U.S. urges Panama to remove flag from rogue Iranian ship

The U.S. envoy on Wednesday urged Panama to prevent Iranian ships from flying its flag, allowing Tehran to evade sanctions imposed by Washington.

The small Central American country is a world leader in offering flags of convenience, which allow shipping companies to register their ships in countries with which it has no ties – for a fee and without regulation.

“Iran and Iran-linked actors are trying to evade Panamanian sanctions. They are trying to abuse Panamanian flag registration,” said Abram Paley, the U.S. deputy special envoy for Iran.

Pelley is visiting the country “to ensure that Panama’s shipping registry and jurisdiction are not abused by entities seeking to evade our sanctions on Iran.”

According to the Panama Maritime Authority, the country has 8,540 registered ships, accounting for 16% of the global fleet.

Washington suspects Iran is using some of them to transport oil or its derivatives in order to circumvent sanctions.

Iran has been under tough U.S. sanctions since Washington withdrew from a landmark nuclear deal in 2018.

Pelley said at least six Panamanian-flagged ships had violated those sanctions since January.

The U.S. government accuses Iran of using revenue from oil sales to fund Yemen’s Houthi rebels and other groups such as Hezbollah and Hamas.

Experts say rogue shipowners use flags of convenience to get around environmental regulations and labor laws or even completely conceal who owns a particular vessel.

“We hope that the Panamanian government will continue to cooperate with us in accordance with its domestic laws and international obligations,” Pelley said.