In accordance with the Torrijos–Carter Treaties, Panama assumed full control of the Panama Canal Zone from the United States.

The Torrijos–Carter Treaties are two treaties signed by the United States and Panama in Washington, D.C., on September 7, 1977, which superseded the Hay–Bunau-Varilla Treaty of 1903. The treaties guaranteed that Panama would gain control of the Panama Canal after 1999, ending the control of the canal that the U.S. had exercised since 1903. The treaties are named after the two signatories, U.S. President Jimmy Carter and the Commander of Panama's National Guard, General Omar Torrijos.

The Panama Canal Zone, also known as just the Canal Zone, was a concession of the United States located in the Isthmus of Panama that existed from 1903 to 1979. It consisted of the Panama Canal and an area generally extending five miles (8 km) on each side of the centerline, but excluding Panama City and Colón. Its capital was Balboa.