Senators Call on Panama to De-Flag Sanction-Busting Tankers for Iranian Oil

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A group of U.S. senators sent a letter last week to the Panama Maritime Authority calling for investigations and de-flagging of tankers that are violating U.S. sanctions on the Iranian oil trade. The letter contends that a significant number of ships registered in Panama are involved in the sanction evasion efforts and as a strong ally of the U.S. and as a trade and security partner, they write it is crucial for Panama to act.

Citing data from the non-profit watchdog group United Against Nuclear Iran (UANI), the letter contends that 383 vessels have been identified as suspected of operating in the ghost fleet supporting Iran’s oil trade. UANI highlights that this is up from just 70 tankers in November 2020. Of the nearly 400 vessels they believe are aiding Iran, the letter reports that nearly half (189) are flagged in Panama. So far, the senators write Panama has de-flagged 28 of 217 vessels they believe are of concern while noting that some vessels recently de-flagged were because of decommissioning and not due to concerns over their movements and sanctions compliance.

The campaign is being led by Senators Robert Casey, Jr. of Pennsylvania and Marco Rubio of Florida, along with 20 colleagues. The senators are contending that Panama has been lax in its enforcement of sanctions. UANI raised a similar concern in its public statements. Last week, the United States blacklisted four tankers for being involved in the trade supporting Iran and the Houthis, and three of those vessels are registered in Panama.

While the Panama flag has the highest number of vessels identified by the group for suspicious activity, Panama also has the largest ship registry with 8,540 vessels as of the end of 2023. The vessels being cited are just over two percent of the Panama flag. 

“In comparison, other registries have been much more diligent about de-flagging vessels identified as part of Iran’s ghost fleet, and no other nation flags more than five percent of vessels suspected to be a part of the ghost fleet,” the senators’ letter states. “We are concerned that the Panama Maritime Authority is not exercising the due diligence necessary to address these vessels.”

The letter cites well-documented tactics used by the ghost fleet to conceal the Iranian oil trade which the letter contends is roughly a quarter of Iran’s revenue. They highlight ship-to-ship oil transfers, turning off AIS signals, repainting vessels mid-voyage, using false documents including misidentifying cargo, and flag hopping between registries. 

The current administration in Panama has highlighted its efforts at cleaning the registry contending that the prior administration had lax enforcement of the rules. The Panama Maritime Authority reported in July 2023 that it has canceled more than 6.5 million gross tons of shipping since July 2021, for issues related to Iran, North Korea, or vessels included in the list of international sanctions. Last year, the administration highlights that it canceled the registry of 161 vessels representing nearly 1.3 million gross tons.

The senators, however, express additional concerns, writing, “We further worry that practices used to evade U.S. sanctions on Iranian oil might likewise be used to evade U.S. sanctions on Russian oil, aiding that nation’s abhorrent atrocities in Ukraine and elsewhere.”

They call on the AMP to conduct investigations into the ships which are listed in an appendix to the letter and to follow its established procedures to de-flag ships.

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