Panamanian Government action/initiative to facilitate transition to transfer of the Canal to Panama at end of 1999  

September 7, 1977 – President Jimmy Carter and Panamanian Head of Government Brigadier General Omar Torrijos signed in Washington, D.C., signed the Panama Canal Treaty of 1977 (informally known as the Torrijos-Carter Treaty) between the Republic of Panama and the United States of America and the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal.  The Organization of American States, Washington, D.C., was the site of the signing of the Treaties, attended by 28 governments and 19 heads of state as witnesses to the signing of the historic agreements guaranteeing the Canal would be transferred to the Republic of Panama at the end of the transition period, December 31, 1999, date of Panama’assumption of full responsibility for Canal administration, operation and maintenance.  This Neutality Treaty, with no end date, established a regime of neutrality that guarantees that the Canal shall remain open, safe, neutral and accessible to vessels of all nations.

The new treaties provided a basis for a new partnership between the United States and Panama. They replaced the U.S.-Panama Treaty of 1903 (known as the Hay/Bunau-Varilla Treaty), which governed canal operations since the waterway's construction (completed and opened to world commerce in 1914) and subsequent revisions to it by the treaties of 1936 and 1955 which modified some of its terms.

June 16, 1978 -- The Protocol of Exchange of Instruments of Ratification of the two treaties was signed in Panama City, Panama, by President Carter and General Torrijos, during President Carter's June 16-17 visit to Panama City. The instruments of ratification had established October 1, 1979, as the date when the treaties became legally binding.

Late September 1979 -- The legislation (the Panama Canal Act of 1979) required to implement the treaties  was approved by the U.S. Congress virtually on the eve of treaty implementation.

September 30, 1979 - Final day of operation of the Panama Canal Company and Canal Zone Government, in accordance with the Panama Canal Treaty signed on September 7, 1977.

October 1, 1979 - Entry into force of the Panama Canal Treaty. Panama gained jurisdiction over the former Canal Zone. First day of operations of the Panama Canal Commission, the new agency of the U.S. Government responsible for managing, operating, maintaining and improving the Canal through December 31, 1999.  Dennis P. McAuliffe, U.S. Southern Commander-in-Chief from 1975 to 1979, assumed the position of Canal Commission administrator for a 10-year period following his retirement from the U.S. Army September 20, 1979.  Fernando Manfredo, Jr., was sworn in as deputy administrator for a similar term.

May 28, 1980 - The Joint Committee on the Environment, established under the treaty, held its first bi-national meeting in Panama.

June 11, 1980 - The Coordinating Committee, established under the treaty, held its first bi-national meeting in Panama City. This bi-national committee was established to channel communication between the Canal Commission and the Panamanian Government.  

June 24, 1980 - The bi-national Panama Canal Commission's Board of Directors held its first meeting at the Administration Building, in Balboa Heights, with Michael Blumenfeld as Chairman.

January 10, 1982 - A new wage system replaced the Panama Area Wage Base, reducing the differences between post and pre-treaty wage rates and improving the competitive position to recruit skilled, technical and professional occupations.

March 31, 1982 - End of the 30-month transition period. The Panama Canal Commission's transitional police force and magistrate's courts, as well as the U.S. District Court were disestablished on that date. Also, the Panama Canal Employment System replaced the Canal Zone Merit System.  This was the last day that non-U.S. citizen employees of the Commission were eligible to use U.S. military health facilities for non-job related medical treatment.

February 7, 1983 - A new marketing unit was established within the Commission’s Office of Executive Planning to handle the Commission's marketing functions.

July 11, 1983 - The Pilot Understudy Program, designed to provide Panamanians an additional means of entry into the pilot force, accepted its first class of nine trainees.  

January 18, 1984 - The new labor-management Safety and Health Committee was inaugurated.

April 4, 1984 - A transit reservation system was implemented on a permanent basis for Canal customers desiring a guaranteed transit date.

October 1, 1984 - U.S. Armed Forces mail and commissary privileges were eliminated for Commission U.S. employees who had had prior access to them during the first five years under the Panama Canal Treaty of 1977.

March 15, 1985 - The first class of nine Panamanians in the Pilot Understudy Program was promoted to the Pilot-in-Training Program.

May 5, 1985 - The first phase of a new automated traffic management system at the Maritime Traffic Control Center was implemented.

September 26, 1985 - An agreement was signed at the United Nations by the United States, Panama, and Japan to form a tripartite commission to study alternatives and/or modifications to the Panama Canal.

December 23, 1985 - The President of the United States signed into law the Panama Canal Amendment Act, Public Law 99-209, amending the provisions governing vessel accidents.

January 1, 1990 - Fernando Manfredo, Jr., Panama Canal Commission Deputy Administrator since October 1, 1979, through December 31, 1989, served as the first Panamanian acting administrator from January 1, 1990 through September 1990, at the request of President George H.W. Bush in late 1989.  (The U.S. Government refused to accept the proposal for nomination of Carlos Duque Jaen as the first Panamanian Administrator made by the Noriega regime in 1989 during the political crisis.)

September 20, 1990 - Gilberto Guardia F. was sworn in as Panama Canal Commission Administrator, becoming the first Panamanian to occupy the Canal's highest office.  (He was proposed by Panamanian President Guillermo Endara Galimany, nominated by President George H.W. Bush, and approved by the U.S. Senate, in accordance with the Panama Canal Treaty.)

February 25, 1993 - The Interoceanic Region Authority (Autoridad de la Region Interoceanica or ARI by its initials in Spanish) was created by Panamanian law on February 25, 1993 , to develop the Canal area after transfer to Panama of U.S. military and Canal properties 1979-1999 under the Panama Canal Treaty to incorporate them into the Panamanian economy by managing, organizing, planning,and disposing of all such properties.

(See details, GO TO ARI history and operations.)