Centenary cheer

As Panama gears up to celebrate 100 years of independence, Enrique de Alba, senior partner at Morgan & Morgan, charts the development of the Panama ship register

ON November 3 this year, Panama will celebrate its 100-year anniversary as an independent nation. Being one of the signatory countries of the United Nations Charter in 1945, which gave birth to the United Nations, Panama’s commitment to the international community has been proven over the years.

In 1925, for example, Panama enacted Law No 8, formally creating the International Merchant Marine of the Republic of Panama which enabled shipowners of all nationalities to make use of this service for international trade and ship registration. Subsequently, several other countries explored similar possibilities.

Panama has continually demonstrated its commitment to its international registry. Since the creation of the registry, many laws have been drafted to comply with international safety conventions promoted by the International Maritime Organisation (IMO). The annual inspection programme has proven to be a key element in maintaining the safety standards of the international registry.

A General Directorate of Merchant Marine was also created to perform all administrative acts related to the supervision of vessels in the Panamanian Registry, thereby ensuring strict compliance with legal provisions and international conventions on safety at sea.

Another key element in the development of the registry has been the enactment of Law No 4 of February 24, 1983, when taxes and registration fees were created in order to provide the registration service at a very competitive level. Over the years, several laws have been approved to keep up with the changes and market demands, allowing discounts under strict but attractive measures.

The enactment of Law No 14 of May 27, 1980, whereby the preliminary registration system was created, allows transactions to take place during the working hours of the place where the physical funding takes place, together with the acceptance of ownership titles and mortgage registrations after normal working hours in Panama. This complemented the need of the banking community and shipowners to receive an uninterrupted service, 24 hours a day, 365 days a year.

The ship mortgage legal dispositions contained in Panama’s Commercial Code were fully updated through Law No 43 of November 8, 1984, and have been an useful tool for shipowners to receive the required finance to allow their shipping operations to develop.

Finally, in 1998, the Maritime Authority of Panama was created, co-ordinating all institutions and authorities linked to the maritime sector. Among its objectives are the administration, promotion and execution of policies connected to the development of the maritime sector and the co-ordination of such activities with the Authority of the Panama Canal. This Maritime Authority executes its obligations and responsibilities under the United Nations Convention on the Law of the Sea of 1982.

In 1998, the Panama Maritime Authority issued its policy to implement the ISM Code (International Safety Management Code), reminding shipowners and operators of the full implementation of the International Management Code for the Safe Operation of Ships and for Pollution Prevention. It became mandatory for certain ships - passenger vessels irrespective of gross tonnage, high-speed craft (cargo or passenger), bulk carriers above 500 gross tons and tankers above 500 gross tons - as from July 1, 1998, with the adoption of Chapter IX of SOLAS 1974. By July 1, 2002, the ISM Code became applicable to other cargo ships and mobile offshore drilling units of 500 gross tonnage and upward in compliance with IMO Resolution A 880(21).

These continuous efforts on the part of Panama as a pioneer of open registries, and also as a role model as far as efficiency, safety and reliability are concerned, has ensured that Panama has played a leading role among the international merchant marines of the world over the years. As of February 25, 2003, Panama is home to 10,158 registered vessels and 145,784,825 gross registered tons.

The new challenge facing Panama’s merchant marine, in the wake of September 11, 2001, is to be ready and prepared to comply with the International Ship and Port Facility Security Code (ISPS), due to be fully implemented by July 2004. Panama is confident that it will once again comply with this new requirement, allowing shipowners from all over the world to continue benefiting from the attractiveness of its registry.