- Panama to withdraw its flag from more vessels that violate sanctions and international legislation.
- About 60 ships linked to Iran and Syria from the Panamanian registry in recent months.
- After the re-imposition of sanctions in 2018, Panama removes a fleet of 59 tankers from the country’s registry.
- A vessel losing its flag, typically triggers loss of insurance and classification if it does not immediately finds another flag.
- Panama being the world’s largest shipping fleet with almost 7,100 vessels registered, saw a decrease in number of vessels from over 8,000 in 2017.
- Liberia now has almost 3,800 registered ship, followed by Marshall Islands with 4,100.
According to an article published in Reuters, Panama will withdraw its flag from more vessels that violate sanctions and international legislation, as mentioned by the country’s maritime authority.
This was followed by the removal of about 60 ships linked to Iran and Syria from the Panamanian registry in recent months.
After the re-imposition of sanctions on Iran by Washington in 2018, Panama’s former president Juan Carlos Varela gave a nod to remove a fleet of 59 tankers from the country’s registry.
A major number of vessels were owned by Iranian state-run companies but they also included ships linked to oil deliveries to Syria, the sources added.
Grace 1 Supertanker
Grace 1, a separate supertanker, made its way to Gibraltar in early July, where it was seized by British Royal Marines on suspicion of violating sanctions against Syria.
Gibraltar authorities said that the vessel was fully loaded with crude suspected to be bound for Syria’s Banyas refinery,
The vessel arrived in Gibraltar showing the Panama name at its hull, but the Panamanian government later clarified it had been removed from its registry on May 29.
Rafael Cigarruista, general director of Merchant Marine from Panama’s Maritime Authority, affirmed Reuters that Panama will maintain its flag withdrawal policy.
Panama’s legislation and maritime security rules
He also added that their intention is to improve the fleet’s percentage of compliance, with respect to Panama’s current legislation and maritime security rules. Cigarruista did not provide details on coming action or targeted fleets.
The exact process leading up to the July detention of the Grace 1 remains unclear. Spain, which does not recognize Britain’s sovereignty over Gibraltar, said it would study whether Britain’s actions violated its territorial water claims.
Iran calls for release of Grace 1
Iran called on Britain to immediately release the Grace 1 and warned of reciprocal measures after three Iranian vessels tried to block a British-owned ship passing through the Strait of Hormuz, on Thursday.
As the United States seeks to increase pressure on Iran, Panama says it is trying to maintain its registry clean from sanctioned ships and the companies involved.
Flag state on Vessels
According to the International law, every merchant ship must be registered with a country, known as its flag state, which has jurisdiction over the vessel and is responsible for safety inspections and checking the crew’s working conditions.
When a vessel loses its flag, it typically triggers lost of insurance and classification if it does not immediately finds another flag.
Easy registration and no income taxes
Panama has the largest shipping fleet in the world with almost 7,100 vessels registered. The Central American country offers foreign vessel owners easy registration, the ability to employ foreign labor, and does not tax the income of the foreign owners.
Even being the world’s largest, the registry has seen a decrease in its number of vessels from over 8,000 in 2017. Liberia now has almost 3,800 registered ship, followed by Marshall Islands with 4,100.
Experts say an outdated and slow mechanism for registering vessels in Panama compared with other flag countries is the reason for the decline in the number.
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Source: Reuters
