07 October
2024
The growth of the shadow fleet and the imposition of US, EU and now UK sanctions against vessels involved in sanctions evasion or other illegal activities has increased pressure on leading registries to increase enforcement and deny vessels registration. The Panamanian Maritime Authority (PMA) has highlighted several previous attempts to clean up its registry and is now announcing new steps to strengthen compliance.
Among the latest moves, the PMA says it now has the power to automatically cancel the registration of any vessel found to be involved in illegal activity. It would also strengthen the enforcement of de-registration of vessels that change their flag to avoid sanctions.
Panama emphasizes that it is taking these measures “in response to the recent inclusion of seven Panamanian-flagged vessels on the Office of Foreign Assets Control (OFAC) list.
Calls for a crackdown have been mounting, including a visit by US State Department officials earlier this year to discuss the registry. Based on the history and size of the Panama Papers, authorities have said in the past that it needs to be cleaned up, highlighting their previous efforts.
Critics, such as the NGO UANI (United Against Nuclear Iran), however, point out that Panamanian-registered vessels continue to be involved in the illicit trade in Iranian oil, while recent sanctions also target Panamanian-registered vessels used to transport Russian oil UANI, for example, says a quarter of all vessels it tracks in the Iranian oil trade are registered in Panama.
The Registry is adamant that it will not negotiate with ships seeking to misuse it and will use established legal mechanisms to take action. There are legal mechanisms for canceling the registration of vessels in the sanctions lists. Other reasons for automatic cancellation include the use of the vessel for smuggling, illegal trade, piracy or other crimes.
The PMA highlights other steps it is taking to further strengthen enforcement, including an internal reorganization to strengthen its monitoring and enforcement department. Last month, they issued a circular setting out the prerequisites for flying the flag and allowing due diligence on the vessel, its owner and its operator. They also signed the Registry Information Exchange Agreement, which is designed to prevent vessels from moving from one registry to another to avoid sanctions or engage in illegal activities.
Panama's Merchant Navy General Administration says it is evaluating additional strategic measures that will allow the vessels to be withdrawn quickly.