Panama to fine ships $10,000 for turning off location systems

The US government has issued new guidelines to the shipping industry to avoid measures designed to stop sanction busting and smuggling

A satellite photograph shows the Iranian oil tanker 'Grace 1' off the coast of Syria. AP, File

Panama's Maritime Authority said it will impose sanctions on vessels, including fines of up to $10,000 (Dh36,750) and withdrawing its flag from the ship, if they deliberately deactivate, tamper or alter the operation of their tracking transponders.

The issue of ships disabling tracking equipment – designed for safety at sea and to prevent ships colliding – has come to the fore in recent months as a method employed by vessels seeking to avoid US sanctions for shipping Iranian oil.

"This General Directorate of Merchant Marine will impose sanctions to all those Panamanian flagged vessels that deliberately deactivate, tamper or alter the operation of Long Range Identification and Tracking System or the Automatic Identification System," it said in a statement.

The head of Panama's Merchant Marine, Rafael Cigarruista, told Reuters the decision to sanction ships that do not comply with the rules are part of commitments made by Panama to avoid sanctions from international organisations.

"We want our ships to not deliberately turn off their equipment," said Mr Cigarruista.

Panama has the largest shipping fleet in the world with some 8,000 vessels registered.

The Panama Maritime Authority said it is constantly monitoring its fleet and it will initiate an internal investigation if it detects a vessel's transponder is down or not reporting.

That investigation "may culminate with sanctions that will be deemed appropriate [and] in some cases where the vessel is found having this conduct on regular bases could be de-flagged or deleted from the registry."

The Trump administration on May 14 Thursday issued guidelines to help ship owners and insurers avoid the risks of sanctions penalties, standards that were modified following months of discussions with industry.

The guidelines, known as a Global Maritime Advisory, concern sanctions on Iran, North Korea and Syria. The State Department said it is committed to disrupting sanctions evasion and smuggling of goods, including oil exports from Iran, which the Trump administration imposed sanctions soon after pulling out of the Iran nuclear deal in 2018.

The maritime advisory was first outlined on March 9 by David Peyman, a State Department deputy assistant secretary. He said then the advisory would, among other things, warn shippers not to turn off transponders and to not store Iranian oil.

Ships have been tracked sailing close to Iranian waters, turning off their transponders and then entering to load up on oil before leaving again and turning on their locators. Another method employed is using ship-to-ship transfers with transponders turned off.

However, even with tracking equipment turned off, ships can still be located using satellite imaging and other tools.

Last year, Panama withdrew its flag from at least 60 vessels linked to Iran and Syria due to US sanctions measures. Most of those vessels were owned by Iranian state-run companies but they also included ships linked to oil deliveries to Syria, sources told Reuters.