Shipping Gazette May 09

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Shipping Gazette

Latest maritime and legal news from Panama and around the world

Panama, May, 2009 Volume 1, Number 01

In this issue:

  1. IMO Voluntary Audit : Panama registry sails through with flying colours
  2. A quick review of the new General Mercant Marime Law of Panama
  3. Panama Marine Circulars Update
  4. What to do if your Panamanian ship becomes involved in an accident
  5. LRIT & Panama
  6. IMO Update – Status of the International l Conventions to be enforced during 2009


Welcome to the very first issue of the Shipping Gazette, a monthly publication brought to you by the Maritime Department.

We are delighted to launch this publication which will help to keep you abreast of developments within the Panama maritime industry locally as well as those affecting the Panamanian registry.

The Shipping Gazette has been conceived to highlight many of the items that you as a shipowner, maritime lawyer, seafarer, shipping consultant, financier, insurer, surveyor or shipping professional among other activities, need to know about. We will also occasionally profile individuals, projects and opportunities from our national shipping scene. We welcome your comments and story ideas. If you would like to write to us or ask us about some particular subject touching on the registry or legislation, please feel free to do so.
So welcome once again to Shipping Gazette; we aim to publish four editions a year filled with news and articles to help you in your business and moreover, in your relationship with us as Panamanian lawyers and as a bridge between your ship/concerns and the Panamanian Registry.

Please feel free to share this newsletter with colleagues or anyone you believe would be interested in receiving it.

1. IMO Voluntary Audit : Panama registry sails through with flying colours

Substantial work on modernizing the Panama registry in recent years has enabled it to pass comfortably the International Maritime Organization’s voluntary flag state audit.

A preliminary report of four IMO auditors in December 2008 gave its blessing to practices at the Panama City office and recognised the priority given to safety issues. Given Panama’s key role in shipping, with more than 8,000 vessels on the books, the finding is of considerable significance to the industry as a whole.

A month earlier, Lloyd’s Register had indicated that Panama was on the way to its goals by accepting it into the Quality Assurance System ISO-9001-2000.

2. The new General Merchant Marine Law of Panama

During the first quarter of 2008, the Panama Maritime Authority or Autoridad Maritima de Panama (AMP, after its initials in Spanish) brought before the National Assembly of the Republic of Panama, proposals for reforms in four crucial maritime aspects, including: changes in Book Two of Panama’s Commercial Code of 1916, a general law of ports pertinent to the operation of ports and maritime facilities currently existing and to be built including relevant concessions, a new procedural law, and reforms to the merchant marine legislation.

The Assembly approved three of the four petitioned modifications, being the Maritime Commercial Law (Law 55 of 6th August, 2008), the General Law of Ports (Law 56 of 6th August, 2008) and the General Merchant Marine Law (Law 57 of 6th August, 2008).

These laws are the product of two years of work and efforts of members of the AMP, the Panama Maritime Lawyers Association, the Maritime Chamber of Panama and the National Bar Association. We are proud to say that three partners of our firm were part of the drafting of the laws. Maria de Lourdes Marengo, Maria Teresa Diaz and Belisario J. Porras contributed in the drafting, and achieving the completion of the new and modern laws.

In this issue we would like to draw your attention to the new General Merchant Marine Law which entered into force last February 6th, 2009.

Law 57 of 2008 is designed as a frame law and characterized by its flexibility. These qualities will allow the Panamanian shipping administration to quickly adopt and implement the necessary measures in accordance with the demands of the rapid changes in the international maritime industry.

This new law strengths the juridical security that has been the essence of the Panamanian Registry and responsible for the fact that Panama remains the first flag of choice.

The safety and security of Panamanian registered vessels are aspects that are emphasized by this new law which aims for the vessels to fully comply with national and international laws. The security inspections to be made by the Register are emphasized by Law 57 which points out that Panama registered vessels will be subject at least to an annual inspection and, on the discretion of the Directorate General of Merchant Marine, will remain subject as well to extraordinary inspections and\or reinspections. In fact, since last year, Panama has ordered so-called occasional inspections on vessels of more than 20 years of construction navigating within the MOU Paris as requisite for enrolment and, thereafter, at six month intervals when the Directorate deems it necessary.

This law reveals the desire and commitment of the AMP to elevate and maintain the standard of the Panamanian merchant marine.

The law offers incentives for the registration of newbuildings and of recently constructed vessels, the registration of vessels by shipowners already clients of the Panamanian Register and for the registration of fleets of three or more vessels by means of providing substantial discounts on the applicable registration fees and annual taxes, in some instances, for up to three year periods of registration.

In response to a petition of the cruise industry with Panama registered cruise-liners, Law 57 of 2008 introduces the conditions and procedure under which marriages can be officiated onboard Panama-flag cruise ships by the Master of the vessel under the authority of the laws of the Republic of Panama.

In addition, an International Advisory Board is governed by this new law. This board will comprise recognized members of the international maritime industry from maritime transportation, maritime communications, shipowners, shipbuilders, P & I clubs, maritime lawyers, banks, classification societies, recognized organizations, ship operators and seafarers.

“The new legislation will improve the age of the fleet and create mechanisms to aid the Panama Ship Register to quickly respond to [potential] accidents abroad,” says Alfonso Castillero, head of the AMP’s Directorate of Merchant Marine. “It is a very modern law that fosters competitiveness and sustains our worldwide leadership of the merchant fleet,” he adds.

3. Panama Marine Circulars Update

Recently the Panama Maritime Authority has issued 3 new circulars

N°. 196 STCW Required Training and Certification for Ship Security Officers (SSOs)
N°. 197 Long-Range Identification and Tracking of Ships (LRIT).
N°. 198 Renewal of the Bunkers Convention Certificate

Please visit to download the circulars and ensure your vessel and office keep them and follow their instructions and procedures relevant to your requirements.

4. What to do if your Panamanian ship becomes involved in an accident

During the 2008 annual conference of the International Union of Marine Insurance (IUMI) in Vancouver it was revealed that the number of serious shipping incidents has shown a steady upward climb since 2006 when 600 were reported.

During 2007, there were over 1,000 incidents in the categories of total losses and serious casualties to merchant ships.

The 2008 figures are expected to be published later this year.

Total losses in 2007, by number, represented 0.2% of the world fleet of vessels of over 500 gt, and, by tonnage, approximately 0.1%.

With those figures in mind we are very much aware of the potential risks ships face at sea. We can offer to our clients the advice and experience of the offices in our global network to ensure that your ship complies with Panamanian legislation, and our team will work with your designated team and with the Flag State.

Our aim is to protect our clients’ interests by reacting quickly to incidents and dealing with the multitude of issues which can arise by being the liaison between the clients and the Administration.

In the event your ship becomes involved in an incident, accident or casualty regardless of whether it is minor or major, we strongly advise contacting our offices immediately, to obtain the assistance and representation needed.

As a shipowner or agent, and in order to follow the required procedure, the first step is to inform the Panama Maritime Authority; we can assist you in contacting the Administration and obtaining immediate response and support for your vessel.

The Casualty Department needs to have in writing all the information; therefore the master will be requested to fill a special form explaining all the incidents/accidents, including all the ship’s details and identification as explained below.

Clients must bear in mind that, depending on the nature of the incident/accident, a casualty investigator may be sent to the ship. It can prove crucial to dispatch an investigator immediately. Therefore, we strongly recommend you contact our office to receive support and advice. We will immediately liaise with the authorities on your behalf as the ship’s resident agent, and ensure that you are complying with the current legislation.

When contacting us, please ensure that you have copies of the registration documents (Patent & Radio Licence) and the following information:

1. IMO Number:
2. Name of Ship:
3. Flag State: PANAMA
4. Type of Ship:
5. Gross Tonnage:
6. Length overall:
7. Classification Society:
8. Registered Shipowner:
9. IMO Company Number
10. Ship Manager/Operator:
11. IMO Company Number:
12. Previous names:
13. Previous Flag:
14. Previous Class Society:
15. Date of contract/keel laid/delivery:
16. Date of major conversion:
17. Deadweight:
18. Hull material:
19. Hull construction (single/double/double bottom/double sides/ etc)
20. Building yard:
21. Hull number:
22. Date of total loss/constructive total loss/scrapping
23. Number of crew:
24. Number of passengers:

Additional to the above information, there will be a long list of questions about the incident/accident/casualty on board, answers to which need to be submitted to the Administration on their special form.

The submission of the facts and details of the incident/accident/casualty has to be done immediately for the Flag State to assess the situation and proceed according to its internal procedure as well as the International Code stipulation.

Please note that in the event that the flag is not notified, there could be fines imposed on the ship, and furthermore, any administrative procedures of the ship within the flag will be blocked until the situation is clarified.

5. LRIT Developments ( SOLAS – IMO – Paris MOU – Panama)


The provisions of SOLAS regulation V/19-1 of the International Convention for the Safety of Life at Sea, 1974, as amended, regarding the Long-range identification and tracking (LRIT) of ships, establishes that from 31 December 2008, vessels shall transmit and contracting governments shall be able to receive, pursuant to the provisions of the SOLAS regulation V/19-1, LRIT information transmitted by vessels.


The Maritime Safety Committee of the IMO at its 85th Session from 26 November to 5 December 2008 reviewed the progress made in relation to the implementation of LRIT and noted that the work was still in progress. As a result the Committee adopted transitional arrangements for the establishment of the LRIT system, which will apply during the period between 31 December 2008 and 30 June 2009

LRIT & Paris MOU

Taking into consideration the above, the Paris MOU Advisory Board agreed that port state control officers should refrain from carrying out inspections on LRIT equipment during this period.

The Paris MOU will avail of this transitional period to develop instructions for carrying out such inspections and develop the associated deficiency codes for use from 1 July 2009.

For more information on the Paris MOU on Port State Control please visit their website

LRIT Conformance Testing and Panama flagged vessels

The Panama Maritime Authority has decided that as from 1st January 2009 operators of Panama flagged vessels which do not yet comply with the LRIT regulation will be obliged to perform conformance tests only with Absolute Maritime Tracking Services Inc of Panama.

Conformance tests, completed before 1st January 2009 and subsequently all certificates issued by all ASP companies approved by Panama and dated before 1st January 2009 will remain valid and be accepted by the Panama Maritime Authority.

If your vessel has not complied with the LRIT test required you can contact our offices in Panama for assistance, or contact the ASP direct.

6. IMO Update – Status on the International Conventions to be enforce during 2009/2010

Date of
entry into
Convention or Code
1 Nov. 2008

Entry into force Bunkers Convention

The last significant gap in the international regime for compensating victims of oil spills from ships is set to be closed, with the entry into force on 21 November 2008 of The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, an international treaty covering liability and compensation for pollution damage caused by spills of oil, when carried as fuel in ships’ bunkers. Current regimes covering oil spills do not include bunker oil spills from vessels other than tankers.

Ships over 1,000 gross tonnage registered in a State Party to the Convention are now required to carry on board a certificate certifying that the ship has insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime. In all cases, this amount should not exceed an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.

The Convention makes the shipowner, defined broadly so as to include the owner, registered owner, bareboat charterer, manager and operator of a ship, liable to pay compensation for pollution damage (including the costs of preventative measures) caused in the territory, including the territorial sea of a State Party, as well as in its exclusive economic zone, or if a State Party has not established one, in an equivalent area.

1 Dec.2008

July 2007 amendments to MARPOL

An amendment to MARPOL Annex I (Regulations for the prevention of pollution by oil from ships) included in regulation 38.2.5, on Reception facilities outside Special Areas, mention of the obligation to provide facilities in respect of oily mixtures from cargo areas of oil tankers, by referencing regulation 34 on discharge requirements from those cargo areas.

An amendment to MARPOL Annex IV (Regulations for the prevention of pollution by sewage from ships) included in regulation 11.1.1, on the requirements for discharge of sewage into the sea, the phrase “or sewage originating from spaces containing living animals”. The amendment makes clear that animal effluent shall be discharged into the sea, not instantaneously, but at a moderate rate, as is currently the requirement for the discharge of untreated sewage from holding tanks.

Code of Safety for Special Purpose ships adopted

The MSC adopted a revised and updated Code of Safety for Special Purpose Ships (SPS Code), such as sail training ships, cable laying ships and research vessels. The original SPS Code was adopted in 1983. The 2008 version provides an international standard of safety for new special purpose ships that will result in a level of safety for the ships and their personnel equivalent to that required by SOLAS.

1 Jan. 2009

May 2005 amendments to SOLAS

A revised SOLAS chapter II-1 harmonizes the provisions on subdivision and damage stability for passenger and cargo ships. The revised provisions in parts A, B and B-1 are applicable to new ships built after 1 January 2009.

The amendments, which have been intensively developed over the past decade, are based on the “probabilistic” method of determining damage stability, which is itself based on the detailed study of data collected by IMO relating to collisions. Because it is based on statistical evidence concerning what actually happens when ships collide, the probabilistic concept is believed to be far more realistic than the previouslyused “deterministic” method.

The revision has taken into account the results of the HARDER (Harmonisation of Rules and Design Rational) research project: a project undertaken by a consortium of European industrial, research and academic institutions to study the probabilistic approach for assessing a ship’s damage stability and to develop new criteria and indexes for subdivision based on probability of survival, taking into account effects from waves, heeling moments, cargo shift, transient effects and equalization arrangements.

Also, new SOLAS regulations XI-1/3-1 and amendments to regulation XI-1/5 on the mandatory company and registered owner identification number.

And amendments to add the IMO unique company and registered identification number to relevant certificates and documents in the International Management Code for the Safe Operation of Ships and for Pollution Prevention (the ISM Code) and International ship and Port Facility Security (ISPS) Code.

December 2006 amendments

Amendments to the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code), relating to fire protection and fire extinction, and the revised chapters 17 (Summary of minimum requirements), 18 (List of products to which the code does not apply) and 19 (Index of Products Carried in Bulk).

Company and registered owner identification number

In May 2005, IMO adopted a new SOLAS regulation XI-1/3-1 Company and registered owner identification number and amendments to regulation XI-1/5 on the mandatory company and registered owner identification number.

Amendments to the International Maritime Dangerous Goods Code

The MSC adopted Amendment 34-08 to the International Maritime Dangerous Goods (IMDG) Code. The amendment includes changes to provisions for certain substances, including changes to requirements for documentation for dangerous goods in limited quantities. The amendments are expected to enter into force on 1 January 2010, but may be applied in whole or in part voluntarily from 1 January 2009.

1 July 2009

October 2007 amendments to SOLAS

  • Amendment to SOLAS chapter IV, to add a new regulation 4-1 on GMDSS satellite providers. The new regulation provides for the MSC to determine the criteria, procedures and arrangements for the evaluation, recognition, review and oversight of the provision of mobile satellite communication services in the Global Maritime Distress and Safety System (GMDSS). See also resolution A.1001(25) Criteria for the provision of mobile-satellite communication systems in the GMDSS adopted by the IMO Assembly at its 25th session in November 2007.
  • Amendment to SOLAS chapter VI, to add a new regulation 5-1 on material safety data sheets (MSDS), to require ships carrying MARPOL Annex I cargoes (oil) and marine fuel oils to be provided with a material safety data sheet prior to loading such cargoes. The regulation refers to the Recommendation for material safety data sheets (MSDS) for MARPOL Annex I cargoes and marine fuel oils, adopted by the Organization through resolution MSC.150(77).
  • Amendment to the International Code for the Safe Carriage of Packaged Irradiated Nuclear Fuel, Plutonium and High-Level Radioactive Wastes on Board Ships (INF Code), specifically, to Chapter 2, on Damage Stability, to bring it into line with updates to SOLAS.
  • Amendments to forms contained in the appendix to the Annex to the 1988 SOLAS Protocol to add a section to cover alternative design and arrangements (Passenger Ship Safety Certificate, Cargo Ship Safety Certificate, Cargo Ship Safety Construction Certificate and Cargo Ship Safety Equipment Certificate). Also, similar amendments to the forms for the Nuclear Passenger Safety Certificate and the Nuclear Cargo Ship Safety Certificate contained in the appendix to the Annex to the 1974 SOLAS Convention.
1 Jan. 2010

October 2006 amendments to MARPOL – revised Annex III

The revised MARPOL Annex III Regulations for the prevention of pollution by harmful substances carried by sea in packaged form. The Annex has been revised to harmonize the regulations with the criteria for defining marine pollutants which have been adopted by the UN Transport of Dangerous Goods (TDG) Sub-Committee, based on the United Nations Globally Harmonized System of Classification and Labelling of Chemicals (GHS).

The Maritime Safety Committee, at its eighty-fourth session (7 to 16 May 2008), adopted the Casualty Investigation Code by resolution MSC.255(84) and a new regulation 6 in chapter XI-1 of the SOLAS Convention by resolution MSC.257(84) to make the Code mandatory. The Committee agreed that the Casualty Investigation Code should take effect on 1 January 2010, noting that the effective date should be the same as the date of entry into force of the new SOLAS regulation XI-1/6.

1 July 2010 May 2006 amendments to SOLAS

Amendments to SOLAS Chapter II-2 – Fire protection

These include amendments relating to Regulation 9 – Containment of fire, so as to include a requirement for water-mist nozzles which should be tested and approved in accordance with the guidelines approved by the Organization; and in Regulation 15 – Arrangements for oil fuel, lubricating oil and other flammable oils, new text relating to the application of the regulation to ships constructed on or after 1 February 1992 and on or after 1 July 1998.

Amendments to SOLAS Chapter III – Life-saving appliances and arrangements

In Regulation 7 – Personal life-saving appliances, the amendments add a new requirement for infant life-jackets. For passenger ships on voyages of less than 24 hours, a number of infant life-jackets equal to at least 2.5% of the number of passengers on board is to be provided; and for passenger ships on voyages of 24 hours or greater, infant life-jackets are to be provided for each infant on board. A further amendment relates to the provision of life-jackets for larger passengers and states that, if the adult life-jackets provided are not designed to fit persons with a chest girth of up to 1,750 mm, a sufficient number of suitable accessories are to be available on board to allow them to be secured to such persons.

Amendments to SOLAS Chapter IV – Radiocommunications

The amendments relate to the provision of radio equipment, in Regulation 7, to require ships to carry an EPIRB capable of transmitting a distress alert through the polar orbiting satellite service (COSPAS-SARSAT) operating in the 406 MHz band; and, in Regulations 9 and 10, to clarify that the means of initiating ship-to-shore distress alerts may be through the Inmarsat geostationary satellite service by a ship earth station.

Amendments to SOLAS Chapter V – Safety of navigation

The amendment adds a new paragraph to Regulation 22 – Navigation bridge visibility to allow ballast water exchange at sea, provided that the master has determined that it is safe to do so and takes into consideration any increased blind sectors or reduced horizontal fields of vision resulting from the operation to ensure that a proper lookout is maintained at all times. The operation should be conducted in accordance with the ship’s ballast water management plan, taking into account the recommendations on ballast water exchange. The commencement and termination of the operation should be recorded in the ship’s record of navigational activities.

Amendments to the International Code for Fire Safety Systems (FSS Code)

The amendments replace the text of Chapter 5 Fixed gas fire-extinguishing systems with a revised text.

Amendments to the International Life-Saving Appliance Code (LSA Code)

The amendments include the requirement that all life saving appliances should withstand in stowage an air temperature range of 30°C to +65°C and personal life-saving appliances should remain operational throughout an air temperature range of -15°C to +40°C. The colour of life-saving appliances is now specified to be “of international or vivid reddish orange, or a comparably highly visible colour on all parts where this will assist detection at sea”. The existing section 2.2 on General requirements for life-jackets is revised and replaced. Further amendments relate to specifications for immersion suits and anti-exposure suits.

Amendments to Guidelines for the authorization of organizations acting on behalf of the Administration (Resolution A.739(18))

The amendments to the guidelines, which are mandatory under SOLAS chapter XI-1, add a new paragraph 2- 1 to require the use of only exclusive surveyors and auditors for surveys and certification, although radio surveys may be subcontracted to non-exclusive surveyors.

December 2006 amendments to SOLAS Revised passenger ship safety standards

The package of amendments to SOLAS were the result of a comprehensive review of passenger ship safety initiated in 2000 with the aim of assessing whether the current regulations were adequate, in particular for the large passenger ships now being built.

The work in developing the new and amended regulations has based its guiding philosophy on the dual premise that the regulatory framework should place more emphasis on the prevention of a casualty from occurring in the first place and that future passenger ships should be designed for improved survivability so that, in the event of a casualty, persons can stay safely on board as the ship proceeds to port.

The amendments include new concepts such as the incorporation of criteria for the casualty threshold (the amount of damage a ship is able to withstand, according to the design basis, and still safely return to port) into SOLAS chapters II-1 and II-2. The amendments also provide regulatory flexibility so that ship designers can meet any safety challenges the future may bring. The amendments include:

  • alternative designs and arrangements;
  • safe areas and the essential systems to be maintained while a ship proceeds to port after a casualty, which will require redundancy of propulsion and other essential systems;
  • on-board safety centres, from where safety systems can be controlled, operated and monitored;
  • fixed fire detection and alarm systems, including requirements for fire detectors and manually operated call points to be capable of being remotely and individually identified;
  • fire prevention, including amendments aimed at enhancing the fire safety of atriums, the means of escape in case of fire and ventilation systems; and
  • time for orderly evacuation and abandonment, including requirements for the essential systems that must remain operational in case any one main vertical zone is unserviceable due to fire.

The amendments are expected to enter into force on 1 July 2010.

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