Panama bans old vessels from registry as it cancels 17 ships hit by US sanctions
Panama has barred ships over 15 years old from joining its registry while announcing immediate action to cancel registration of 17 vessels sanctioned by the US Treasury, implementing dual restrictions aimed at the ‘ghost fleet’ of aging tankers used by Russia to export oil in violation of sanctions.
The Panama Maritime Authority said Monday it began the process of cancelling registration of the 17 vessels, after the Office of Foreign Assets Control targeted the ships along with a Panamanian company and citizen.
Panama’s crackdown comes amid pressure by the United States and calls by the International Maritime Organisation for flag states to strengthen vessel oversight, with growing action to prevent sanctions evasion through maritime activities.
The maritime authority said it ‘has proactively strengthened its oversight mechanisms to prevent the inclusion of undesirable actors under the Panamanian flag’. Every vessel applying to the registry, as well as owners, operators, and charterers, must undergo a thorough due diligence process, it said.
In a notice Friday that did not name Russia, the Panamanian Ship Registry said it would no longer register oil tankers and bulk carriers older than 15 years. It said it has updated policies to minimise the risk of detentions, and prevent the entry of ‘ghost fleet’ vessels into its registry.
The policy change follows data analysis showing that 71% of fleet detentions between 2023 and the first half of 2025 involved bulk carriers, general cargo vessels, and oil tankers older than 15 years, according to the General Directorate of the Merchant Marine.
Panama’s move is widely seen as a response to the ‘shadow fleet’ of older vessels used to circumvent Western sanctions on Russian oil, which must be sold under a price cap.
The original price cap on Russian crude was $60 per barrel, a measure set in 2022 by the G7 coalition to limit Russia’s oil revenue. Last month, the European Union, with support from the UK, lowered the cap to $47.60, a dynamic figure calculated to remain 15% below the average market rates for Urals crude. The new cap will take effect in early September for the EU and UK.
In March, Panama warned it had removed 107 vessels from its registry due to their presence on US, UK, and EU watchlists for suspected sanctions violations, reflecting growing pressure on flag states to prevent sanctions evasion through deceptive reflagging and ownership concealment.
Other major registries are taking similar action. In July, the Bahamas Maritime Authority issued a sweeping advisory warning shipowners that Bahamian-flagged vessels linked to Russian trade, ownership, or financing may face immediate deregistration if sanctioned by the US, EU, UK, or Bahamas itself.
The Panamanian registry also put in place additional oversight measures that became effective at the start of this year, including quarterly inspections by recognised organizations for deficient vessels and enhanced verification of ship safety management systems.
The registry emphasised it is ‘prioritising quality over quantity and implementing more rigorous oversight mechanisms’ to ensure compliance with international regulations and contribute to a safer and more sustainable industry.
Panama’s flag registry covers about 8,000 vessels representing roughly 18% of the global fleet by tonnage, making it one of the world’s largest ship registries. The country’s move to exclude older tankers and bulk carriers could significantly impact Russia’s ability to find flag states for its sanctions-evading vessels.
The policy change comes as Western nations have intensified efforts to crack down on Russia’s shadow fleet, which has enabled Moscow to continue exporting oil despite sanctions. The EU, UK, and US have imposed sanctions on hundreds of vessels suspected of transporting Russian oil, while insurance companies have pulled coverage from ships linked to sanctions violations.
Ship registries face increasing pressure to verify the legitimacy of vessels seeking their flags as regulators scrutinise the role of flag states in enabling sanctions evasion.
