Panama, known for having the largest ship registry in the world, has implemented stricter registration policies in response to pressure to crack down on illicit trades like oil smuggling, particularly from Iran and Russia. The new executive decree allows for the revocation of maritime vessels’ licenses and registrations if they are sanctioned by the US, UK, UN Security Council, or EU. This move aims to protect the prestige and reputation of the Panamanian flag and maintain a registry free of international sanctions.
The Panama Maritime Authority (PMA) has been tasked with carrying out any registry cancellations. This action is seen as a response to pressure from the US and other allies to prevent illicit activities through Panama’s waters. Additionally, Panama has pushed back against international scrutiny, arguing it has been unfairly stigmatized in the process.
Experts believe the executive decree will have a significant impact on vessel owners and operators engaged in risky or illicit activities. Other “flag of convenience” states have also taken steps to stamp out vessels involved in illicit activity. For example, Palau revoked the registration of three liquefied natural gas carriers after they were hit with US sanctions over ties to Russian gas.
The response to international sanctions by Panama reflects a broader effort by key shipping nations to crack down on illicit trade and maintain the reputation and integrity of their registries. This move is expected to prompt other flag states to review their own regulatory frameworks and take similar actions to prevent vessels from engaging in illicit activities.
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