In a significant move, Panama has taken steps to tighten its control over the ships registered under its flag. This new action aims to make it much faster and easier for Panama to cancel the registration of vessels that are violating international sanctions. This change is essential as it comes amid increasing pressure from other countries that want to stop illegal oil trading, especially involving countries like Russia and Iran.
New Rules for Quick Action
Panama published a new decree that allows its Maritime Authority to quickly revoke the registration and navigation licenses of ships placed on international sanctions lists. These sanctions lists are official documents that name companies or countries that are not allowed to trade or do business with others because they are involved in illegal activities. This includes things like terrorism or trade violations.
Under the new rules, when a ship is found on a sanctions list, a department within the Panama Maritime Authority, called the Directorate General of Merchant Marine, will create a report. This report will recommend whether to cancel the ship’s registration. After reviewing this report, the PMA administrator will give the go-ahead to begin the cancellation process. In the past, this process could take several months for a single vessel, but the new regulations will make it much quicker.
This new approach shows the country’s determination to clean up its ship registry. For many years, Panama has had the largest number of vessels registered in the world. Unfortunately, this has also meant that a significant number of these ships have been involved in illegal activities.
Pressure on Panama from International Community
The recent changes are partly due to increased scrutiny from other nations. In 2024, officials from the United States met with their counterparts in Panama to discuss these issues. There has been a lot of concern about what is called the “shadow fleet.” This term refers to ships that are not officially recognized and are used to transport oil from countries that are under sanctions.
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For example, the UANI (United Against Nuclear Iran) organization reported that about 25% of the ships it tracked that were involved in the Iranian oil trade were registered in Panama. This information has raised alarms, leading to calls for Panama to take action against these vessels. By speeding up the process to remove these ships from its registry, Panama aims to show that it is taking these concerns seriously.
The United States and other countries have been working hard to stop the illegal oil trade that has allowed countries like Russia and Iran to bypass sanctions. By taking swift action against sanction busters, Panama can help support these international efforts.
Impact on Ship Owners and Financial Institutions
Along with the new rules for canceling registrations, Panama has also introduced measures to restrict what organizations can do with these vessels. Any organizations that are recognized by Panama will no longer be allowed to offer classification or certification services to ships that are undergoing cancellation. This means that if a vessel is found to be involved in illegal activities and is in the process of being removed from the registry, it won’t be able to get the necessary papers to operate.
Additionally, financial institutions will also be informed of the vessel’s status. This means that banks and other lenders will know if a ship is being canceled from Panama’s registry. However, there is a crucial point to note: any active mortgages that are registered with the Director General of Public Registry will still be in place. This allows creditors to enforce their rights, even if the ship’s registration is canceled.
In recent years, Panama has been very proactive in cleaning up its maritime registry. The Panama Maritime Authority reported that since July 2021, it has canceled more than 6.5 million gross tons of shipping linked to issues related to countries like Iran and North Korea. These countries are often subject to international sanctions because of their actions, including nuclear weapons development and other illegal activities.
With these changes, Panama is sending a clear message that it is committed to fighting against illegal maritime activities. By expediting the revocation of vessels linked to sanctions violations, Panama is aiming to improve its reputation on the global stage.
