Panama Canal update 2020

By Joaquin De Obarrio

The Panama Canal opened its gates on August 15, 1914 and expanded its capacity as of 2016. Over a century of successful operations, the Panama Canal has maintained a forward-thinking vision. We highlight recent updates and developments for 2020:


Coronavirus alert


All vessels approaching the Panama Canal for transit must disclose previous visits to countries with confirmed coronavirus cases. This protocol extends to vessels engaged in port cargo operations within Panama Canal waters. Vessels having docked in ports of countries with coronavirus cases, within 30 days prior to arrival, and/or having identified any case suspect on board, must report it through the Panama Maritime Authority and the Panama Canal Authority so that appropriate preventive measures can be taken.

The Panama Canal maintains a permanent health protocol aimed at the prevention of contagious diseases. A vessel with any passengers or crew on board with suspicious symptoms, must notify it upon arrival. Before transit, all vessels are subject to sanitary inspection, and if a case is detected it is immediately referred to the national health authorities, which investigate and determine if the vessel can continue its transit. If required, the vessel may be held in quarantine as a precautionary measure.


Landmark constitutional decision


The Supreme Court of Panama has recently issued a constitutional ruling paving the way for the Panama Canal Authority to engage in port activities. Plaintiffs argued against the constitutionality of Article 8 of the Regulation for the Fixing of Tolls, Fees and Rights of Transit through the Canal, related services and complementary activities issued by the Board of Directors of the Panama Canal Authority, which states: "The Authority shall carry out activities complementary to the operation of the Canal, such as dredging, electric power generation, water processing, telecommunications, logistics and ports". The claim stated that the Board of Directors of the Panama Canal Authority, was not entitled to regulate complementary activities, under the Constitution and the Panama Canal Organic Law.

The Attorney General for the Administration argued in favor of the constitutionality of the article stating that, from a historical standpoint and in accordance to the National Maritime Strategy, the Canal activities are intimately related to the port activities, being both part of the commercial services provided by the Republic of Panama. The Panama Canal Authority, the Chamber of Commerce and the Panama Business Association also argued in favor of the constitutionality.


When ruling in favor of the constitutionality of the article, the Supreme Court considered that even though the Panama Canal Organic Law does not define which are the activities and services related to the administration, operation, conservation, maintenance and modernization of the Panama Canal, this does not prevent these from being regulated by the Board of Directors, since the regulations issued by the board, which enjoy constitutional legitimacy, complement the general articles contained in the Panama Canal Organic Law.

IMO 2020


Preparing for the entry into effect of the international Sulphur cap for marine fuels (IMO 2020), the Panama Canal Authority issued Advisory to Shipping No. A-39-2019 dated November 6, 2019. The note upholds the mandate initially established in NT No. N-1-2019 “Vessel Requirements” requiring all vessels scheduled to transit the Canal to switch from residual fuel to marine distillate fuel prior to arriving at Panama Canal waters.

Exceptions to the mandate include vessels making only a local port call and not transiting, and vessels anchoring prior to transit which will be permitted to use residual fuel for their auxiliary generator engines, boilers, and other ancillary equipment while at the Pacific and Atlantic Anchorages, only if they are capable of maintaining their main propulsion engines simultaneously on marine distillate fuel. The Panama Canal Authority expressly prohibits the use of open loop scrubbers in order to preserve the quality of its waters, especially freshwater reservoirs.


Water Conservation Strategies


As part of the ongoing water conservation efforts in the Panama Canal watershed, effective February 15, 2020, the Panama Canal Authority has established a Fresh Water Surcharge. This consists of a US$10,000 fixed fee which will be applied to all transiting vessels over 125 feet in LOA. In addition, a variable fee ranging from a minimum of 1% to a maximum of 10% of the vessel’s toll will be applied. The percentage to be applied will depend on Gatun Lake level at the time of transit. The official lake level will be published daily, as well as forecasted for the following 2 months.


A Vessel Visit Creation Fee, has also been established and will be applied to all visits for transit at the time they are created in joint Panama Canal and Maritime Authority system. The processing fee will be US$5,000, for vessels 91 feet in beam and over, and US$1,500 for vessels over 125 feet LOA, but less than 91 feet in beam. These strategies are aimed at the water conservation efforts to combat changing rainfall patterns and historic low water levels in Gatun and Madden Lake.


Arrest of Vessels by Panama Maritime Courts


As per the Panama Canal Authority Navigation Regulations, the transit of vessels in the Panama Canal may not be interrupted in order to enforce attachment measures as ordered by the Maritime Courts. Effective January 1, 2020, the Panama Canal Authority has enacted guidelines to guarantee transit. Under NT Notice to Shipping No. N-8-2020, a vessel under arrest will be considered to be in a "not ready" status until a release or authorization to move is issued by the Maritime Courts and the ship's local agent notifies Marine Traffic Control of the release.


To guarantee uninterrupted operations, no arrest orders will be served on vessels under way with a pilot on board and proceeding to transit. Court ordered arrests will be executed after the Canal transit has been completed. The Notice to Shipping, requires the Maritime Courts to attempt to notify local agents of vessels scheduled for Canal transits, pending arrest.


Agents are responsible for immediately relaying to Marine Traffic Control that the vessels are under arrest. Extraordinary services provided by the Panama Canal Authority due to arrests will be charged to the vessels. Should the vessel not be ready to proceed at the time fixed for transit, the booking fee will be forfeited.


Article first published in ShipArrested News - March Edition


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