Panama Continues Shadow Fleet Crackdown with World-First Mandatory Traceability for Ship-to-Ship Transfers

The Panama Ship Registry has become the first naval registry globally to implement mandatory traceability for ship-to-ship (STS) operations of hydrocarbons conducted on the high seas.

Under the new requirements, any Panamanian-flagged oil vessel with gross tonnage of 150 tons or greater must notify the Panama Maritime Authority (AMP) at least 48 hours before conducting STS maneuvers, providing comprehensive technical and logistical details of the operation.

“Non-compliance with this obligation – depending on its severity – may result in the cancellation of the registration of the ship in Panama,” states article 9 of the DGMM resolution.

The measure, which took effect on August 6, is outlined in Resolution No. 106-035-DGMM from the General Directorate of Merchant Navy. Mandatory reporting requirements include vessel identification details, precise timing and geographical coordinates, operational mode specifications, hydrocarbon type and quantity information, estimated duration, designated contact personnel, and confirmation of MARPOL Agreement compliance.

The regulation directly addresses “the growing use of boats for illicit operations such as the covert transport of crude oil, evasion of sanctions and lack of environmental controls, practices associated with the so-called ‘ghost fleet.'”

This action comes amid Panama’s broader crackdown on shadow fleet operations. The Panama Maritime Authority recently initiated proceedings to cancel the registration of 17 vessels placed on the U.S. Office of Foreign Assets Control (OFAC) sanctions list, part of Panama’s “zero-tolerance policy against the misuse of the Ship Registry.”

Panama has faced criticism from organizations including United Against Nuclear Iran (UANI), which reported that 17% of vessels suspected of transporting Iranian oil currently sail under Panama’s flag.

The registry has responded with multiple enforcement measures. In March 2025 alone, the authority deregistered 107 vessels linked to sanctions violations.

Additional preventive measures introduced by Panama include a new age restriction policy prohibiting registration of oil tankers or bulk carriers older than 15 years, enhanced due diligence procedures for ship registration, and participation in the Registry Information Sharing Compact (RISC) with other major flag states.

Panama maintains that these actions “align with the regulations of the International Maritime Organization (IMO) and reinforce Panama’s commitment as a responsible flag-folding State, by promoting maritime safety, operational transparency and the protection of the marine environment.”

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