Panama reduces the boat registration fee to zero

Panama’s Maritime Administration (AMP) says it is trying to save its ship registration system despite strong allegations of negligence and other scandals at the administration.

The flag of Panama has lost strength in its growth compared to its closest competitors, which according to statistics will soon take its lead.

According to statistics from Clarkson’s Research Portal, Panama is growing at 1.6%, the Marshall Islands at 2.4%, and Liberia at 5.5%.

These concerns led the director of the merchant marine, Rafael Cigarruista, to admit in July 2022 that Panama was losing competitiveness and was therefore in danger of maintaining the “first record”.

Cigarruista then assured that it is necessary to change the strategy, which seems to be the next step of the AMP administration in order to maintain the leadership in the registration of ships, as it was published in the Official Gazette on November 23, 2022. Resolution no. 106-167 DGMM.

That is, all at the cost of sacrificing the income left by the register of ships.

In that resolution, which bears the signature of the director of the merchant marine of AMP, an additional exemption from the discounts provided for by Law no. 57 of August 6, 2008 based on Article 8, up to 100% for all those newly built ships that are registered in the Panama Merchant Navy, according to the following rights and rates: registration fee, consular annual fee, accident investigation fee, inspection fee , a rate of 0.03% for each net ton.

However, Panama’s offer is aimed at almost all international shippers, that is, about 30% of ships that already carry the Panamanian flag, which compromises the collections left by that maritime service.

The document states that ships that wanted to apply these discounts had to meet the parameters established by the Maritime Administration, in addition, these discounts would be valid for ships registered until December 31, 2022.

Although the public document is dated November 23, on the last page in the fifth point it is stated that “the decision will take effect on January 1, 2023. This media has seen the document which contains a request that the law firm apply these discounts to a list of at least 150 ships.

AMP annually registers at least 400 new ships under the Panamanian flag. But AMP has not reported what impact these casualties will have on the revenue that remains on the ship register.

For a lawyer specializing in maritime law, Francisco Carreira, the service that Panama provides must be maintained efficiently and quickly, which ship owners expect, and that the strategy of trying to get more registrations is wrong, since the issue of discounts is to become relaxation, because there are discounts that seem to is a bargain country
Carreira pointed out that the AMP is wrong, because although other countries give some discounts in terms of fleets, Panama has much more advantages with a mortgage registration system that is recognized worldwide and the use of dollars. Ship owners are used to paying large sums for taxes and registrations.

We fail when we do not have the conditions to engage Panamanian official ships on these ships, Carreira stressed.

Regarding this discount strategy of AMP, the former director of the merchant navy, Guillermo Márquez Amado, recalled that during his administration no discounts were given and that this did not prevent other measures from advancing to become the first merchant navy in the world.

Panama has 16% of the world’s maritime fleet at the end of December 2022 with 8,650 registered ships, equivalent to 245 million GRT.

8 years ago, Liberia was tied with the Marshall Islands. Both records were 70 million tons below Panama.

Today, Liberia is only 15 million below Panama and 32 million above the Marshall Islands.

Cigarruista told The Maritime Exclusive magazine that one of the disadvantages of Panama is that everything is under the jurisdiction of the government, even the matter of registration, so there is a limit to what can be done. For example, you can’t hire the best because you can’t pay them. Instead, the Liberian registry is completely independent of the government,” he explained.

Cigarruista also said in another medium that with these discount measures, he is betting on the continuity and sustainable growth of the register. “Not because restaurants or stores or brands are the most successful,” he said.