Panama complains to UN over Trump canal threat, starts audit

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Panama has complained to the United Nations over U.S. President Donald Trump's "worrying" threat to seize the Panama Canal, even as it launched an audit of the Hong Kong-linked operator of two ports on the interoceanic waterway.

In a letter to UN Secretary-General Antonio Guterres, the government in Panama City referred to an article of the UN Charter precluding any member from "the threat or use of force" against the territorial integrity or political independence of another.

The missive, distributed to reporters Tuesday, urges Guterres to refer the matter to the UN Security Council, without asking for a meeting to be convened.

Trump, in his inaugural address Monday, repeated his complaint that China was effectively "operating" the Panama Canal through its growing presence around the waterway, which the United States handed over at the end of 1999.

"We didn't give it to China, we gave it to Panama. And we're taking it back," Trump said.

Panama's President Jose Raul Mulino hit back that the canal was not a gift from the United States during a panel at the World Economic Forum in Davos, Switzerland.

"We reject in its entirety everything that Mr Trump has said. First because it is false and second because the Panama Canal belongs to Panama and will continue to belong to Panama," Mulino said Wednesday.

The president has previously denied that any other nation was interfering in the canal, which he said was operated on a principle of neutrality.

Asked Wednesday about the spat, Beijing denied it had ever "interfered" in the canal.

"China has always respected Panama's sovereignty over the canal and recognized the canal as a permanent neutral international waterway," foreign ministry spokeswoman Mao Ning said.

- U.S. pressure -

The Panamanian comptroller's office that oversees public entities announced "an exhaustive audit" would be launched "aimed at ensuring the efficient and transparent use of public resources" at the Panama Ports Company.

The company, part of Hutchison Ports, a subsidiary of Hong Kong-based conglomerate CK Hutchison Holdings, operates the ports of Balboa and Cristobal on either end of the canal.

The comptroller's office said the aim was to determine whether the company was complying with its concession agreements, including adequate reporting of income, payments and contributions to the state.

Hutchison Ports PPC said in a statement that it has "maintained and will continue to maintain a transparent and collaborative relationship" with Panamanian authorities.

"We remain steadfast in our commitment to comply with all laws and regulations, fully exercising our contractual responsibilities," the firm said.

"Our financial results, audited by an independent external auditor, have been shared annually with our partner, the Panamanian State, ensuring trust and clarity in our management."

Trump has been raising pressure for weeks over the canal, through which 40 percent of US container traffic travels. He has refused to rule out using military force to reclaim it.

The Panama Ports Company's concession agreement was extended by 25 years in 2021.

The United States is the canal's main user, followed by China.

Since 2000, the waterway has contributed more than $30 billion to Panama's state coffers, including nearly $2.5 billion in the last fiscal year.