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Panama Sets Rules to Expedite Revoking Sanction Busters’ Registration 

Panama flag
Panama set a new framework to expedite cancelling registrations of sanctioned vessels - Panama flag photo Pete Unseth (CC BY-SA 4.0)

Published Oct 21, 2024 4:34 PM by The Maritime Executive

 

The Panama Maritime Authority (PMA) introduced a new legal mechanism enabling the immediate revocation of registration and navigation licenses for vessels in its registry that are placed on international sanction lists. It is the latest in a series of steps Panama is taking to enable it to purge its registry after international pressure and criticism from activists.

On October 18, Panama published an official decree authorizing the new steps to speed the process for the cancellation of vessels or registered owners listed by the U.S.’s Office of Foreign Asset Control, the UN’s Security Council listing of assets tied to terrorism, the European Union, or UK sanctions. Under the new legal framework, the Directorate General of Merchant Marine will submit a report to the PMA administrator recommending cancellation and after review, it will authorize the process to proceed through a formal declaration.  They explained in the past the legal process would take months to cancel a single vessel.

Earlier in 2024, U.S. officials met with Panama to discuss the issues that have come under increased scrutiny as Western authorities worked to stop the so-called shadow fleet maintaining Russia’s oil trade as well as the ongoing efforts to limit Iran’s oil trade. As the largest registry by number of vessels, Panama had historically had a large number of vessels that became involved in these trades. The NGO UANI (United Against Nuclear Iran), for example, highlights that a quarter of all the vessels it has tracked in the Iranian oil trade are registered in Panama.

As part of the new regulation, Panama notes that organizations it recognizes will also be prohibited from offering classification or certification services to vessels undergoing or subject to cancellation. Financial institutions will also be informed of the vessel’s status, but active mortgages registered with the Director General of Public Registry will remain intact to ensure creditors can enforce their rights.

Panama announced at the beginning of October its intent to streamline the process to automatically expelling sanction busters from the ship registry. They said that at the time, they would not negotiate with owners who were found to be in violation.

The Panama Registry has been working aggressively in the past few years to clean its roles. The Panama Maritime Authority said in 2023 that it had canceled more than 6.5 million gross tons of shipping since July 2021, for issues related to Iran, North Korea, or vessels included in the list of international sanctions.
 

Top photo by Pete Unseth (CC BY-SA 4.0)