Panama: Latest Developments
The Panamanian Ship Registry has announced a series of measures aimed at targeting so-called “shadow vessels,” which are ageing tankers used to facilitate shipments of oil and other cargoes without involving Western companies. The registry will no longer allow such vessels to obtain flag status, and for those already registered, safety inspections and certificate verification will be stepped up.
The move is a response to the increasing use of these shadow vessels by countries subject to US and European sanctions, including Russia and Iran. These countries have turned to ageing vessels to avoid involving Western companies in their shipping activities. As a result, Western governments have stepped up enforcement actions against specific vessels and shipping companies, leading to an increase in vessel detentions.
Significance of Panama’s Decision
The Panamanian Ship Registry’s decision is significant because Panama’s flag registry is the second-largest in the world. The registry has previously granted registration to large numbers of high-risk vessels, including those not currently subject to sanctions. Windward, a maritime intelligence company, estimates that nearly 200 vessels considered high-risk by their definition are currently flagged in Panama and are over 15 years old.
International Responses
The US has also taken action against these shadow vessels. In the past week, the Office of Foreign Assets Control (OFAC) designated more than 60 vessels for their role in shipping Iranian oil and cargo. The Panamanian Maritime Authority (AMP) has announced that it will cancel the registration of 17 vessels sanctioned by the US.
The AMP’s decision demonstrates a “zero-tolerance policy regarding the misuse of the ship registry.” This crackdown is expected to drive owners of older tonnage toward registries with looser oversight, accelerating the record levels of flag-hopping seen across the commercial fleet. Flag-hopping refers to the practice of switching a vessel’s registration to avoid detection.
Impact on the Maritime Industry
The EU has also taken action against companies that manage flag registries. Last month, the bloc announced sanctions against UAE-based Intershipping Services LLC, which operates flag registries in Gabon and Comoros. The company had been flagging vessels transporting Russian oil, including those that have “regularly engaged in high-risk shipping practices.” The industry impact of these measures is significant.
The crackdown on shadow vessels will likely lead to increased costs for shipowners and operators as they are forced to comply with stricter regulations. However, it also aims to minimize the risk of detentions and ensure that the maritime industry complies with international regulations.
Original Article: Panama to block flag registration for shadow fleet — Gtreview