Panama Intensifies Crackdown on Sanctioned Vessels with Registry Cancellations

The Panama Maritime Authority (AMP) has initiated proceedings to cancel the registration of 17 vessels recently placed on the U.S. Office of Foreign Assets Control (OFAC) sanctions list. The action comes as part of Panama’s broader effort to strengthen oversight of its flag registry, the world’s second-largest with over 8,000 vessels totaling 250 million GT.

“The AMP reiterates its firm commitment to a zero-tolerance policy against the misuse of the Ship Registry, as well as the exclusion of vessels, companies, suppliers, and other stakeholders that are included in international sanctions lists recognized by the Panamanian State,” the Panama Maritime Authority (AMP) stated in its announcement.

The sanctions also target a Panamanian company and citizen. Beyond the registration cancellations, Panama is implementing “corresponding measures against the economic group and the sanctioned company,” according to the AMP statement.

This enforcement action follows Panama’s October 2024 pledge to penalize vessels sanctioned by the U.S., European Union, UK, and United Nations, including “automatically [cancelling] the registration of any vessel found to be involved in illegal activities or that changes its flag to evade sanctions.”

The legal framework for the de-listing measures stems from Executive Decree No. 512, issued in October, which empowers the AMP to unilaterally remove vessels from its registry if their owners appear on international sanctions lists.

Panama has faced criticism from organizations like United Against Nuclear Iran (UANI), which claimed the country “had not taken sufficient action against sanction violators.” UANI’s analysis revealed that 17% of vessels suspected of transporting Iranian oil—94 out of 542 tracked vessels—currently sail under Panama’s flag.

In response to such criticism, Panama points to its deregistration of more than hundreds ships since 2019 as part of compliance efforts with the United Nations Convention on the Law of the Sea. More recently, in March 2025, the authority deregistered 107 vessels linked to sanctions violations.

Panama has also implemented several preventive measures. Last Friday, the AMP introduced a new age restriction policy prohibiting the registration of oil tankers or bulk carriers older than 15 years as part of efforts to combat the global “shadow fleet.”

Additionally, the “Panama Flag Precheck Process,” introduced in September 2024, enhances due diligence procedures for ship registration, while problematic vessels now undergo mandatory quarterly inspections. Panama also participates in the Registry Information Sharing Compact (RISC), a memorandum with other flag states including Liberia and the Marshall Islands to share information about vessels rejected due to potential sanctions violations.

“The Panamanian Ship Registry will not negotiate with those seeking to use it improperly and will apply the established legal mechanisms to act according to due process and legal security,” the PMA affirmed in its statement.

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