Panama’s maritime authority has announced withdrawal of its registry flag from more vessels linked to Iran that violate international sanctions in a move designed to confirm its continued commitment towards upholding international legislation.
Iran is expected to incur the cost of violations as the move will deprive Iranian shipments from the possession of a flag state on its vessels, according to maritime news analysis media platforms.
As reported by Reuters on July 12th, under 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 loss of insurance and classification if it does not immediately find another flag.
The Maritime Authority of Panama (AMP) has removed 59 Iranian-linked ships from its registry, ShareAmerica, the US State Department-run platform said in February.
Panama is taking serious steps towards commitment to compliance with US sanctions and has pledged to keep its registry accounts clear from “sanctioned ships and companies involved in wrongdoing.”
“Panama will maintain its flag withdrawal policy,” Rafael Cigarruista, general director of Merchant Marine from Panama’s Maritime Authority said this week. “Our intention is to improve our fleet’s percentage of compliance regarding sanctions by international organisations, local legislation and maritime security rules,” he added.
The Seatrade Maritime News reported in February that Panamanian consuls around the world have been instructed not to accept any payments from vessels coming from Iran or its shipping companies. The move will make it harder for Iran to deliver oil to ports around the world and hamper its efforts to use ports and terminals.
The National Iranian Tanker Company registered more than 50 of its vessels in Panama after the United States lifted sanctions in 2016 under the Iran nuclear deal. The United States reimposed sanctions after pulling out of the deal in May 2018.
Countries and businesses can be hit with US sanctions if they continue doing business with Iranian banks, airlines, shipping companies and other entities.
“It’s very important for us as a flag country to preserve existing ties and grow closer to administrations that are members of the International Maritime Organisation,” Cigarruista said, when asked if Panama is following US guidance on sanction enforcement.
The Panamanian Maritime Authority said on July 11th that an Iranian oil tanker that British authorities seized off Gibraltar due to suspicion it was transporting oil to Syria in violation of European sanctions had not been flying the Central American nation's flag since May 29th, according to EFE, the Spanish news agency.
The authority said the Grace 1 had been delisted after Panama's National Security Council had issued an alert indicating the tanker "may be participating in terrorism financing, in support of the destabilising activities of some regions led by terrorist groups."
Sources from the Panamanian Ministry of Foreign Affairs explained to EFE that the decree is part of the efforts undertaken in recent years by Panama to fight against money laundering and financing of terrorism.
The president of the Panamanian Association of Maritime Law (APADEMAR), Francisco Linares, told EFE: “Panama is sending the message that it is a responsible country and complying with international rules, our flag provides a global service and, as such, we must ensure global security.”
The Iranian ships from which the Panamanian flag is to be withdrawn, Linares warned, will have to search “immediately” for another record that will allow them to sail and dock in ports: “Sailing without a flag in international waters is a very serious crime. It’s like being a pirate.”
Panama’s abidance to the sanctions against Iran is deeply rooted in Tehran’s attempts to abuse Panamanian-flagged vessels in suspicious circumstances. In 2014, the Israeli navy boarded and seized the Klos-C, a Panamanian-flagged Iranian arms ship carrying advanced M302 missiles bound for the Hamas-controlled Gaza Strip and two million kilograms of Iranian cement for Hamas’ attack tunnels, according to research by the Jerusalem Center for Public Affairs.
A July 2013 congressional hearing on homeland security documented “the acquisition by hundreds and perhaps thousands of Iranian nationals of legitimate, original passports and other national identity documents from Panama to operatives in the Quds Force, Ministry of Intelligence and other intelligence services in Iran” who can then “move across the region relatively undetected because they are no longer identifiable as Iranians.”
“Significant efforts must be made by the US Department of Homeland Security to strengthen oversight of Canal operations, and to provide Panamanian authorities with timely, actionable intelligence on Iranian shipping activities of concern taking place in the Western Hemisphere,” the hearing paper added.