Panama City (AFP) - Panama has issued visas to a North Korean delegation to retrieve a freighter and crew caught with undeclared Cuban arms as it was about to transit the Panama canal, the government said Friday.

"We have already authorized the visas so I imagine that next week they'll be travelling to recover their ship and personnel," Foreign Minister Fernando Nunez told reporters.

Panamanian authorities seized the Chong Chon Gang July 10 after discovering 25 shipping containers of Cuban military hardware, including two MiG-21 fighters, concealed in a cargo of sugar.

Nunez said he expected the North Korean delegation to be able to return with at least 32 of the ship's 35 crew members. The captain and two other senior officers may have to stay.

The North Koreans also have to show they have the means to move the freighter before it will be released.

"They can't take the arms and the sugar yet," he said.

Panama charges that the shipment violated a UN arms embargo against North Korea.

Both Havana and Pyongyang said they were "obsolete" Cuban arms being shipped to North Korea for refurbishment under a legitimate contract.

The communist allies did not explain why the items were buried under more than 200,000 sacks of sugar inside the ship.