HC Deb 22 December 1983 vol 51 cc398-9W
Mr. Prescott

asked the Secretary of State for Transport (1) what discussion he has had with other nations of the European Economic Community about the discriminatory freight tax imposed on European Community vessels landing cargoes in Panama; and if he will make a statement;

(2) what instructions are given by his Department to British vessels landing cargo in Panama about the accumulating freight tax liabilities; and what assessment he has made about its detrimental effect on Brirish ships landing in Panama;

(3) what negotiations the Government have had with the Panamanian Government about the freight tax imposed upon British vessels landing cargoes in Panama; and if he will make a statement.

Mr. Ridley

The Panamanian authorities have for some years maintained a discriminatory levy on the freight revenue of shipping companies from certain non-Panamanian countries, including the United Kingdom, when loading and discharging cargoes in Panamanian ports. This levy is not imposed on Panamanian shipping. For some time, while diplomatic representations continued, the Panamanian Government kept a moratorium in force, and British shipping companies were not compelled to pay the levy, although their liabilities were accumulating. However, repeated diplomatic reresentations over a period of years have failed to relieve this discrimination, and it is now apparent that it is causing unacceptable damage to British shipping. Recently, one British shipping line has withdrawn from its Panamanian trade, and another has had to take vessels off the British register and re-register them under the Panamanian flag in order to avoid the levy.

Naturally Her Majesty's Government cannot instruct British shipping companies as to their payment of financial imposts of foreign jurisdictions under which they trade. But Parliament has provided in section 14 of the Merchant Shipping Act 1974 broad powers against foreign shipping for use when foreign Governments adopt measures damaging the shipping interests of the United Kingdom. I am hopeful, however, that even at this late stage a solution will be found by diplomatic means. My right hon. and noble Friend the Minister of State, Foreign and Commonwealth Affairs has recently emphasised to the Panamanian Government the importance Her Majesty's Government attach to a speedy resolution to this problem.

The problem has been discussed in the OECD maritime transport committee among the member nations affected.