Panama Removes Over 650 Ships From Registry Amid Sanctions
Panama City, June 3
, 2025 — The Panama Maritime Authority (AMP) announced on Monday that it has removed more than 650 vessels from its ship registry since 2019, as part of an intensified effort to comply with international sanctions—particularly those led by the United States—and to bolster regulatory oversight of vessels flying the Panamanian flag. The move follows growing criticism that Panama has not done enough to curb the activities of so-called “dark fleet” tankers and other ships evading international law.
The latest figures indicate that a significant portion of these removals—214 vessels—have occurred in the past year alone, after Panama introduced faster mechanisms to help enforce international sanctions. With over 8,500 ships, Panama operates the world’s largest open registry, which allows foreign-owned ships to fly its flag, often for reasons related to cost, regulations, or operational flexibility.
These measures have come in response to mounting scrutiny from non-governmental organizations and foreign governments, especially the United States, over the registry’s role in facilitating illegal trade, particularly involving sanctioned Iranian oil.
Pressure Mounts Over Iranian Oil Shipments
Last week, the watchdog group United Against Nuclear Iran (UANI) sharply criticized Panama, accusing it of failing to adequately monitor and remove vessels involved in illicit oil transportation. The group claimed that nearly 20% of ships suspected of moving Iranian oil were registered under Panama’s flag, a figure that has alarmed both U.S. authorities and sanctions enforcement advocates.
“This is not just a failure of Panama’s registry. It’s a direct threat to global sanctions compliance and regional and U.S. security,” UANI said in a statement.
UANI has called on Panama to immediately revoke the registration of all tankers carrying Iranian oil. The group’s analysis suggests that the continued use of Panama’s flag by sanction-violating vessels enables Tehran to sidestep economic restrictions, including U.S.-led sanctions on Iranian crude exports.
Strengthening Enforcement
In response to these concerns, Panama’s Maritime Authority has taken several steps since 2019 to tighten its registry rules. That year, Panama signed a cooperative agreement with other major flag states—including Liberia and the Marshall Islands—to share information about ships whose registrations were canceled or denied due to suspected sanction violations. This coalition aims to curb “flag hopping,” where a vessel frequently changes its registry to avoid regulatory oversight.
One critical issue Panama is addressing is the deliberate disabling of ships’ transponders—known as Automatic Identification Systems (AIS)—to evade tracking. Vessels involved in sanctioned trade often turn off these systems while conducting ship-to-ship transfers of oil at sea, a practice common among the so-called “dark fleet.”
In May 2025, AMP announced it would enhance controls specifically for ship-to-ship (STS) operations involving Panama-flagged vessels. The statement came amid a rise in these clandestine transfers, which have become a central tactic for evading both sanctions and environmental standards.
Panama has also taken action against tankers that demonstrate suspicious behavior, including unreported changes in ownership, flag changes, or operational anomalies. Once a ship is removed from the registry, it can no longer legally sail under the Panamanian flag—a move that can significantly limit its operational freedom and insurance options.
U.S. Involvement and Regional Implications
The U.S. government, which has ramped up enforcement of sanctions under both the Biden and Trump administrations, has put increasing pressure on countries with large registries to support its sanctions policy. Former President Donald Trump, during his term, harshly criticized the expansion of the “dark fleet” and even threatened to take more direct control over the Panama Canal if the Central American nation failed to support U.S. enforcement actions.
In its recent press release, Panama stated that it is actively collaborating with the United States on improving transparency and compliance within its maritime registry. “Our goal is to maintain the integrity and reputation of our flag,” the AMP said, noting that the registry is undergoing a systemic overhaul to meet modern security and compliance standards.
The AMP emphasized that its efforts are not solely aimed at appeasing foreign governments but are part of a broader initiative to promote responsible shipping and global maritime security.
Global Impacts on Shipping
Panama’s actions could have far-reaching implications for the global shipping industry, especially as regulatory scrutiny intensifies across jurisdictions. The removal of over 650 vessels, including many tankers previously involved in gray-area trading, may constrain the operations of some shipping firms that rely on opaque practices to move cargo across borders.
However, analysts believe that Panama’s hardline stance may signal a shift toward a more transparent and enforceable maritime system. “The days of ‘flags of convenience’ offering a safe haven for sanctions evaders may be coming to an end,” said maritime analyst Diego Morales of the Global Maritime Institute. “This could mark a turning point in how international shipping aligns with geopolitical enforcement mechanisms.”
Looking Ahead
As Panama continues its efforts to modernize and clean up its registry, it faces the dual challenge of maintaining its status as the world’s largest flag state while ensuring compliance with international law. The AMP’s recent decisions suggest a willingness to sacrifice short-term registry size for long-term credibility.
For now, the world will be watching how Panama navigates this balancing act—particularly as tensions rise over Iran’s oil trade and enforcement bodies look to close the loopholes that have long allowed sanctioned trade to flourish at sea.
