However, events in Panama (the worsening internal political crisis during the latter part of the Manuel Noriega regime from 1987 through 1989) and elsewhere in the region as well as in Europe (1989-1990) were to have a profound impact on continued treaty implementation planning during that period, forcing changes in some of the basic assumptions as well as timing of planned execution of phases of the planning.

In July 1987, the United States suspended military and economic assistance to Panama in protest against a government-sponsored attack on the American Embassy in Panama City in late June following a period of several public demonstrations against the Noriega regime since early June of that year. Another reason for the suspension (which affected training as well as other security assistance funding for the Panamanian military) was the deteriorating human rights situation in Panama. In December 1987, the U.S. Congress made mandatory the suspension of such assistance to Panama (except humanitarian and scholarship assistance), with resumption of such aid conditioned on U.S. presidential certification of key democratic reforms.

As the crisis intensified by 1989, it became increasingly obvious that there was not the political will to consider any further turning over U.S. military properties to Panama while the Noriega regime was in power. Noriega's nullifying the May 1989 presidential election results followed by repressive tactics and continued harassment of military personnel, family members, and operations by the Panamanian military did not mitigate the situation.

Another factor in play was the Treaty requirement for reversing the nationalities of the Administrator and Deputy Administrator of the Panama Canal Commission on January 1, 1990. (Until that date, the Administrator was American and the Deputy Administrator was Panamanian, with the roles to be reversed on that date for the final decade of the Treaty.)

After rejecting the Noriega regime's nomination for the first Panamanian Administrator in late 1989, President George Bush asked PCC's Deputy Administrator Fernando Manfredo to serve as acting Administrator from January 1, 1990, until a suitable nomination was received from Panama. (The Treaty specified that Panamanian nationals for the positions of Administrator, Deputy Administrator, and the four Panamanian members of the PCC Board of Directors be proposed by Panama to the U.S. Government for appointment to such positions by the latter.) Manfredo served as acting Administrator until September 1990 when Gilberto Guardia F. was sworn in after his nomination (proposed by Panamanian President Guillermo Endara and nominated by President Bush) was confirmed by the U.S. Senate.

Nevertheless, in the face of an intensifying disinformation campaign against the United States waged by the Noriega regime, U.S. Government agencies, including SouthCom insisted that they would continue to abide by the Panama Canal Treaties, including publicly announcing in December 1988 a list of proposed candidate sites for the eventual relocation of SouthCom headquarters. (That list was later superceded in 1994 by a much more extensive list of proposed sites after additional studies were conducted on the SouthCom relocation. Miami. one of the last candidate sites added to the list, was the one chosen in 1995.) Maintaining the integrity of the Panama Canal Treaties was to become one of the four principal reasons for Operation Just Cause.

Elsewhere, with the fall of Communism and the dissolution of the Soviet Empire, the Soviets' surrogate in Latin America (Cuba) lost the significant economic and military aid that had for years helped it to be a major threat to the region. Likewise, the surprise voting out of power of the Sandinistas in Nicaragua in February 1990 further diminished the serious security threats facing the region.

Planning resumed with revised guidance.

Following the U.S. military's Operation Just Cause (December 20, 1989) and the restoration of a democratic government in Panama (President Guillermo Endara who had won the May 1999 elections, nullified by Noriega three days later), the United States resumed the planning process in 1990 but with a somewhat different focus.

The abolishment of the Panamanian military (the Panama Defense Forces) by the Panamanian government following Operation Just Cause necessitated some changes in the philosophy guiding the planning process. Most notably was consideration for the intended end use of transferred properties. The planning for previous U.S. military property transfers (those effected 1979-1984) assumed that military facilities (bases, barracks, training ranges, etc.) would be used by the Panamanian military for like purposes, which generally occurred.

Beginning in 1990, earlier plans were revised to comply with new U.S. Government policy and Department of Defense guidance to execute the military drawdown in Panama in a controlled, systematic fashion which would provide the Government of Panama the greatest opportunity to re-utilize the transferring properties to their maximum economic benefit. There was also the desire to work with the Panamanian government to develop the best conditions for a successful and smooth transfer of facilities with the least disruption to the Panamanian economy. However, decisions on how to make the most effective use of transferred properties were Panama?s challenge.

Final plan approved in 1992.

The Panama Canal Treaty Implementation Plan (PC TIP), approved by the Secretary of Defense on February 3, 1992, superseded all earlier related plans and provided conceptual guidance and direction to all U.S. Department of Defense agencies in carrying out the phased withdrawal of the U.S. troops in Panama and the gradual transfer to Panama of all the U.S. military controlled installations, facilities, and lands by the end of 1999. It was designed as a flexible and dynamic plan to be updated annually, giving the SouthCom commander in chief the opportunity to make adjustments as necessary to fulfill his responsibilities.