Member Article

● New General Merchant Marine Law No.57 of 6 August 2008, effective as of 7 February 2009, has established new discount rules in order to:

▪ Reduce age of Panama flag fleet

▪ Improve safety standards

▪ Encourage preference for Panama flag

▪ Encourage transfer of fleets to Panama

 REDUCE AGE OF PANAMA FLAG FLEET WILL BE BASED ON NEW BUILT VESSELS

•    Less than 30,000 GT

▪ 50% discount on registration fees

            ▪ 30% discount on annual taxes for 3 years

            ▪ 50% discount on annual consular fee for 3 years

•    30,000 GT or more but less than 100,000 GT

            ▪ 50% discount on registration fees

            ▪ 40% discount on annual taxes for 3 years

            ▪ 50% discount on annual consular fee for 3 years

•    100,000 GT or more

            ▪ 50% discount on registration fees

            ▪ 50% discount on annual taxes for 3 years

            ▪ 50% discount on annual consular fee for 3 years

REDUCE AGE OF PANAMA FLAG FLEET WILL BE BASED ON VESSELS WITH LESS THAN 5 YEARS FROM KEEL LAY DATE

•     Less than 30,000 GT

            ▪ 30% discount on registration fees

            ▪ 15% discount on annual taxes and annual consular fee for 3 years

•     30,000 GT or more but less than 100,000 GT

           ▪ 50% discount on registration fees

            ▪ 20% discount on annual taxes and annual consular fee for 3 years

•     100,000 GT or more

            ▪ 50% discount on registration fees

            ▪ 25% discount on annual taxes and annual consular fee for 3 years

IMPROVE SAFETY STANDARDS

Vessel with no PSC detention in 24 months: 15% discount on annual tax and annual consular fee.

            ▪ For this evidence of no PSC detention must be obtained from PMA

            ▪ 24 months must count up to the day of application for discount

            ▪ The vessel may apply for this discount several times (once for every 24 months period without PSC

              detention)

ENCOURAGE PREFERENCE FOR PANAMA FLAG

Loyalty Discount

            ▪ If the vessel belongs to a group with 5 to 15 Panama flag vessels: 20% discount on registration  

              fees, annual tax and annual consular fee for 1 year

            ▪ If the vessel belongs to a group with 16 to 50 Panama flag vessels: 35% discount on registration

               fees, annual tax and annual consular fee for 1 year

            ▪ If the vessel belongs to a group with 51 or more Panama flag vessels: 60% discount on registration

               fees, annual tax and annual consular fee for 1 year

Loyalty Discount and Newly Built Vessel Discount

 A newly built vessel belonging to an economic group with 51 or more vessels under Panama flag can apply for:

         • Loyalty Discount for the first year (60% discount on registration fees, annual taxes and annual

  consular tax); and,

         • Newly Built Vessel Discount for the second and third years (discount on annual tax and annual

           consular fee depending on the newly built vessel’s GT).

MODU returning to Panama by 7 February 2011

            ▪ Single $2,500 registration fee

            ▪ No annual taxes or fees for 2 years, except for annual inspection fee

ENCOURAGE TRANSFER OF FLEETS TO PANAMA

Fleet Discount

3 or more vessels belonging to a same economic group will be able to obtain substantial discounts up to 60% for 1 year if all vessels within the group are registered within 12 months.

Fleet Discount and Newly Built Vessel Discount

3 or more newly built vessels with a total GT of 100,000 or more ready for delivery to be registered simultaneously or not later than 31 December of the year when the first vessel is registered, can apply for Fleet Discount (60% discount on registration fees and annual tax and annual consular fee) for the first year and the applicable Newly Built Vessel Discount according to each vessel’s GT on annual tax and annual consular fee for the second and third years.

Maritime Trade Law No.55 of 6 August 2008:

       ▪ Law No.55 on Maritime Trade updates Panama’s maritime substantive law.

        ▪ Approves the principal international maritime conventions.

       ▪ Updates and uniform shipping terminology.

       ▪ Regulates certain contracts that were not included in Book II of our Commercial  Code, such as the

         Multimodal Transport and Towing Contracts.

       ▪ Give a higher priority ranking status to the Panamanian naval mortgage as a maritime lien.

       ▪ Allows for an extract of a mortgage contract to be registered at the Public Registry.

       ▪ Provides for an additional 30 days from the moment the preliminary registration expires to file the

         permanent document that convalidates the preliminary registration.

       ▪ Facilitates the enrollment of vessels under construction and their corresponding mortgages.

       ▪ Eliminates the filing of the corporate tax.

       ▪ The modernization of Panama’s maritime new legislation goes hand in hand with the future expansion

         of the Panama Canal.

New Special Registry for Laid-Up Vessels

The General Directorate of Panama’s Merchant Marine by means of Resolution 106-09-DGMM of February 9^th, 2009 has resolved to establish a special registry for laid up vessels due to world’s financial crisis.  This lay-up registration will be applicable for vessels already registered or to be registered at the Panamanian Merchant Marine.

During lay-up registration, vessels will be exempted of the following payments:

1. Registration fees (for vessels to be registered for the first time).

2.  Annual Inspection fee.

3.  Accident Investigation fee.

4.  Any other fee that the General Directorate of Merchant Marine may state.

This special registry will be valid for one year and may be extended for an additional term of one year and request must be made through a suitable lawyer in Panama or through a Consulate, a Panamanian Economic and Commercial Office or through any other body authorized for this purpose by the Panama Maritime Authority abroad.  Said request must specify the date in which the vessel was laid up and its exact location and it must be accompanied by the following documents:

1.         Power of Attorney in favor of a suitable lawyer in the Republic of Panama in cases of vessels coming  

        from a foreign registry.

2.         A document that certifies the applicant’s ownership on the vessel in case the vessel is not registered in   

        Panama.

3.         In cases of vessels coming from a foreign registry, these must submit a document that certifies the

         vessel’s deletion from said registry.

4.         Sworn Statement issued by the ship owner stating that the vessel was laid up and that it will not be

        moved nor will it sail while bearing a special statutory certificate of register.

5.         Declaration of Laid-Up issued by a Recognized Organization stating that the vessel was laid up and/or a

        Note issued by the Port Authority where the vessel is indicating that the vessel is located at said port

        since being laid-up.

6.         Any other additional documentation requested by the General Directorate of Merchant Marine.