Panama Maritime Authority Implements Strict Measures to Safeguard Ship Registry Integrity Amid U.S. Sanctions on Flagged Vessels Linked to Iranian Oil Shipments
The Panama Maritime Authority (PMA) has introduced a series of rigorous measures aimed at maintaining the integrity of its ship registry—the largest in the world—amid mounting pressure from international sanctions. The move comes after the U.S. Office of Foreign Assets Control (OFAC) imposed sanctions on seven Panamanian-flagged vessels for their involvement in transporting Iranian crude oil and liquid petroleum gas to Syria and East Asia on behalf of entities linked to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hezbollah.
Panama’s Ship Registry Under Scrutiny: Automatic Deregistration for Illegal Activities
The Panama Ship Registry, which boasts over 8,000 vessels totaling 250 million GT, is the world’s largest. To protect the registry from being misused, the PMA has announced stringent new rules. In an official statement, the PMA declared, “We will automatically cancel the registration of any vessel found to be involved in illegal activities or that changes its flag to evade sanctions.”
These measures are designed to curb the misuse of the Panamanian flag by ships attempting to circumvent sanctions. As part of its plan, Panama has:
- Reorganized Monitoring Systems: The Monitoring and Control Section has been transferred to the Maritime Ship Protection Department to enhance oversight capabilities.
- Introduced the Panama Flag Precheck Process: Launched in September 2024, this new process aims to improve due diligence for ship registrations, ensuring vessels are vetted more rigorously before being accepted under the Panama flag.
- Joined the Registry Information Sharing Compact (RISC): By joining RISC, Panama aims to prevent vessels from engaging in “registry-hopping”—a tactic used to evade sanctions by frequently changing ship registries.
In addition to these changes, the General Directorate of Merchant Marine is exploring additional measures for the swift removal of vessels found to be associated with illicit activities. These actions are backed by Article 49 of the General Law 57 of the Merchant Marine, which provides legal grounds for automatic cancellations.
No Negotiations with Sanctions Evaders
The PMA made it clear that it will not tolerate the improper use of its ship registry and will strictly enforce established legal mechanisms. “The Panamanian Ship Registry will not negotiate with those seeking to use it improperly and will apply the established legal mechanisms to act according to due process and legal security,” the PMA stated.
This stern warning underscores Panama’s resolve to distance itself from entities that engage in sanctionable activities and misuse the Panamanian flag to evade international scrutiny.
U.S. Sanctions: A Direct Catalyst for Tightening Regulations
The new measures follow a recent wave of U.S. OFAC sanctions targeting over a dozen entities and vessels involved in shipping Iranian crude oil and liquid petroleum gas. These shipments were intended for Syria and East Asia on behalf of groups such as the IRGC-QF and Hezbollah.
The vessels sanctioned by OFAC include several Panama-flagged ships, such as:
- ETERNAL SUCCESS (IMO: 9307633)
- ETERNAL 8 (IMO: 9232448)
- ETERNAL PEACE (IMO: 9259745)
- SERENE I (IMO: 9197832)
- FENG TAI (IMO: 9248473)
- CONFIDENCE P (IMO: 9178044)
- RIVAL (IMO: 9117818)
These ships were linked to the fleet of Syrian magnate Abdul Jalil Mallah and his brother Luay al-Mallah, both of whom were implicated in sanctions evasion schemes involving the transportation of Iranian oil.
Panama’s Commitment to Maritime Integrity
The tightening of registry rules is part of Panama’s broader commitment to ensuring that its maritime services uphold the highest standards of transparency and legal compliance. As the world’s largest ship registry, Panama faces a unique challenge in preventing its flag from being used to evade sanctions and facilitate illicit trade.
The measures introduced by the PMA signify a proactive approach to address potential abuses, bolster due diligence, and prevent the misuse of Panama’s globally recognized flag. By joining initiatives like RISC and enhancing internal controls, Panama is working to ensure that its registry remains a respected and trustworthy component of the international maritime industry.
Conclusion: A Global Example in Combating Sanctions Evasion
With international sanctions becoming more complex and far-reaching, Panama’s actions set a precedent for how flag states can protect the integrity of their registries. The Panama Maritime Authority’s decision to tighten ship registry rules and introduce more robust monitoring mechanisms sends a strong message to the shipping industry: there will be zero tolerance for those seeking to use the Panamanian flag for unlawful purposes.
As sanctions continue to reshape global trade dynamics, Panama’s commitment to combating evasion tactics underscores its role as a responsible actor in the international maritime community.
