Panama City, the U.S. special envoy called upon Panama to prevent Iranian vessels from using their flag. This action would hinder Iran from bypassing sanctions set by the U.S. government.
The tiny Central American country stands as a global pioneer in providing “flags of convenience” services. These allow shipping corporations to register their vessels under foreign jurisdictions where no connection exists, in exchange for payment and exemption from regulatory supervision.
Recently, concerns have been raised by Abram Paley, the US deputy special envoy for Iran, who states that Iran and related entities are exploiting Panama’s flag registry system in an attempt to bypass the imposed sanctions.
Paley’s visit aimed to verify that Panama’s ship registry and legal jurisdiction were not exploited by entities attempting to dodge sanctions on Iran. The Panama Maritime Authority reported that the nation had registered 8,540 ships, which accounted for approximately 16% of the worldwide fleet.
Washington harbored concerns that some of these vessels might be utilized by Iran to transport oil or related products, thereby circumventing the sanctions. Since the United States’ withdrawal from the significant nuclear agreement in 2018, Iran has faced crippling sanctions.
As per Paley’s statement, a minimum of six Panamanian-flagged vessels have reportedly breached the imposed sanctions since the beginning of January. In a social media post on platform, Panama’s Deputy Foreign Minister, Vladimir Franco, mentioned his meeting with Paley to discuss potential “maritime cooperation” between the two nations.
The United States alleges that Iran funds Yemen’s Houthi rebels, as well as groups like Hezbollah and Hamas, using the income generated from oil sales. According to experts, ship owners exploit the “flag of convenience” system to evade environmental standards, labor laws, and sometimes even conceal the true ownership of vessels. Paley stated;
“We anticipate that the Panamanian government will maintain collaboration with us, adhering to their domestic legislation and fulfilling their international responsibilities.”
