Panama to revoke licences for sanctioned ships

Western-sanctioned vessels registered in Panama are to have their registrations revoked following an executive decree by the country’s president.

On 18 October, 2024, Panama’s President Jose Raul Molino issued Executive Decree No 512, which outlines the cancellation of vessels or registered owners sanctioned in lists issued by or in the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), The United Nations (UN) Security Council and its committees, the EU’s Consolidated Financial Sanctions List and the UK’s Financial Sanctions Targets list.

The Panama Maritime Authority (AMP) said the new legal mechanism means vessels listed in Panama’s ship registry that appear on international sanctions lists will have their registration and navigation licences immediately revoked. 

“Any other navigation documents issued by the AMP will also be invalidated,” the AMP said, noting that Panama’s Directorate General of Merchant Marine (DGMM) will submit a report to the AMP administrator, recommending the cancellation of the vessel’s registration. Upon review, the administrator will authorise the DGMM to proceed with the cancellation through a formal resolution.

The AMP said that active vessel mortgages registered with Panama’s Directorate General of Public Registry, will remain intact to ensure creditors can enforce their rights and that financial institutions will be informed of vessels’ status.

For vessels undergoing or subject to cancellation by the Republic of Panama, organisations recognised by or under the jurisdiction of the flag state are prohibited from offering classification or certification services. 

The AMP clarified that Executive Decree 512 is in addition to and does not replace other existing regulations concerning vessel cancellation under the Panama Ship Registry.

The AMP said it remains “dedicated to protecting national interests by acting swiftly and efficiently to minimise the risks posed by vessels included on sanctions lists.”

Prior to the executive decree, cancellation from Panama’s Ship Registry was a lengthy process involving mulptiple bureaucratic entities that often took months to complete. The executive decree streamlines the process.