Federal Maritime Commissioner Louis E. Sola wrote Secretary Blinken on April 15, 2024, regarding the Panama Canal’s capacity.
Text of the letter:
Dear Secretary Blinken,
Thank you for diligently monitoring pressing maritime sector issues in the Red Sea. I am writing to you today express my concerns on matters related to the ongoing drought that impacts the Panama Canal’s capacity. The impact of this drought and the transit priority system at this global checkpoint holds significant impacts for U.S. commercial interests which warrants scrutiny.
Moreover, Panama’s flagging practices that have been highlighted by the U.S. House of Representatives for Iranian vessels poses significant concerns to national security. Additionally, there are concerning activities that involve sanctioned Venezuelan tankers and ship bunkering at the Panama Canal. These practices both challenge the effectiveness of international sanctions and risk comprising integrity of global shipping operations.
The work of U.S. State Department special envoy Abram Paley has been instrumental in shaping our approach towards these complex issues. Mr. Paley’s efforts have underscored the necessity of preventing ships from supporting groups designated as terrorist organizations through illicit oil sales. The U.S. State Department aligns with our goals and highlights the importance of continued vigilance and cooperation.
Recently, the U.S. Senate called upon the Federal Maritime Commission to rigorously investigate these matters in a formal hearing on February 28th , 2024. Chairman Maffei confirmed in the hearing that I will travel to Panama to investigate these actions in my official capacity directly, underscoring the urgency and significance of our intervention. This directive from the Senate highlights the national and international stakes involved and amplifies the need for decisive action.
My personal connection to Panama, stemming from my father’s immigration there and having family ties in the country, provides me with a unique perspective on this issue. With over 100 transits of the Panama Canal, I have developed a profound understanding and appreciation for the maritime operations and challenges in this critical region.
There are concerning trends involving the use of Venezuelan-based vessels for transloading drugs to small boats and container ships waiting to transit the Panama Canal. Notable incidents, such as the seizure in a U.S. port of over 20 tons of cocaine valued at over $1 billion from containers aboard a ship in June 2019, illustrates the critical breach in maritime security. It is important to address the misuse of commercial shipping for illicit activities, particularly involving vessels flagged by nations that may not fully copy with international norms or U.S. sanctions.
These maritime challenges are at an all-time high, reminiscent of the significant measures taken when President Bush banned all Panama-flagged vessels from U.S. ports in 1989. The Shipping Act grants the Federal Maritime Commission the authority to regulate certain behaviors of foreign-flag carriers when it involves U.S. trade. This includes practices that might be considered unfair or discriminatory against U.S. shippers, U.S. carriers, or other stakeholders in the maritime trade. Leveraging this authority can significantly aid in addressing these problematic issues.
Given the strategic importance of these issues, I propose the following actions:
- Strengthen the collaboration between the Department of State and the Federal Maritime Commission to enhance the scrutiny of maritime practices by countries like Panama to ensure alignment with legal standards and U.S. policies.
- Initiate bilateral discussions with the Panamanian authorities as there has not been any formal discussion since 2019.
- Review and update discriminatory policies under the Shipping Act to address the modern challenges posed by the flagging of vessels from sanctioned continues to ensure robust and enforced mechanisms are in place at every level.
I look forward to your insights and the opportunity to continue working together on these critical issues. The integrity of international maritime governance depends on our efforts to address these challenges decisively and cooperatively. I am eager to support any initiatives that might arise from this dialogue. I look forward to discussing how we can collaborate and enhance U.S. maritime security.
Thank you,
Louis E. Sola
Federal Maritime Commissioner
Louis E. Sola is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are their own and do not necessarily represent the position of the Commission.