US urges Panama to block Iranian ships from using its flag

During his visit to Panama, US Special Envoy for Iran, Abram Paley, urged the country's officials to prohibit the use of their flag by Iranian ships. This practice, according to reports from AFP and the Times of Israel, enables Tehran to bypass US sanctions.

Panama is renowned for offering "flags of convenience," a service that allows shipping companies to register vessels in nations with which they have no substantive connections for a fee. As it stands, over 8,500 ships are registered under the Panamanian flag, making up about 16 percent of the world's total maritime fleet.

On February 27, the US Department of the Treasury imposed sanctions on a tanker flying the Panamanian flag for transporting cargo from Iran to China on behalf of the Iranian Ministry of Defense. Additionally, two business entities based in Hong Kong and the Marshall Islands faced similar restrictions.

Washington accuses these operations of being a significant revenue stream for the Iranian Ministry of Defense, facilitating Tehran's funding of various operations. These include drone deliveries to Russia and support for Middle Eastern armed groups aligned with Iran, such as Palestinian Hamas, Lebanese Hezbollah, and the Yemeni Houthi movement.