Panama’s shipping registry has denied failing to act on evidence that tankers operating under its flag had shipped Iranian crude oil in contravention of US sanctions.

The registry, the world’s largest with 16% of the global fleet, said that it had ejected 136 ships in the last four years because of direct links to the National Iranian Oil Co (NIOC).

NIOC has strong links with Iran’s Islamic Revolutionary Guard Corps, which is coordinating the country’s sanctions evasion campaign, according to the US Treasury.

A campaign group has complained that the Panama Maritime Authority (AMP) had snubbed its letters in which it raised the cases of dozens of ships it has tracked carrying Iranian crude.

United Against Nuclear Iran (UANI) said it had written nearly 50 letters related to some 140 vessels but only 18 had been deflagged.

UANI officials said they had provided evidence through satellite imagery, bills of lading and given details of the manipulation of AIS equipment The group said that at least four ships currently sanctioned by the US for Iran-related trades remain flagged by AMP.

AMP said it had withdrawn flags from a total of 678 ships since 2019 related to illegal fishing and financing of terrorism.

“This administration has fully complied at all times with the obligations and procedures as a flag state and we have always initiated the investigation of the facts as soon as we received the information of alleged violations,” according to a statement in newspaper El Digital Panama.

The issue has been brought into sharper focus by the candidacy of Panama’s Arsenio Dominguez to become the next leader of the International Maritime Organization.

AMP, which runs the registry, is sponsoring Dominguez to replace Kitack Lim, who steps down at the end of 2023 after serving two terms.. It is the first time the country has put a candidate forward for secretary general.

Jeb Bush, the former Florida governor and an advisory board member of UANI, wrote recently that Panama was “unworthy” of leading the IMO. UANI said nearly 40% of tankers carrying Iranian crude operate under the flag of Panama.

UANI identified a tanker in 2021 off the coast of Iran after weeks of uncertainty about its location. Photo: United Against Nuclear Iran

The IMO has responsibility for the safety and security of shipping and combating illicit maritime activities, he said.

“The Panamanian government is undeserving of the prestige that it would gain if its ambassador to the organisation, Arsenio Dominguez, were to become secretary general of the agency,” he wrote in an article for the Washington Post.

“Simply put: Panama is unworthy of the international community’s trust.”

Rafael Cigarruista, AMP’s general director of merchant marine, told UANI in 2021 that it adopted a policy of “zero tolerance” against illicit activity involving any of its flagged vessels, according to correspondence seen by TradeWinds.

He said that any vessels that deactivated or tampered with a ship’s tracking systems would be sanctioned.

Alonso Illueca, an international lawyer who has written about Panama’s deflagging policy, said that the country tends to comply with requests from foreign partners to remove ships from its registry.

No legal backing

“The problem is that in complying with it, Panama acts without proper legal backing,” he said.

He said the easiest way to do it would be to use local laws allowing a ship to be scrubbed from a registry for damaging Panama’s national interest.

“However, this does not appear to be view of Panama, which tends to offer no reasoning for such decisions, and whenever provided is an incorrect one,” he said.