The Panama Maritime Authority (PMA) has reported that it is currently working on the implementation of the Red Ensign Group Yacht Code (REG Code), to come into effect on 1 January 2019. Implementation of the REG Code has been commenced as part of a wider strategy to strengthen Panama’s position in the superyacht market by establishing the legal regime and the technical standards for safety and the prevention of pollution for superyachts. The PMA will be accepting the registration of commercial superyachts under both Parts A and B of the code.
By implementing the REG Code, an existing void is filled in the Panamanian Merchant Registry as far as commercial yachts are concerned. Previously, commercial yachts fell under the auspices of Decree No.18, 30 May, 1984 and were, therefore, legislated for by out of date practices in a supplementary manner.
“The [REG] Code is based on what is stipulated in the International Convention for the Safety of Life at Sea (SOLAS), the International Convention on Load Lines, the International Convention on Training Standards, Certification and Guards (STCW in English) of the International Maritime Organisation (IMO), it also allows yachts to receive international documentation that allows them a free commercial exploitation under our Registry, in a responsible, current and secure way,” explains Juan Jose Espino Sagel, partner at Pardini & Asociados.
“Additionally, it details the requirements that these ships must meet, according to their construction and structural resistance, the characteristics of the machinery, the electrical installation, the government equipment, the rescue devices, the fire safety, radio communications, means mooring and towing, and accommodation and protection of people,” continues Sagel. “It establishes specific criteria regarding the crew on board, communication systems, authorisations and certifications, inspection, responsibilities of the owner and passengers and navigation conditions, among others.”
The implementation of the REG Code in Panama will not affect recreational vessels intended exclusively for racing, wooden hulls and primitive construction, originals and unique reproductions of historic ships, or those less than 24m in length.
“Registration fees are likely to be competitive and, though it remains to be seen how the PMA will interpret the Code, it is likely to be commercial and pragmatic in approach,” comments William MacLachlan, senior associate at HFW, London. “This announcement brings much needed clarity to the registration of commercial yachts in Panama and, perhaps, paves the way for Panama, in time, to become a popular choice for the registration of commercial yachts in much the same way as the Marshall Islands has.
“Whilst not an experienced yacht registry, the Panamanian registry has been running since 1917, has about 22% of the world’s commercial fleet on its books and, as an ‘open registry’, has very limited restrictions on ownership. It has a global network of approved surveyors and the filing and issuing of documents with it and by it is undertaken through a network of Panamanian Consulates, thereby making it accessible to the yachting industry.”
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