Registering a ship mortgage in Panama
A Panamanian ship mortgage can be written in any language, by public deed or by a private document with signatures authenticated by a notary or consul.
It is first recorded on a preliminary basis, at a consulate or at the registry in Panama, and that recording has the full effect of the final one for six months. The mortgage ranks after court costs, salvage and crew wages, and ahead of State claims for fees and taxes.
Form
The mortgage can be in any language, in a public deed or a private document with signatures authenticated by a notary or a consul. It has effect against third parties from its presentation to the registry, legalized by apostille or consul.
Source: Law 55 of 2008, article 260
Preliminary and final recording
- The preliminary recording is made at one of the authorized consulates, which sends it to the registry, or at the registry in Panama through a lawyer.
- If there is a defect, there are 10 business days to cure it.
- For six months, the preliminary recording has the effects of the final one.
- Within that time the mortgage is formalized and the final recording requested through a lawyer.
- The final recording relates back to the date and hour of the preliminary one.
Source: Law 55 of 2008, articles 251 and 252
The fee
The preliminary recording costs US$450 for the first US$2 million of the mortgage, plus US$150 for each additional million or fraction, up to US$1,200. A US$5 million mortgage, for example, costs US$900.
Source: Merchant Marine Circular MMC-232, section 4; Law 14 of 1980, article 7
Rank among maritime liens
Other maritime credits, such as stevedores, general average and supplies, come after these.
- Court costs incurred in the common interest of creditors.
- Assistance and salvage.
- Wages and compensation of the master and crew.
- The ship mortgage.
- State claims for fees and taxes.
Source: Law 55 of 2008, article 244
Ships under construction and sanctions
A ship under construction can be mortgaged once its ownership is recorded, with the builder’s certificate as title. If a ship is cancelled for international sanctions, the recorded mortgage remains and the registry notifies the creditor so it can exercise its rights.
Source: Law 55 of 2008, article 263; Executive Decree 512 of 2024, article 4
Questions people ask
Does a Panamanian ship mortgage have to be in Spanish?
No. It can be in any language.
How long does a preliminary recording last?
It has the full effect of a final recording for six months.
Do State tax claims rank ahead of the mortgage?
No. They rank right after it.
What the law does not say
- The registry fee for the final recording of the mortgage.
- The exact wording of the list of liens after the 2014 reform of the Maritime Commerce Law, which kept the order shown here.
Official sources
Header photo: ImagePerson, CC BY 4.0, cropped.
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