UPDATE 1-Panama removes over 650 ships from registry amid sanctions, stricter rules

In May, the authority said it would reinforce controls for ship-to-ship operations by Panama-flagged vessels, following an increase in the use of "dark-fleet" tankers to skirt sanctions or evade environmental requirements. The U.S. has increased pressure on countries with large vessel registries to help enforce sanctions.

Panama's Maritime Authority has removed from its registry more than 650 vessels since 2019 as part of an effort to fulfill U.S. sanctions and enforce stricter rules for the ships it flags, it said on Monday. A total of 214 vessels have been withdrawn from Panama's registry, among the world's largest with more than 8,500 ships, since it began implementing measures last year allowing it to act faster to help enforce sanctions, the authority added.

Ships cannot sail under Panama's flag once they are removed from its registry. Panama responded to criticism by non-governmental organization United Against Nuclear Iran (UANI), which last week said Panama had not taken sufficient action against sanction violators and asked it to "immediately cease facilitating Iran's illicit oil trade" and withdraw its flag from all tankers carrying Iranian oil.

According to UANI, nearly one in five vessels suspected of transporting Iranian oil sails under Panama's flag. "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," it said.

Panama in 2019 signed an agreement with other flag countries including Liberia and Marshall Islands to exchange information about vessels whose registrations were canceled or rejected due to potential sanction violations. It also began implementing measures against ships that deliberately turn off their transponders to avoid tracking. In May, the authority said it would reinforce controls for ship-to-ship operations by Panama-flagged vessels, following an increase in the use of "dark-fleet" tankers to skirt sanctions or evade environmental requirements.

The U.S. has increased pressure on countries with large vessel registries to help enforce sanctions. U.S. President Donald Trump has criticized the expansion of a dark fleet of tankers moving sanctioned oil and threatened to take over the Panama Canal. The Central American nation is collaborating with the United States on its registry, the authority said in its press release.