Panama, April 27, 2020.
On April 23, during a ceremony presided by South Korean President Moon Jae-In, among other South Korean authorities, was officially launched the “HMM ALGECIRAS” – the world’s biggest containership.
The new vessel is registered under the flag of the Republic of Panama, and we are pleased to share that the Ship Finance and Registration team of Morgan & Morgan participated as local counsel in the financing for a total amount of over US$1.75 billion for the acquisition of said ship by the shipping company HMM Co., Ltd. (formerly Hyundai Merchant Marine Co., Ltd.) and eleven (11) other container vessels of the same dimensions. Morgan & Morgan is also responsible for the flagging and representation before the Panama Maritime Authority as Resident Agent of these ships.
“It is a great distinction for Panama to have been chosen as flag registry for these twelve (12) mega container vessels with a capacity of 23,000 TEUs and more. As a law firm, we are very proud to have participated as Panama counsel in this process, which is already a landmark in the history of the Merchant Marine of our country”, said Jazmina Rovi, partner at Morgan & Morgan and head of the Ship Finance and Registration Department.
The HMM ALGECIRAS now joins the fleet of 18 Panama-flagged vessels amongst the 24 largest in the world (according to IHS Markit) and will be employed to connect the trade route between Asia and northern Europe.
Panamá, October 29, 2019. Partners Jazmina Rovi and Francisco Linares contributed to the Panama chapter of Getting the Deal Through: Market Intelligence-Shipping 2019, a publication with an analysis of the evolution and the regulatory scenario of the maritime industry globally.
To complete article can be read on the following link:
In recent days, was held the seminar “The Maritime Arbitration in Panama CECOMAP, The New Alternative”, an event organized by the Center for Conciliation, Mediation and Maritime Arbitration of Panama (“Cecomap”) and the China Maritime Arbitration Commission (“CMAC”), with the collaboration of the Chamber of Commerce, Industries and Agriculture of Panama.
The activity covered important subjects for the Panamanian and international maritime sector, and in the same highlighted the exhibitions of Mr. Francisco Linares and Mr. Juan David Morgan, Jr., partners of the Maritime Services Unit of Morgan & Morgan.
The event also served as a framework for the signing of the mutual collaboration agreement for maritime arbitration between the Republic of Panama and the People’s Republic of China, to promote the use of arbitration and mediation in maritime contracts and exchange services between both countries.
By Enrique de Alba Arango, Partner of Morgan & Morgan Law Firm
On June 27 of the present year, a historic event for the Canal and the International Merchant Marine Registry of the Republic of Panama occurs.
One day after the new locks of the Panama Canal were inaugurated with the transit of the container vessel “Cosco Shipping Panama, the first vessel registered under the Panamanian flag transits, which coincides with being the first transit of a liquid petroleum gas vessel named “Lycaste Peace” in its commercial traffic from Houston, Texas to the Port of Hitachi, Japan, owned by the Japanese shipping Line Nippon Yusen Kaisha (NYK Line) and represented in Japan by Mitsubishi Logistics Corporation. The Resident Agent of this first transit of the vessel registered in Panama is Morgan & Morgan Law Firm.
Since the inauguration of the Expanded Panama Canal, the vessel that has paid the highest toll so far and also set a new record due to the Expanded Canal was the vessel “Mol Beyond” which paid the sum of $837,203.00.
Several precedents are well marked on the Panama Canal and its International Merchant Marine Registry, whose origin is given with the enactment of Law 63 of December 15, 1917 which amends and supplements the Fiscal Code, giving the power to grant the national flag to a vessel that so requests it and which will celebrate its 100th anniversary next year 2017. It is understood according to records that the first vessel registered under the national flag was the carrier Belén Quezada.
By Law 8 of January 12, 1925, procedures for the nationalization of merchant vessels are created and this law formally establishes the Merchant Marine Registry of the Republic of Panama.
Nowadays, the Maritime Registry of Panama is proud and honored to be the world’s largest register with approximately 8,831 registered vessels to June 14 of this year representing 235,295,719.26 gross tons. The registration of vessel and other activities under the umbrella of the Panama Maritime Authority, as of December 2015 contributed to the treasury the sum of $162,089,501.00.
Among the legal instruments that have brought success to the merchant marine of the Republic of Panama, we can mention in addition to those already mentioned:
- Law 2 of January 17, 1980, which creates the Directorate General of Consular and Maritime Affairs.
- Law 14 of May 27, 1980, whereby the preliminary registration of ownership titles and mortgages through proprietary merchant marine consulates and directly with the Public Registry of the Republic of Panama is regulated.
- Decree-Law 7 of February 10, 1998 creating the Panama Maritime Authority, grouping into a single entity all activities related to the maritime sector.
Subsequently, from 2008 it was decided to update all our legislation related to the maritime activity and four new legal instruments are enacted:
- Law 57 of August 8, 2008, whereby the Directorate General of Merchant Marine is created (grouping into a single law, everything related to this activity);
- Law 55 of August 8, 2008, which replace the Book II of the Commercial Code of the Republic of Panama to create the Maritime Trade Act, as amended by Law No.27 of 28 October 2014;
- Law 12 of January 23, 2009 amending Law 8 of March 30, 1982 and Law 11 of May 23, 1986, which in turn was amended by Law 58 of October 6, 2010 and Law 16 of March 21, 2013, whereby standard maritime procedures are enacted,
- And Law 56 of August 6, 2008, whereby the General Ports Act and its regulations is created.
I mention these legal instruments, because without them, the development of our merchant marine, international forum of maritime litigation and port activity would had been set aside by the competition provided by countries that develop these same type of activities associated with the maritime industry.
The momentum that our lawyers have given to the development of maritime activity in the Republic of Panama to the challenges of trade, should never stop because the success of Panama in this important industry is due to the constant renewal of its legal instruments, seeking new and better ways for the development of the maritime sector.
The foregoing leads us to mention an important bill that is planned to be submitted to the National Assembly this month of July on maritime financing. This bill creates a special legal regime for financing operations of the local and international maritime industry, where tax, labor and immigration incentives are granted to companies that carry out these operations from Panama.
The entities that could benefit from these incentives are the general license, international or representative banks duly authorized by the Superintendence of Banks, companies carrying out operations to design, structure and develop the financial conditions of maritime credit and its guarantees, regulated financial companies and maritime financing entities and joint ventures (Joint Venture) of the Panamanian State with individuals.
Among the tax incentives will be the exemption from paying income tax from such funding for the construction and purchase of vessels. In order to benefit from this tax incentive, these entities must establish a separate accounting which states the recording of the date of execution of each loan.
Those companies whose maritime financing operations are carried out in the Republic of Panama or shipyards engaged in the construction and repair of commercial vessels, yachts and others will not cause the payment of income tax.
There are also exempted from paying income tax, interest and fees earned by banks for maritime financing activities that are duly accredited for such activities, as well as income from insurance and reinsurance that secure credits from certified maritime financing institutions and/or Bankable Maritime Projects.
The bill in question establishes a low import tax on machinery and equipment needed for the development of the maritime industry, no greater than 3%.
As for immigration and special labor regime, it is aimed to create the necessary conditions to help develop the relevant maritime activities with the maximum efficiency required by a maritime center of this nature.
A Certifier and Supervisory Board of Maritime Financing Entities is created, which would consist of the following members:
- A member appointed by the Panama Maritime Authority.
- A member appointed by the Ministry of Economy and Finance.
- A member appointed by the Ministry of Commerce and Industry.
- A member appointed by the Ministry of Labor and Workforce Development.
- A member appointed by the National Immigration Service.
- A member appointed by the Council of Financial Regulations.
- A member appointed by the Panama Canal Authority.
Before I conclude and the reason for this article is partly to draw attention to a provision that has been introduced at the last minute to the maritime financing bill mentioned herein, where it is imposed a term of 20 years to the tax exemptions, incentives and other benefits that this new project aims to create in the Republic of Panama.
It is advisable to study this condition or term carefully, because such a sophisticated and specialized activity as the maritime financing activity, should not be set a peremptory period, given than this period would undermine completely the intention to create a new activity that could pay off to the economy of the Republic of Panama, which in other international financial centers produce optimal results.
Let us hope that all the good spirit that every Panamanian has had in recent days with the opening of the newly expanded locks of the Panama Canal and its role as a facilitator of international maritime trade, help to understand how important it is to maintain our competitiveness in this important industry.
It is a true and lawful translation into English of the original document written in Spanish – Michelle Williams – Authorized Public Translator – Resolution No. 5775 of November 12, 2014 – Republic of Panama.
On Monday June 27, 2016 the Lycaste Peace, a liquefied gas carrying ship from the Japanese company NYK Line, became the first vessel with a Panamanian flag to transit the Canal expansion after its inauguration.
NYK Line is one of the largest transportation companies in the world, part of the Mitsubishi consortium, one of our firm’s most reputable clients.
Some of Morgan & Morgan’s partners were present at the Cocolí locks to witness this ship’s historical journey that not only fills us with pride but also lets us become a part of this new chapter in the history of the Panama Canal.
Morgan & Morgan advised Tri Marine International in the constitution of Maritime Mortgage for an amount of up to US$4,800,000.00
Morgan & Morgan and García & Bodán Honduras, worked together to constitute a Maritime Mortgage in favor of their client Tri Marine International for an amount of US$4,800,000,00, which supported various fishing contracts signed between Tri Marine and its providers worldwide, to provide funding.
Tri Marine is an important tuna provider (yellowfin, between others), the company operations include a refrigerated fleet of fishing vessels that operates in the Pacific, together with other affiliated and hired vessels. It also operates more than a dozen of processing plants around the world. In this sense, both law firms provided legal services in order to prepare and formalize a mortgage over a vessel with Honduran flag. The ship responds for the obligations generated as the result of the line of credit that was granted by Tri Marine so that the foreign society, owner of the vessel, could continue its operations under international regulations, as well as the parameters established by the Tri Marine, who subsequently sells its product.
The transaction which involves companies from different nationalities that respond both through their vessels registered in Honduras as well as in other jurisdictions, as well as solidary guarantors of different nationalities.
In the transaction participated Vanessa Oquelí from García & Bodán Honduras, and Gianela Rivas from Morgan & Morgan Panama, both with extensive experience in maritime issues.
Morgan & Morgan y García & Bodán Honduras, trabajaron en conjunto a fin de constituir una Hipoteca Marítima a favor de su cliente Tri Marine International por un valor de US$4,800,000.00 la cual respaldaba diversos contratos de pesca firmados entre Tri Marine y sus proveedores a nivel internacional a quienes brindan financiamiento.
Tri Marine es un importante proveedor de atún (aleta amarilla entre otros), sus operaciones incluyen una flota de buques pesqueros refrigerados que navegan por el Pacífico, así como los barcos de pesca contratados y afiliados. También opera más de media docena de plantas de procesamiento alrededor del mundo. En este sentido, ambas firmas prestaron sus servicios jurídicos con el fin de preparar y formalizar hipoteca sobre una embarcación con bandera hondureña. El buque responde a la línea de crédito que le fue concedida por Tri Marine para que la sociedad extranjera propietaria de la embarcación pueda proseguir con su operación de captura de atún bajo las regulaciones internacionales, así como los parámetros establecidos por el Tri Marine a quien posteriormente vende su producto.
La transacción se vuelve compleja al involucrar sociedades de distintas nacionalidades que responden tanto a través de sus embarcaciones registradas en Honduras, así como fiadoras solidarias de distintas nacionalidades.
En la transacción estuvieron involucradas las abogadas Vanessa Oquelí de García & Bodán Honduras; y Gianela Rivas de Morgan & Morgan Panamá, quienes cuentan con amplia experiencia en tema marítimos.