services rendered to our clients of the Panama Ship Register. Therefore having been subject to an Audit achieved by the Lloyd’s Register by means of becoming part of the Quality Assurance System I S O - 9 0 01-2 0 0 0 , which at the same time is the very first step to achieve the

The Panama Register continues to grow sustaining leadership as the world’s top merchant fleet. During the first six months of 2008 the Panama Register increased by 4.7% bringing the total fleet to 7, 965 vessels at June 2008, up from 7,605 vessels at December 2007 and growing by 5.4% to 177.09M gt, up from 168M gt at December 2007, according to figures released by Lloyd’s Register. Newbuilds constituted 50% of the increase recorded during the first half of 2008.

The Panama Maritime Authority (AMP) internal register that includes ships of all size, as of June 2008, was up to191.88M gt compared to 186.14M gt at June 2007. The AMP’s Directorate of Merchant Marine has set the goal of “increasing figures by 10% in 2008 and reducing fleet age to 17 years, down from the present 19 years,” states its director, Alfonso Castillero. But crucial “for us at the Registry, is to render the best service to our customers and improve our daily services.

PANAMA FLAG GROWS

A MESSAGE FROM THE ADMINISTRATOR

Dear Clients

Panama continues at the forefront of modern technology, and likewise as world leader in Ship Register. We have undertaken the initiative for continual renovation onto our modernization process, geared to render excellence in service and a speedy vessel documentation procedure.

Our first phase of automation calls to access the brand new electronic ship register that enables our clients to save 80% of their valuable time when dealing with vessel registry procedures. The system has been designed to grant authorized lawyers access via a Public Key Infrastructure or PKI, granting them further access onto an electronic page for required document inputs for the aforementioned purpose. Such technology bears the modality of rapidly accessing the various services rendered through the Directorate General of Merchant Marine.

Noteworthy to mention on the new General Law of Merchant Marine (Law 57 of 6 august 2008), is that such has been structured to improve the competitiveness of the Panama Ship Register, by means of introducing measures to improve fleet age, stimulate its growth and foment customer loyalty, amongst other.

Pertinent to our principal objective dealing with Quality Assurance, lays the compromise not only to sustain leadership as flag of excellence, but likewise, of the

vol. 1 N° 2 November 2008

Telephone Exchange +507 501-5100 24/7 Segumar Panama Office: +507 501-5350

PANAMA MARITIME AUTHORITY NEWSLETTER

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Among the newbuilds recently registered under Panama flag we have the world’s largest iron ore carrier, the Brasil Maru.” The 327,180 mt dwt VLOC is owned by Japan’s Mitsui OSK Lines Limited (MOL) that has destined the Brasil Maru to a long-term contract with Nippon Steel Corporation to transport Brazilian iron ore to Japan upon March 2008. MOL also happens to be the first Japanese Shipping Company to begin utilizing VLOC’s. The cited Japanese Shipping Company upon June 2008 proudly announced that the Brasil Maru obtained recognition for being ‘Ship of the Year for 2007’ by the Japan Society of Naval Architects and Naval Engineers.

The Naples, Italy based MSC Cruises’ a subsidiary of the Mediterranean Shipping Company (MSC) operator of cargo vessels, registered it’s first 133,500 ton post-Panamax passenger cruise liner on Panama flag. The passenger cruise ship is scheduled to be christened on 18 of December 2008, being the largest ship found within the Panama Ship Register.

list of contents

Panama present at Posidonia

Implementation of FAL-65

AMP employees to benefit from enrolment in the Administrative Career

AMP adopts the electronic technology for Ship Register

Marine Accident Investigators International Forum (MAIIF)

A message from the Administrator

Panama flag grows

Panama responds to Paris MOU

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Panama’s National Assembly approves three maritime laws 2

Brasil Maru

Fernando Solorzano

Voluntary Audit petitioned before the International Maritime Organization, that has been scheduled for this upcoming December 2008.

We rest assure geared in the right direction, for we are to continue innovating and modernizing our registry, in order to offer our clients the best service possible. And once again, I thank you all for the valuable trust you have deposited on our Ship Register.

Regards,

Fernando Solorzano Administrator

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During the first quarter of 2008, the Panama Maritime Authority or Autoridad Maritima de Panama (AMP, for its italics in Spanish) brought forth before the National Assembly of the Republic of Panama, reforms onto four crucial maritime aspects, such as: changes in Book Two of Panama’s Commercial Code of 1916, a general port law pertinent to future national and international port concessions, a new procedural law, and reforms to the merchant marine legislation. The Assembly approved three of the four petitioned modifications, being such, the Merchant Marine Law, the Ports Law, and the Maritime Commercial Law (Law 55 of 6 August 2008). “We are convinced it is just a matter of time before we have get the complete package rolling, to boost ship registration, strengthen our maritime sector and reduce AMP’s lengthy procedures,” remarks the AMP Administrator Fernando Solorzano.

The new merchant shipping law (Law 57 of 6 August 2008) is to ease administrative and legal procedures, render incentives for newbuilds, and loyalty to the Flag. The legislation, which enters into force once divulged in the Official Gazette, besides granting incentives over newbuilds, as mentioned before, also grants incentives to individuals that register fleets, depending on

PANAMA’S NATIONAL ASSEMBLY APPROVES THREE MARITIME LAWSgross tonnage, and vessel type.

Fleets composed of 5 to 15 ships are entitled to a 20% discount on registration fees; 16 to 50 vessels obtain a 35% discount, whereas 51 vessels up embrace a 60% discount. “The new legislation will improve the age of the fleet and create mechanisms to aid Panama Ship Register to quickly respond before eventual accidents abroad,” says Alfonso Castillero, head of the AMP’s Directorate of Merchant Marine. “It is a very modern law that fosters competitiveness and sustains our worldwide leadership of the merchant fleet,” he adds.

Among reforms to the Merchant Marine Law legitimated at the end of June 2008, are found new legislations where Panama-hoisted cruise ships “can officiate” marriages onboard. The legal marriage and paper signing is to be recorded by the Master of the vessel within the Marriage Record Book, where the marriage certificate is then authenticated by a Consul of Panama, and further submitted to the Directorate of Merchant Marine for its due entry before Panama’s Civil Registry. The modification was undertaken before the petition made by the cruise industry, which has an extensive number of passenger cruise-liners registered with the Panama Flag.

PANAMA has counteracted through a series of new technical requirements before Paris MoU for sending the world’s largest ship register back onto its ‘black list’.

The Panama Maritime Authority or Autoridad Maritima de Panama (AMP, for its initials in Spanish), through it’s Directorate General of Merchant Marine which manages the Panama

PANAMA RESPONDS TO PARIS MoU

Ship Register emitted resolution #106-00-DGMM last July 2008, ordering vessels over 20 years of construction to undergo a survey by any duly recognized organizations (ROs) before docking at any port within the Paris MoU. Should a vessel fail such survey proportioned by an RO, would occasion the vessel to be “cancelled” from the Register or “fined”, warned the authority.

Moreover, any vessel bearing the aforementioned age having been detained twice within a six month lapse is subject of being cancelled automatically from the Register. To date, the Panama Ship Register has cancelled 76 vessels due to deficiencies, with a further 20 more in process of cancellation, mentions Alfonso Castillero, Director General of Merchant Marine.

“It is a very small amount compared to the size of the fleet and represents only 9% of the detentions of vessels inspected,” he says

Castillero distinguishes that the number of detentions cited in the Paris MoU “does not reflect the quality of the flag, but solely the behavior of ships operating in that area. The formula and factors use [to include us in the Black List] does not help at all a big fleet like ours”, he said. “We are taking the necessary measures to make sure that 98% of our fleet – which is a high - quality fleet – is not affected by those few ships with defective records,” asserted Castillero.

The Paris MoU detentions are dominated by vessels over 20 years-old, as general cargo, multipurpose carriers and bulk carriers.

The implementation of the new General Law of Ports (Law 57 of August 6, 2008) particularly happens to be an important legal instrument to advance Panama as ‘the maritime centre of the Americas’. Until the approval of Law 57, port regulation was ruled through administrative concession laws. The new law establishes a clear and efficient procedure to obtain the necessary concession or contract-law enable to operate ports in Panama, modernize the regulatory framework, as well as supervision by the respective public authorities that have competence on port activities. Additionally, the law is to rule over rights and obligations on all future port concessions handled overseas. Presently, there are several port projects under consideration.Another characteristic of the aforementioned law is that it establishes principles on public policy, pertinent to port administration, also over the primary task of promoting private investment over port development activities, and the practice of free and fair competition within port operators and service providers.

Noteworthy to mention is the new law will not affect port concessions granted already through contract laws, nor amendments in terms of rates, exemptions and other conditions that have previously been ratified between the Panamanian government and port operators.

PANAMA MARITIME AUTHORITY

NEWSLETTERPANAMA MARITIME AUTHORITY

NEWSLETTER

PanCanal Plaza Building, Albrook, Omar Torrijos Herrera Avenue, Panama, Republic of Panama

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The Republic of Panama, by means of the Autoridad Maritima de Panama (AMP, for its initials in Spanish) has commenced implementing the Convention on Facilitation of International Maritime Traffic (FAL) 1965.

IMPLEMENTATION OF FAL-65

Such agreement obtained the approval of 127 member states to the International Maritime Organization (IMO) which facilitates international maritime traffic. The Convention FAL-65 was moreover ratified this year by the National Assembly of the Republic of Panama

A Panama delegation of the AMP led by it’s Administrator Fernando Solorzano, represented Panama before Posidonia 2008 shipping exhibition in Athens, that bestowed exceptional connection opportunities for structuring relationships with international shipping companies and important industry individuals.

The Panama delegation, besides the aforementioned Administrator, also counted upon the participation of Mr.

PANAMA PRESENT AT POSIDONIA

Alfonso Castillero, Director General of Merchant Marine, Ms. Maribel Barreiro, Director of Seafarers, and the Ambassador of Panama to Greece, Antonio Fotis Taquis, who met with Greece’s Minister of Transport Giorgos Voulgarakis to discuss issues of importance to both countries, and on the future signing of a Memorandum Of Understanding involving the maritime realm given Greece’s keen interest of having their f leet transit through Panamanian waters.

Conversations were also held with Greek ship owners rendering kudos to AMP’s current achievements, and emphasizing the relevant importance of mastering efficiency and promptness when dealing

and duly published in the Official Gazette upon July 15, when such entered into force.

An “Inter-Institutional Committee FAL-65” was created to work on measures to be taken for the implementation of FAL-65. The Convention should ultimately render a “unique document,” familiar to every Contracting Government of FAL-65, for arriving vessels.

The Convention seeks to facilitate import & export of goods and onboard security, primarily to reduce “red-tape” and delays for vessels calling on Panamanian ports, likewise for vessels that load and discharge in Panama, which includes passenger cruise liners. In particular, the Convention reduces to just eight the number of declarations that may be required from each vessel. The implementation of FAL-65 is to simplify documents and controls, to avoid public authorities from coming to port requiring the same information.

The procedures recommended by the IMO are to facilitate the movement of ships and may reduce the stay of ships in port for several hours or for days.

PANAMA MARITIME AUTHORITY

NEWSLETTERPANAMA MARITIME AUTHORITY

NEWSLETTER

P.O. Box 0816-01548 Panama, Republic of Panama

with ship registries. The Hellenic ship owners manifested having experienced marked improvements over the last four years, with Panama sourcing a much better customer service than ever before, to its clients.

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PANAMA MARITIME AUTHORITY

NEWSLETTER

Currently, some 579 employees of the Autoridad Maritima de Panama will benefit upon being admitted to the Administrative Career that renders them job stability, bonus gains, promotions, compensated leave of absence and other advantages of the Panamanian Public Service. Of those 579 employees, 133 AMP employees work in different departments of the institution and belong to the support personnel.

The entity’s Administrator, Fernando Solorzano did emphasize that achieving job stability is not synonym to impunity, for it demands excellence and sound job evaluations from employees to rejoice from such benefit.

AMP EMPLOYEES TO BENEFIT UPON BEING ADMITTED IN THE ADMINISTRATIVE CAREER

We welcome our customers’ suggestions and comments.Please contact us at: marketing@amp.gob.pa www.amp.gob.pa www.segumar.com

The AMP, having initiated its first phase of automation calls upon a new electronic Ship Register, to ease vessel registry procedures, as well as issuance of a new digital seafarer identity document emitted by the Directorate of Seafarers. Ever since July 7, 2008, the aforementioned Directorate has been implementing Merchant Marine’s Circular 163 addressed to shipowners and operators of Panama-flagged vessels, ROs, Masters, Surveyors and Port State Control authorities.

AMP ADOPTS THE ELECTRONIC TECHNOLOGY FOR SHIP REGISTER

The new system will save 80% of AMP clients’ time by accessing AMP’s data center, to be interconnected worldwide via Internet. Access to the data center—for authorized users of the Registry orchestrated by clients, lawyers and individuals—bearing public key infrastructure (PKI) with their respective user identities, are granted further access onto an electronic page (www.panamaregistry.com) for required document inputs and consultation.

This modern technology provides a rapid access to the website page www.panamaregistry.com, and likewise to each of the various services offered by the Directorate of Merchant Marine. Users and clients of the Registry are immediately able to see the statistics of each procedure achieved by the AMP. The new automation process and electronic Ship Register shall provide clients of Panama Ship Register, the best service ever.

The Directorate of Merchant Marine and the AMP’s marine accident investigation team participated in the Marine Accident Investigators’ International Forum that took place from September 26 to October 5 in Malta. The Marine Accident Investigators’ International Forum (MAIIF) is an international non-profit organization dedicated to the advancement of maritime safety and the prevention of marine pollution through the exchange of ideas, experiences and information acquired in marine accident investigation and to foster, develop and sustain a co-operative relationship among national marine investigators for the purpose of improving and sharing of knowledge in an international forum.

The Forum purpose is to promote and improve marine accident investigation, and to foster cooperation and communication between marine accident investigators and to encourage through cooperation the development, recognition, implementation and improvement of related international instruments, where appropriate.

Panama and Chile are the only Central and South American maritime authorities to be members of the Forum. The Panamanian delegation briefed the Forum fellow members on the progress made by the AMP’s Accident Investigation Department in investigating marine casualties and on the results of the investigations of the Mezzanine and Clinker Carrier accidents.

The Marine Accident Investigators’ International Forum (MAIIF)

Membership is open to any individual who is appointed as a marine accident investigator, or is a person employed in the process of marine accident investigation (other than a person representing commercial or private interests outside an administration).