Panama Revamps Maritime Law to Boost Ship Registry Competitiveness

Comprehensive Review Initiates Significant Changes to Bolster Panama’s Position in Global Maritime Sector

Panamá

Panama Maritime Authority (AMP) Initiates Comprehensive Review of General Maritime Law to Enhance Competitiveness of Ship RegistryIn 2023, the Panama Maritime Authority (AMP) convened a task force comprising various maritime guilds and government entities for a thorough review of the General Maritime Law, known as Law 57, aiming to enhance the competitiveness of the Ship Registry and uphold Panama’s leading position in this sector worldwide.The General Maritime Law dictates the methods and classification of ship registries, economic incentives, maritime documents, various certifications for both vessels and seafarers, and all aspects related to the flagging process.The AMP stated, “The Panamanian State, concerning the Ship Registry, required international competitiveness strategies that contribute to the sustainable growth of the activity, in accordance with the international maritime sector.” It’s noteworthy that although the outcomes of this initiative were disclosed in 2023, the review and updating process commenced in 2020.Throughout the process, which involved a total of 188 articles, 70 were modified, 10 eliminated, and over 12 new articles proposed, all of which were approved by general consensus.These changes are expected to have an impact on maritime trade both within Panama and internationally. Rafael Cigarruista, Director-General of Merchant Marine, remarked, “These modifications aim to enhance the competitiveness of Panama’s Ship Registry to remain at the forefront of the maritime sector. This project, considered one of the pillars of the current Administration, entails an aggressive and comprehensive international marketing plan.”Modifications to the law primarily focused on the benefits for vessels seeking registration in Panama’s merchant marine, adjustments to the administrative procedures of ships, and flagging requirements, among others.Some notable and innovative aspects of this law revision include:

  • Navigation Patents will be granted through a direct process without requiring a provisional patent.Expiry dates for regulatory navigation patents and regulatory radio licenses for vessels in international service are eliminated.The notification process is modified to accept special notifications via email instead of a public notice.Within the vessel owner change procedure, there’s a requirement for prior registration of the seller’s property title.Legal security for mortgage creditors of vessels registered in Panama is reinforced, as the cancellation of a vessel ex officio will not affect the validity of the previously registered mortgage at the Panama Maritime Authority’s Public Registry of Vessel Ownership.A new incentive regime is implemented to promote the growth of Panama’s merchant fleet.
  • Ramón Franco Mindreau, President of the Panamanian Maritime Law Association (Apademar), noted that revising the Merchant Marine Law was appropriate to ensure Panama maintains its leading position as a flag state. “We trust that this law will guarantee our success in having a unique and competitive registry,” he concluded.Critics of these modifications argue that “the registration of all documents in English has not been considered, which is not only necessary but essential regarding property titles and mortgages to compete internationally.

    Recognizing the significance of this process, the participation of various stakeholders in the maritime sector was pivotal. The following entities were involved in this task force: the Ministry of Foreign Affairs (MIRE), Panama Public Registry (RPP), National Aeronaval Service (SENAN), Authority of Aquatic Resources (ARAP), Panamanian Maritime Law Association (Apademar), National Bar Association (CNA), National Seafarers’ Association (Conagemar), Panamanian Association of Navy Officers (APOM), Panamanian Shipowners’ Association (ARPA), Recognized Organizations (IARO), Maritime Chamber of Panama, and to maintain dialogue transparency, the support of the Inter-American School of Social Dialogue and Tripartism at the University of Panama (EI-DiSTReC) was enlisted.

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