Reagan Sets Sanctions Against Panama

SANTA BARBARA, Calif.--President Reagan yesterday invoked a sweeping economic-sanctions law against Panama in a renewed effort to force military strongman Manuel Antonio Noriega to surrender his hold on the Central American country.

"I have authorized these steps in response to the unusual and extraordinary threat posed by Noriega," Reagan said in a letter to congressional leaders.

Reagan's move came as the United States continued to elect mostly economic options in response to Noriega's unflinching hold on power.

White House spokesman Marlin Fitzwater said that among the steps the president ordered under provisions of the International Emergency Economic Powers Act are:

--Blocking assets of the government of Panama in the United States.

--Prohibiting payments by all people and organizations in the United States to the Noriega regime.

--Prohibiting payments to the Noriega regime by all U.S. citizens and organizations in Panama, including U.S. branches and subsidiaries.

"These further steps reaffirm our commitment to democratic government in Panama and our belief that Noriega would best serve his country by complying with the instruction of President [Eric Arturo] Delvalle to relinquish his post," Reagan said in the letter to Capitol Hill leaders.

Noriega is under indictment in the United States on drug trafficking charges, which he denies.

The United States, in the wake of Noriega's ouster of Delvalle in late February, slapped several sanctions against Panama. These included freezing that country's assets in the United States and withholding millions of dollars in payments the United States makes to the Panama Canal Commission.

But the administration apparently has been frustrated with a lack of cooperation from U.S. businesses with operations in Panama. Invoking the emergency economic powers law would allow the government to forcibly withhold tax payments that American businesses make to the Panamanian government.