THE SUEZ CANAL COMPANY AND OPERATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A000400220001-2
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 2
• Document Creation Date: November 16, 2016
• Document Release Date: April 6, 2000
• Sequence Number: 1
• Publication Date: September 17, 1951
• Content Type: MEMO

Approved For Release 2000/05/15: CIA-RDP79T01049A000406220001
25X1A
3ecy
onom o gence Committee
Chief, S/TR
25X1A The Suez Canal Company and Operations
17 September 1961
She following comments, it is believed, will answer the three questions
raised by in his memorandum to you dated 14 September 1951.
Information in grey or tail is available if desired.
1. During the year 1950 a total of 11,751 vessels passed through the
Suez Canal. British vessels, as usual. predominated, constituting~34.9% of
the total. For purposes of oomparisone Norwegian vessels amounted,?13.81
U.S.. 8I+3 , and Panamanian, 8.1% of the total shipping transiting the canal.
?hose 11,761 vessels represented 81,796,000 Net Register Tons (WRT) of which
British vessels totalled 26,557,586 WRY or 32.5%, Norwegian vessels 14.16.
U.S. 10,2% and Panamanian 9.7% of the total annual movement.
Since the end of World War It the number of vessels using the Suez has
increased by 132% while the tonnage has increased by 1506. Meanwhile British
participation in Sues traffic has consistently decreased percentage-mine.
In 1946 British vessels constituted 62.8% of the total tonnage but in 1947,
this figure was reduced to 47.2% and in 1949 was only 38% of the total NRT.
2. On March 7. 1949, after several months of negotiation, a new agree-
ment was signed by the Egyptian 0overamont and the Suez Canal Company. Under
the new terms the Egyptian Gover Bent receives 7% of the Company's gross pro-
fits with a guaranteed annual minimum of LE 350,000'#. Furthermore, by the
terms of the argreoment all Company property reverts to the Egyptian Government
in 1968 at the end of the 99--year concession. Under the 1949 Convention, the
Company also relinquished rights to a LE 100,000 balance due on a previous
loan to the Port SAID municipality. In May# 1950 the Sues Canal Company re-
leased a report which indicated that over and above salaries paid and property
improvements effected during 1949 it contributed approximately LE 3 million
in cash to the Egyptian Government as follows,
LE 821,469 7% of the gross profits for
the preceding year
1,994,541 for taxes
130,000 for various grants
To satisfy an Egyptian demand that her coastwise trade should be free
of obligation to pay Canal tolls and in order not to violate the 1888 Con-
vention governing utilization of the Canal which prescribes equality of
* The Egyptian pound . $2.87
Approved For Release 2000/0511$ cIA-i bP79T01049A000400220001-2
 Approved For Release 2?Q,LO/05/15 ? ,IA RQP?7Q}O1049A000400220001-2
treatment for all users including Egypt, the new Convention stipulates that
all vessels under 300 tons may use the Canal free of transit duties. This
is especially beneficial to Egypt although applicable to all countries.
(While not pertinent to the Company's contribution to the Egyptian
exchequer, it might be noted that under the revised Convention the Company
accepted the terns of the Egyptian Company Law of 19470 and the Exjrptian
Government in turn granted the Company 20 years instead of the stipulated
three to conform to the provisions of said law,)
B. Prior to 1949 the Board of the Sues Canal Company included ten British
directors (3 of whom were nominated by the British Government), two Egyptians,
one butch and one American director. The balance represented French interests.
As a result of the 1949 agreement Egyptian representation en--thsr58:mad board
iii',~directors,was increased from two to seven, The additional five director.
Ships were provided for as follows, two to be
smut of taro out sin appointed at once in replaoe-
B g French dirootorej one to fill the first British vacancy,,
another in 1969 and the fifth in 1984. Fees paid to the directors are eon.
tidential and vary from year to year, they are based according to the statutes
of the 0oapAny on a 2% share of the net profits,
* This law drastically limits the number of non.Egyptians who may be employed
by foreign companies.
25X1A
Approved For Release 2000/05/15: CIA-RDP79TO1049A000400220001-2