PRESS RELEASEFOR IMMEDIATE RELEASE

PANAMA----June 28, 2023--- Despite the inclusion of the Panama Ship Registry in
the Paris Memorandum of Understanding (MoU) grey list, the Panama Maritime
Administration remains committed to the compliance of its fleet by taking measures
to reduce Port State’s detentions of Panama-flagged vessels.

The Paris Memorandum of Understanding (Paris MoU) is made up of 27 European
countries and Canada and aims at eliminating vessels that are below maritime
safety standards and prevent pollution of the marine environment.
Thismeasurement is made with a statistical system of inspections indicating ship
registries that comply with the highest qualifications in maritime safety standards,
by considering the total number of inspections and detentions during the period ofthe last 3 years. The registers are classified into three groups:•••

Administrations placed on the White List: These are administrations whosefleet maintains a high level of compliance.
The Grey List: Administrations whose fleet maintains an acceptable level ofcompliance with a low level of detentions.
Administrations placed on the Black List, are the administrations whose fleet
maintains a high level of detentions. Administrations in this segment areconsidered as high risk.

The Panama Ship Registry has around 8,500 ships and has been inspected atleast 45,000 times, which gives an overall fleet compliance level of 96.17%, and adetention rate of 3.83% downwards.

The Panama Maritime Authority has been committed to the attraction of newly built
ships, due diligence and the acceptance of ships coming from companies with highstandards, to position Panama in the corresponding position. Panama has beenable to attract 1,548 new buildings and 50 million tons in the last 4 years, which isa very important figure for the sustainability of the Registry.

Some of the main reasons for the inclusion of Panama in the Paris MoU grey list
which could have generated situations of non-compliance are:

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Age of the legacy fleet operating in this area: of the 374 detentions reported(in the last three years), 104 vessels were over 30 years old, 35 vessels
over 40 years old, a situation that puts the fleet at risk given the stringencyof the inspections in this MoU. These vessels are being subjected to a
special inspection regime, and if they do not improve, they will be removed
from the register.
A trend was detected of ships certified by Recognized Organizations with ahigh number of detentions or reported deficiencies and having valid
technical certification on board, without prior notification to the Directorate
General of Merchant Marine (Ship Registry). These companies have been
audited, some suspended and revocation of their delegation of authority is
not ruled out.
The economic situation generated by the pandemic caused somecompanies to declare bankruptcy and abandon their vessels and crews.
Panama detected that the Flag State inspections carried out by theapproved inspectors were not yielding the expected results, even cases
were detected where the inspectors did not attend on board the vessels andhave carried out remote inspections acting independently and without theauthorization of the AMP’s Directorate General of Merchant Marine.

The Panama Ship Registry has implemented a series of actions to maintain its
compliance standards, such as:••••

Due diligence is strengthened and ships older than 30 years are rejected,and due diligence is extended to companies. During the year 2023 alone, 20
ships have been rejected due to their history of detentions in the preflagging process.
Non-compliant vessels are sanctioned and cancelled. During 2023, 1 vessel
was sanctioned for multiple detentions and 18 vessels are in a cancellation
process due to their detention history.
Flag State inspectors (ASI) with poor performance are sanctioned andcancelled. To date there are 3 inspectors who have been suspended forpoor performance, 14 are in the process of suspension and 9 have beencancelled from the list of Flag State inspectors approved by the AMP’s
Directorate General of Merchant Marine.
The purging of the Register continues. Since 2021, 216 ships have been
removed from the register which is in the process of purging the fleet.