History of the Canal Zone


The history of the Panama Canal dates back to the years of the Spanish occupation, although the ancient settlers were already exploiting the possibilities that the isthmus offered to shorten distances. In 1534, Carlos V proposed to study a new route thorough the Isthmus of Panama to get to Peru avoiding the dangers of the Cabo de Hornos route that sought to improve the one already in used, known as Camino Real de Nombre de Dios. 

Three centuries later the French began the construction of the Canal in 1880 with an excavation plan presented by the prestigious engineer of the Suez Canal in Egypt, Fernando de Lesseps, but the political and financial problems added to the diseases of the area, ended the efforts after 20 years.

On November 18, 1903, after the separation of Panama from Colombia, the Canal Zone created with the signing of the Hay-Bunau Varilla Treaty. This zone comprises an approximate area of 140,000 hectares and eight kilometers that extended on both sides of the Canal. The borders divided Panama in two parts controlled by the United States of America, in 1979 when the Torrijos-Carter Treaty entered into force and they became the Reverted Areas of the Canal, a zone of sovereignty between the United States and Panama, gradually passed into Panamanian hands on New Year’s Eve 1999, when the American flag was lowered for the last time in Balboa.

The Canal Zone, despite being used mainly for military purposes, lived independently of the Republic of Panama, more than 3000 American civilians as permanent residents with their families, with their own laws, their police force, public service companies, firefighters, hospitals, churches, schools, amusement areas, social clubs, cinemas and theaters, cafeterias, commissariats, playgrounds, golf courses, hotels and residential communities. 

With the withdrawal of the Americans and the transfer of this territory to Panamanian control, the area ceased to be for military use and left a historical and urban legacy in the reverted areas for residential, commercial, industrial and tourist purposes. This is how the Authority of the Interoceanic Region of Panama (ARI) is created in 1993 for "the custody, use and administration of the reverted assets", and two years later the Regional Plan for the development of the Interoceanic Region and the General Plan for the Use, Conservation and Development of the Canal Area, to use these areas in an orderly manner, guaranteeing the protection of the Canal's hydrographic basin.

Once the dissolution by Law of the ARI, the Reverted Assets Unit (UABR) is created, in order to continue with the economic development of the reverted assets for the greatest benefit for the country.