US & EU Sanctions

Panama Canal is a marvel of maritime architecture and facilitates global ocean borne trade. The progressive development did not take place overnight though . Panama was targeted as a facilitator in illicit trade of petroleum and crude of Iran and after the conflict in Ukraine a fresh salvo has been fired against the country by a leading US Senator. The US and EU have imposed sanctions and trade embargoes against Russian oil and gas exports in an effort to slash its revenues with the ostensible aim of curbing Russia’s financial ability to sustain its war machine in Ukraine.The Panama Maritime Authority has deflaged almost 186 tankers in the recent part which instead of appeasing the US has only drawn Iran’s ire.

Courtesy Encyclopaedia Britannica

Panama  Ships Marriage Registry

A study of the Panama ship registry system is intriguing as primarily in this day and age of digitalisation and artificial intelligence it appears to be at a disconnect with the rest of the shipping world. A shipping vessel can be registered online in Panama as a Panama flag with minimum of efforts. To complement online registry and to save the expense of dry docking it has opened numerous consulates and shipping registry offices worldwide. After amendments in the maritime law of Panama in the year 2008 a digital repository has been established , accessible through internet, but the worrisome aspect is that the survey and inspection controls are notoriously lax except for vessels that are twenty years or older. At the instance of the booming cruise industry and for convenience marriage certificates can be issued by the Master of a vessel registered in Panama to be later recorded in the Panama Civil Registry.

Dual Ships Registry

Panama is the world leader in registration of crafts and ships and the US with its overseas fleets is trailing behind. The Panama Maritime Authority offers package deals and premiums for different tonnage of vessels ranging from yachts to super tankers. The cost of registration may decrease with the number of ships registered by a fleet. Surprisingly its own fleet is minuscule and comprises mostly of tugs and pilot supporting crafts. Any foreign entity can establish a corporation in Panama and register its vessel or vessels as the case may be. Dual registration is permitted. Taxes are non existent and after recent amendments in the maritime law of Panama ships are entitled to automatic renewals. The terms “ shell corporation”  , “ flag of convenience “ and “ open registry “ are associated with ships registered in Panama. Any ship or fleet owner desirous of jumping in the fray for the huge profits to be made from illicit cargoes can transfer its registration to the Panama flag with a minimum of documentation. Prior certification is accepted and it suits clandestine shipping as the expense of dry docking is done away with.

IMO Turns a Blind Eye

The Panama Maritime Authority certifies personnel for navigating its waterway and the same is accepted by the International Maritime Organization (IMO). This seems paradoxical as on one hand the IMO is pursuing green fuels like hydrogen and on the other hand acquiescing in the likelihood of environmental maritime disasters and spills in the  event of such unsafe vessels capsizing off coasts as occurring nowadays perhaps due to the easy profits to be made in illicit smuggling of fuel cargoes.

By Nadir Mumtaz