A general introduction to maritime law and practice in Panama

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Shipping Industry Business Presentation

The Panama Canal (the canal) is considered one of the seven wonders of the modern world. Because of the canal, Panama sits at the crossroads of some of the most important shipping routes in the world. The canal has served the maritime industry since its inauguration in 1914 and, particularly since the Torrijos-Carter Treaties of 1977, has been a catalyst for the country’s development. In 1914, 1,000 ships passed through the Canal; it now manages up to 14,500 transits per year. The canal is managed by the Panama Canal Authority (PCA), a Panamanian government agency, which succeeded the Panama Canal Commission, a US government agency, in 2000.

Since the PCA took over the administration of the Canal, the waiting time to cross the Canal has decreased considerably and there are now fewer accidents per year. Channel revenues have grown exponentially. For the 2021 financial year, the Canal recorded 13,342 transits, totaling 516.7 million tonnes PC/UMS,2 representing an increase of 41.5 million tons of PC/UMS over the tonnage of the prior year and amounting to more than $2.9 billion in revenue. In 2007, after being approved by a national referendum, Panama embarked on a US$5.3 billion expansion project. The enlarged canal was officially opened on June 26, 2016. Its main feature is the addition of a much larger set of locks at the Atlantic and Pacific ends of the waterway, which more than doubled its carrying capacity. The size of the new locks is 1,400 feet long (a 25 percent increase) by 180 feet wide (a 51 percent increase), with a draft of 60 feet (a 26 percent increase ). Traditional Panamax vessels have a maximum deadweight tonnage (DWT) of 80,000, and Neopanamax vessels can reach 170,000 DWT. The largest container ships that could pass through the Canal before its expansion could carry up to 5,000 twenty-foot equivalent units (TEUs), while those now able to transit can carry up to 14,000 TEUs. The expansion project also included the deepening of Gatun Lake and the access channels on both sides of the canal, as well as the deepening, widening and straightening of the Gaillard cut. On August 11, 2020, the M/V SK Resolved became the 10,000th Neopanamax ship to transit the expanded channel. He supported the growth of the maritime sector of the Panamanian economy and generated record profits for the country.

The port system at both ends of the canal, especially the private container ports, is efficient and constantly growing. The vast majority of cargo that arrives in Panama is for transshipment purposes. There are currently five private container ports at the ends of the canal, with a railway linking four of them; indeed, they constitute an integrated logistic port system. In addition, new oil terminals have recently been built or are under construction at both ends of the Canal. In the western part of the country, there is an oil pipeline connecting the Atlantic and Pacific oceans, with port terminals capable of handling very large crude carriers. It has been in service since 1982 and new storage tanks have been built at both ends of the pipeline.

The maritime sector in Panama has grown considerably, fed by the canal. In 2021, the Panamanian Chamber of Navigation had more than 180 members, whereas 40 years ago it had less than 30. These include regional offices of shipping companies, shipping agents, shipping companies bunkering, shipyards, port operators, dredging companies, surveying companies, banks and insurance companies. According to the Panama Maritime Authority (PMA), Panama closed 2021 with 8,558 registered vessels, totaling more than 236 million gross tons.

General overview of the legislative framework

Panama has a unicameral National Assembly with 71 legislators elected every five years. The main maritime legislative texts are the organic law of the APC and the organic law of the PMA. The channel has a special chapter in the Panamanian Constitution, the purpose of which is to keep it as far away from local politics as possible. Panama has ratified most of the conventions of the International Maritime Organization (IMO). Their implementation and application are ensured by the PMA, whose directorates deal with the merchant navy, seafarers, ports and auxiliary industries. Substantive maritime law is contained in the Maritime Commerce Law (LMC), passed in 2008 by the National Assembly to replace Book II of the Commercial Code, enacted in 1917, which until then contained Panama’s substantive maritime law. . The Code of Maritime Procedure (CMP) regulates the two maritime courts operating in Panama and contains the procedural laws applicable to all maritime cases. The CMP has a section which incorporated the 1976 Limitation of Liability for Maritime Claims Convention (the 1976 LLMC Convention) into domestic law. The content of the Protocol amending the 1996 LLMC Convention (the 1996 LLMC Protocol) was not adopted.

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