Panama, the world’s largest ship registry, is implementing stricter registration policies to crack down on oil smuggling. A new executive decree issued by President Jose Raul Mulino will revoke the national registration of maritime vessels facing sanctions from the US, UK, UN Security Council, or EU, in order to protect the prestige of the Panamanian flag. The move has been praised by former US ambassador John Feeley, who sees it as a positive step to improve the country’s business climate.
Panama, known for its lax regulations and lower costs, has long attracted global shipping companies. However, recent pressure from Western countries to curb illicit trades, especially oil smuggling from Iran and Russia, has led to the crackdown. The Panama Maritime Authority has been tasked with carrying out registry cancellations, with immediate consequences for ships that lose their licences.
The executive decree is seen as a response to international sanctions, with experts noting that other flag states may follow suit in reviewing their regulatory frameworks. Panama has also pushed back against international scrutiny, with President Mulino seeking to remove the country from an EU list of tax havens during a visit to Paris.
Overall, the move is expected to have a significant impact on vessel owners and operators engaged in risky or illicit activities. Other “flag of convenience” states, such as Palau, have also taken steps to stamp out vessels involved in illicit activity. As Panama works to uphold its reputation in the maritime industry, the global shipping community is likely to see more stringent measures being implemented by flag states worldwide.
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