Panama Cancels Registration of 107 Sanctioned Vessels in Compliance Move

Panama’s Maritime Authority has announced the cancellation of the registration for 107 vessels identified on international sanctions lists, according to a statement released on March 28, 2025. This decision is part of Panama’s broader efforts to align its shipping policies with global standards and combat illegal maritime activities. The authorities emphasized that the deregistration aims to prevent the misuse of the Panamanian flag to bypass economic restrictions imposed on various countries and entities.

Traditionally recognized for its extensive shipping registry due to a streamlined registration process and favorable tax conditions, Panama has faced criticism for allowing vessels linked to sanctions violators to operate under its flag. The cancelled ships are reportedly owned by entities involved in transporting cargo for nations facing international sanctions, including Russia, Iran, and North Korea. While the full list of affected vessels has not been disclosed, the agency noted that the deregistration process was informed by data from international partners.

The decision impacts a range of vessels, from oil tankers to cargo ships, which have been used to transport goods subject to sanctions. As a result of losing their registration, these vessels will no longer be able to legally enter ports in most countries, secure insurance, or receive services under the Panamanian flag. Experts warn that this will significantly restrict their operational capabilities, forcing ship owners to either seek alternative jurisdictions or consider decommissioning their vessels.

This move by the Panama Maritime Authority responds to increasing pressure from the United States and the European Union. In recent years, both entities have urged “flag of convenience” countries to enhance oversight of their registries. In 2024, U.S. officials warned Panama to clean up its registry, threatening sanctions against local companies if action was not taken. The cancellation of these 107 vessel registrations demonstrates Panama’s willingness to cooperate, although earlier in March 2025, only 36 vessels were removed from the registry, indicating a possible acceleration of the process under external influence.

The decision has prompted a shift in activity within the shipping industry. Since the onset of the conflict in Ukraine in 2022, numerous sanctioned vessels have sought re-registration under the flags of Panama, Liberia, and the Marshall Islands to continue transporting oil, coal, and other goods. Heightened scrutiny in Panama may drive ship owners to consider less-regulated jurisdictions, such as Cameroon or Palau, despite those registries lacking the same level of authority and access to international ports.

As of March 28, 2025, Panama continues to review its registry, which includes over 8,000 vessels. Experts anticipate that the number of ships to be delisted may rise if Western pressure persists. For Panama, this decision carries both potential reputational benefits and economic risks, as the loss of registration revenue could impact a nation that heavily relies on its maritime sector. However, the government maintains that compliance with international standards remains its top priority.