PANAMA Law and Practice Contributed by: Nadya Price and Joaquín De Obarrio, Patton Moreno & Asvat
There are two governmental institutions within the PMA in charge of the registration of vessels: • the Directorate General of Merchant Marine (DIGE - MAR), which is in charge of all administrative mat - ters such as the enrolment of vessels and ensuring related safety and security matters; and • the Directorate General of Public Registry of Property of Vessels (the “Ships Registry”), which is in charge of recording all matters related to the legal status of vessels concerning ownership and encumbrances. 1.4 Requirements for Ownership of Vessels There are no citizenship requirements for registration of a vessel under the Panamanian register. Any per - son, natural or juridical, irrespective of nationality, may enrol a vessel under the Panamanian flag. Panamanian laws allow the registration of a vessel while under construction. To that end, a certificate issued by the ship-yard, describing the vessel being built, the name of the company for which the vessel is being constructed and a declaration of the intention to transfer ownership thereof, will serve as title of owner - ship to be registered at the Ships Registry. 1.5 Temporary Registration of Vessels The General Merchant Marine Law of Panama allows temporary registrations, as follows. Special Registration for Temporary Navigation This registration allows the enrolment of a vessel for a period of up to three months for ultimate scrapping, for a delivery voyage or for any other kind of tempo - rary navigational purpose. The interested party needs to pay a single charge of 40% of the net tonnage of the vessel plus USD150. The vessel will be deleted by operation of law at the end of the three-month period at no cost, but the inter - ested party may, at any moment, request that deletion by way of filing a petition thereof and effecting pay - ment of the regular governmental deletion fees. The registration of title of ownership or mortgages is optional for this type of registration. Nevertheless, if a mortgage is to be recorded, the registration of title
must contain acknowledgement by the mortgagee that the registration of the vessel will elapse at the end of the three-month registration period. Lay-Up Registration This registration is valid for one renewable year and allows the registration of vessels under lay-up status, subject to certification issued by a recognised organi - sation (RO) or the applicable port authority where the vessel is located. An advantage of this type of registration is that no enrolment fees apply to vessels enrolled in Panama under this registration for the first time, and they will be exempted from paying part of the applicable regu - lar annual tonnage taxes and fees. In addition, they will be exempt from needing to have technical, safety and security certificates on board, but the respective RO should make the pertinent annotations concerning the lay-up status in the subject certificates. Once re-activated, an inspection must be carried out by an RO to ascertain that the vessel is duly fitted in accordance with all national and international mari - time laws and regulations, as a requirement for revert - ing to a regular international service registration. In addition, Panamanian law allows dual bareboat- charter registrations. A ship with primary registration on a foreign registry is permitted to be registered under the laws of Panama as secondary registry, pursuant to bareboat charterparty arrangements. The inverse situation is also permitted by Panamanian law. The system under Panamanian law results in dispers - ing of the features or attributes of registration. The laws of the primary registry govern the juridical status of a vessel in terms of the concept of ownership and encumbrances, while the laws of the special subordi - nated registry govern matters regarding the adminis - trative and technical operation of a vessel – ie, man - ning, labour relations, safety and security matters. A vessel registered in Panama under a bareboat-char - ter agreement will have a registration valid for a period of up to the validity of the bareboat-charter agree - ment; this period may be renewed as per renewals of the subject charter agreement.
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