Panama Intensifies Crackdown on Sanctioned Vessels with Registry Cancellations

The Panama Maritime Authority (AMP) has launched proceedings to revoke the registration of 17 vessels recently added to the U.S. Office of Foreign Assets Control (OFAC) sanctions list. This decisive action is part of Panama’s ongoing initiative to enhance oversight of its flag registry, which ranks as the second-largest globally, encompassing over 8,000 vessels with a total of 250 million gross tons.

Strengthening Compliance and Oversight

The AMP has reiterated its unwavering commitment to a zero-tolerance policy against the misuse of its Ship Registry. In a statement, the authority emphasized the exclusion of vessels, companies, suppliers, and other stakeholders listed on international sanctions recognized by the Panamanian government. This latest enforcement action not only targets the vessels but also a Panamanian company and citizen associated with the sanctions.

This move follows Panama’s pledge in October 2024 to impose penalties on vessels sanctioned by the U.S., European Union, UK, and United Nations. The AMP has made it clear that any vessel found to be involved in illegal activities or attempting to evade sanctions by changing its flag will face automatic cancellation of its registration. The legal foundation for these de-listing measures is rooted in Executive Decree No. 512, which grants the AMP the authority to unilaterally remove vessels from its registry if their owners appear on international sanctions lists.

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Panama has faced scrutiny from organizations such as United Against Nuclear Iran (UANI), which criticized the country for not taking sufficient action against sanction violators. UANI’s analysis indicated that 17% of vessels suspected of transporting Iranian oil—94 out of 542 tracked vessels—currently operate under Panama’s flag. In response, Panama highlighted its efforts, citing the deregistration of hundreds of ships since 2019 to comply with the United Nations Convention on the Law of the Sea. Most recently, in March 2025, the authority deregistered 107 vessels linked to sanctions violations.

New Policies and Preventive Measures

In addition to the recent cancellations, the AMP has implemented several preventive measures to bolster its regulatory framework. Last Friday, the authority introduced a new policy prohibiting the registration of oil tankers or bulk carriers older than 15 years. This initiative aims to combat the global issue of the “shadow fleet,” which consists of vessels operating outside of regulatory oversight.

Furthermore, the AMP has established the “Panama Flag Precheck Process,” which enhances due diligence procedures for ship registration. Under this process, vessels deemed problematic will now undergo mandatory quarterly inspections. Panama is also actively participating in the Registry Information Sharing Compact (RISC), a collaborative effort with other flag states, including Liberia and the Marshall Islands, to share information about vessels rejected due to potential sanctions violations.

The AMP has made it clear that it will not negotiate with those attempting to misuse the Panamanian Ship Registry. The authority is committed to applying established legal mechanisms to ensure due process and legal security in its operations.