Panama's Maritime Authority said it will impose sanctions on vessels, including fines of up to $10,000 (Dh36,750) and withdrawing its flag from the ship, if they deliberately deactivate, tamper or alter the operation of their tracking transponders.
The issue of ships disabling tracking equipment – designed for safety at sea and to prevent ships colliding – has come to the fore in recent months as a method employed by vessels seeking to avoid US sanctions for shipping Iranian oil.
"This General Directorate of Merchant Marine will impose sanctions to all those Panamanian flagged vessels that deliberately deactivate, tamper or alter the operation of Long Range Identification and Tracking System or the Automatic Identification System," it said in a statement.
The head of Panama's Merchant Marine, Rafael Cigarruista, told Reuters the decision to sanction ships that do not comply with the rules are part of commitments made by Panama to avoid sanctions from international organisations.
"We want our ships to not deliberately turn off their equipment," said Mr Cigarruista.
Panama has the largest shipping fleet in the world with some 8,000 vessels registered.
The Panama Maritime Authority said it is constantly monitoring its fleet and it will initiate an internal investigation if it detects a vessel's transponder is down or not reporting.
That investigation "may culminate with sanctions that will be deemed appropriate [and] in some cases where the vessel is found having this conduct on regular bases could be de-flagged or deleted from the registry."
The Trump administration on May 14 Thursday issued guidelines to help ship owners and insurers avoid the risks of sanctions penalties, standards that were modified following months of discussions with industry.
The guidelines, known as a Global Maritime Advisory, concern sanctions on Iran, North Korea and Syria. The State Department said it is committed to disrupting sanctions evasion and smuggling of goods, including oil exports from Iran, which the Trump administration imposed sanctions soon after pulling out of the Iran nuclear deal in 2018.
The maritime advisory was first outlined on March 9 by David Peyman, a State Department deputy assistant secretary. He said then the advisory would, among other things, warn shippers not to turn off transponders and to not store Iranian oil.
Ships have been tracked sailing close to Iranian waters, turning off their transponders and then entering to load up on oil before leaving again and turning on their locators. Another method employed is using ship-to-ship transfers with transponders turned off.
However, even with tracking equipment turned off, ships can still be located using satellite imaging and other tools.
Last year, Panama withdrew its flag from at least 60 vessels linked to Iran and Syria due to US sanctions measures. Most of those vessels were owned by Iranian state-run companies but they also included ships linked to oil deliveries to Syria, sources told Reuters.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Tissue re-implanted at a time of the patient’s choosing
Full hormone production regained within 4-6 months
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
