultz said. “That is a form of pressure, and we favor it.”

The new sanctions, which represent a gradual escalation of the Administration’s efforts to put pressure on Noriega, also are expected to include depriving Panama of the benefits of the Caribbean Basin Initiative and other U.S. trade policies, officials said. The initiative provides trade advantages to Caribbean countries that export goods to the United States.

Payment Due Tuesday

However, they are not expected to include a trade embargo against Panama, because Administration officials decided that such a measure would have little impact on Noriega but would disrupt trade policy and penalize U.S. exporters.

The United States gives Panama about $30 million each year for the use of the canal, including payments for services such as fire and police protection. A payment of about $6.7 million is due next Tuesday.

Officials have said next week’s payment may be placed in an escrow account to keep it out of Noriega’s hands. However, the Panama Canal Commission, which runs the strategic waterway, has asked that the fire and police portion be paid to Noriega to avoid giving the general an excuse for cutting off those services.

The Administration has been pressing Noriega to step down from office for more than a month, ever since the Panamanian general was indicted by two U.S. grand juries on charges of drug trafficking and racketeering.

Last month, Panamanian President Eric A. Delvalle ordered Noriega to resign, but the general responded by engineering a vote in Panama’s legislature to depose Delvalle. The United States continues to recognize Delvalle as Panama’s legitimate president, but Noriega remains in control of the armed forces and the country.

Noriega Criticized

The House of Representatives voted 367 to 2 on Thursday to demand Noriega’s ouster and urged Reagan to consider more economic and political sanctions. Both Democrats and Republicans delivered a series of blistering attacks on Noriega and called on the Administration to impose even tougher measures against his regime.

Congressmen acknowledged that their attacks will have little immediate impact on the situation but said that their aim is to reinforce the message of the limited sanctions adopted by the Administration.

The only members of the House to vote against the resolution were Reps. George W. Crockett Jr. (D-Mich.) and Henry B. Gonzalez (D-Tex.).

In testimony before the House Merchant Marine subcommittee on the Panama Canal, Assistant Secretary of State Elliott Abrams said that the United States wants to continue working with Panama’s armed forces, despite the U.S. condemnation of Noriega.

‘No Ill Will’

“In professional military matters, the Panamanian military can continue to count on full support from the United States,” Abrams said. “Let me say in no uncertain terms that we bear no ill will toward the Panamanian Defense Force (PDF) as an institution.”

But he added: “Military leaders must, for their part, take immediate steps to remove their institution from politics, deal with the corrupt few and modernize the PDF to carry out military tasks in defense of the canal.”

Noriega has headed the Panamanian armed forces since 1983 and has placed cronies and business associates in most of the key positions.

Abrams said that the Administration has not discussed any deals under which Noriega would agree to resign in exchange for the dropping of federal drug indictments against him. Some State Department officials have said that such a deal might ease the way to Noriega’s ouster.

No Deals Discussed

“No such question has been raised with or by Gen. Noriega,” Abrams said. Asked about the Administration’s position on such a deal, he said: “I can only tell you what I have been told by the Justice Department, which is that they would be extremely, strongly opposed to any such move.”

Speaking at the same hearing, William R. Gianelli of Pebble Beach, Calif., chairman of the Panama Canal Commission, said that the canal’s operations have not been disrupted by the political turmoil.

“In my view, if the canal is to play a role in any sanctions against Panama, it should not be a leading one but rather only part of an array of meaningful U.S. government actions,” Gianelli said. Otherwise, he said, shippers might switch to other routes and deprive the canal of income over the long run.