By GMM News | 2024-11-01 | International Shipping News |
The Panama Maritime Authority (PMA) is taking a decisive move to safeguard the integrity of the world’s largest ship registry, introducing strict legal measures aimed at vessels appearing on international sanctions lists.
The new framework enables the immediate cancellation of a vessel’s registration and navigation licenses, significantly ramping up Panama’s response to growing global sanctions on illicit maritime activities.
The changes were formalized with the publication of Executive Decree No. 512 on October 18, establishing the conditions under which the PMA can revoke the registration and licenses of any vessel within Panama’s merchant fleet. This applies to vessels found on sanctions lists issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the United Nations Security Council, the European Union, and the United Kingdom.
The PMA has emphasized that all navigation documents issued by the authority will be invalidated if a vessel is sanctioned. Furthermore, organizations under Panama’s jurisdiction are prohibited from offering classification or certification services to any vessel under review for cancellation.
The Panama Ship Registry, encompassing more than 8,000 vessels and representing 250 million gross tonnage, remains a global leader in maritime commerce. As sanctions become an increasingly powerful tool to curb destabilizing actions by nations like Russia, Iran and Venezuela, international ship registries have found themselves under scrutiny.
The PMA’s enforcement of these measures demonstrates its commitment to international standards and Panama’s reputation as a leading flag state. The decree allows Panama’s Directorate General of Merchant Marine (DGMM) to propose deregistration to the PMA Administrator for final approval.
This new measure comes as a response to a growing list of sanctions announced by Western nations to counter activities such as illegal oil smuggling. Just last month, OFAC sanctioned over a dozen entities and vessels involved in transporting Iranian crude oil to Syria and East Asia on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hezbollah. Among the sanctioned vessels were seven Panama-flagged ships, highlighting the urgency for Panama to tighten its regulatory grip.
In response, the PMA reinforced its stance, saying: “We will automatically cancel the registration of any vessel found to be involved in illegal activities or that changes its flag to evade sanctions.”
Executive Decree 512 reinforces Panama’s role in preventing vessels under its flag from contributing to illegal trade or sanctions evasion and ensures that Panama’s regulatory framework aligns with international efforts to combat terrorism financing, arms smuggling, and other destabilizing activities linked to sanctioned vessels.
Crucially, while registration can be revoked, any active mortgages associated with these vessels remain valid, allowing creditors to enforce their rights. Financial institutions will be notified about the vessel’s status to ensure transparency and legal compliance.
Panama’s new legal mechanism is expected to have a significant impact on vessel owners and operators, particularly those engaged in risky or illicit activities. By strengthening its regulatory controls, Panama aims to deter bad actors from using its flag as a shield for sanctionable conduct.
As the global shipping industry increasingly faces scrutiny for its role in facilitating illegal transactions, Panama’s decisive actions are likely to prompt other flag states to review their own regulatory frameworks.
