REGISTRATION OF SHIPS UNDER PANAMANIAN FLAG

I. INTRODUCTION

The Republic of Panama is well known for its merchant fleet, the largest in the world. Since 1925, Panama has offered its flag of convenience through its open registry, to the international shipping community. Since then, many improvements have been made to keep the pace of the technological progress and bring a modern and adequate service. All started with the enactment of Law No. 8 of 1925.

The Office of the Merchant Marine of Panama (OMM) is the entity in charge of issuing Navigation Patents or Licenses, call letters and radio licenses to vessels, following official application for their registration under Panamanian flag.

The services provided by the OMM extends and reach every part of the world through the Panamanian consulates, authorized as agencies for the Merchant Marine, located in the most important shipping centers of the world. This system allows the OMM to bring an expedite and effective service to all Panamanian flag vessels.

We can enumerate some of the advantages of registering a vessel under Panamanian flag:
1. The vessel owner may be any natural or juridical person of any nationality.
2. Revenues arising from international maritime commerce of vessels registered in Panama are tax exempted in Panama.
3. Revenues arising from the sale of a Panamanian vessel are not taxable in Panama.
4. The easy access to Panamanian Consulates around the world and to the local authorities, through the law firms, for the expedite obtention of all documents required.
5. The Republic of Panama is signatory of all major international conventions related to the maritime activities.

II. HOW TO REGISTER A VESSEL UNDER PANAMANIAN FLAG.

A. Provisional Registration
In order to obtain registration under the flag of Panama, the following information must be furnished to our office:

1. Name of the vessel. 2. Vessel owners and domicile. 3. Former name of the vessel 4. Previous nationality of the vessel. 5. Entity in charge of the radio account and address (please see the detailed list of Radio Account Entities recognized by the Republic of Panama, in the Appendix). 6. Hull´s material. 7. Length of the vessel. 8. Breadth. 9. Depth (9, 10 and 11 in meters). 10. Type of service provided by the vessel (i.e. cargo, tanker, passenger, ferry, fishing, research, pleasure, drilling). 11. Country of building. 12. Year of building. 13. Name of builders. 14. Type and number of engines. 15. Number and type of cylinders. 16. Name of engine´s manufacturers. 17. Speed of vessel. 18. Horse power. 19. Classification Entity. (please see the list of entities recognized by the Republic of Panama).

Important Notice:

* As a first requirement for the provisional registration of vessels under Panamanian flag, the ISM Code is compulsory, for the following types of them:
1. Passenger vessels without tonnage limit.
2. High speed vessels (cargo or passenger vessels).
3. Bulk carriers of more than 500 gross tons.
4. Tankers of more than 500 gross tons.

* The vessels exempted for ISM Code are:
1. Battleships and troop carriers.
2. Cargo vessels under 500 GRT.
3. Vessels without self propulsion (engine).
4. Wooden ships of primitive construction.
5. Pleasure yachts, not engaged in commercial transport.
6. Fishing vessels.

The ISM Code consists of two documents:
a. Document of Compliance (DOC) issued to the operating company.
b. Safety Management Certificate (SMC) issued to the vessel.
These documents or certificates must be issued by any classification agency recognized by the Republic of Panama. See "Authorized Classification Agencies" at the Appendix.

* The International Ship & Port Security Code (ISPS Code) is also in force in Panama. The following ships are subject to this code:
1. Passenger ships, including fast speed passenger boats.
2. Cargo ships and fast speed ships of 500 gross tons and more.
3. Mobile drilling platforms or rigs.

They must have the following documents:

* A Ship's Security Plan, approved through the ship's class company.
* The International Ship´s Safety Certificate (ISSC).
* The Continuous Synopsis Record (CSR).

For registration of vessels in Panama coming from other registries, these documents issued by said registries will be accepted. Once registered under Panamanian flag, the ship must be furnished with these new ISPS documents, under Panama format. ( In the case of the ship's security plan, only a copy of the first and last pages will be needed for registration purposes ). Pleasure yachts carrying twelve (12) or more passengers will be subject to the ISPS Code.

The same applies to the ISM Code. A fax copy of the valid Document of Compliance (DOC) and of the Safety Management Certificate (SMC) will be sufficient for registration purposes. The DOC and SMC under the present registry are sufficient for provisional registration in Panama, but new ones, under Panamanian registry must be produced immediately after provisional registration.

Without copies of the ISM and ISPS Codes above listed, registration can not be obtained.

However, if the ship does not have ISM or ISPS documents under the current registry, we can obtain assignation of call letters and navigation patent number upon payment of the registration fees only. That way, the class company can produce interim SMC and DOC, ISSC and CSR under Panama flag.

Important Notice:

* For the registration of oil tankers, specially those built prior to July 6, 1993, of a deadweight equal or superior to 600 tons, and in compliance with rule 13 (F) of MARPOL 73 / 78, must provide the following additional documents:

1. Builder’s Certificate indicating the date of keel laying and the date of delivery.
2. Ships particulars, including the deadweight, signed on behalf of the ship’s operator.
3. Declaration concerning the type of cargo and its characteristics ( density at 15 degrees centigrade, cinematic viscosity at 50 degrees centigrade ). This document must be signed on behalf of the ship’s operator.
4. International Oil Pollution Prevention Certificate ( IOPP ) and its form B amended ( from previous or current registry ).
5. Class certificate.
6. Copy of the General Arrangement Plan, approved.
7. Copy of the Steel Plan, approved.
8. Copy of the Capacity Plan, approved.
This information should be provided in PDF format or CD duly identified, preferably.

Note: In case the vessel will not engage in the international trade or activities, the appointment of an authorized radio account agency will not be necessary. In this case, being a private communication, the following data must be furnished:
i) Area of operation of the vessel, which must be A 1 or A 2
ii) Frequencies to be used.
iii) Name and address of the base station with which the vessel will have communication.

The navigation areas are classified as:

A 1: Is the area within range of shore-based VHF stations ( 20 - 50 n miles ).
A 2: Is the area within range of shore-based MF stations ( 50 - 400 n miles ).
A 3: Is the area within geo-stationary satellite range ( Inmarsat / 70° N to 70° S ).
A 4: Is the area beyond Inmarsat range ( North of 70° N or South of 70° S ).

Following the registration proceeding, the vessel will be given a Provisional Navigation Patent (Patente Provisional de Navegación) valid for six (6) months and a Provisional Radio License (Licencia Provisional de Estación de Radio) valid for 3 months.

The issuance of both, Provisional Navigation Patent and Radio License can be made in Panama or at any authorized Panamanian Consulate, at the request of the client, according to his convenience. This registration procedure can be done in 24 hours.

B. Permanent Registration

Once the vessel has been provisionally registered under Panamanian flag, the client must send the final documentation to our office so we can obtain the regular or statutory Navigation Patent and Radio License, valid for 4 years. The required documents are:

1. International Ship Security Certificate (ISSC) / ISPS Code, issued under Panama format by a Recognized Security Organization (RSO).

2. Continuous Synopsis Record (CSR) / ISPS Code, issued under Panama format by a Recognized Security Organization (RSO).

3. Safety Management Certificate (SMC) / ISM Code, issued under Panama format by a Recognized Security Organization (RSO).

4. Document of Compliance (DOC) ) / ISM Code, issued under Panama format by a Recognized Security Organization (RSO).

5. Bill of sale and Acceptance of Sale.
The Bill of Sale and Acceptance of Sale have to be legalized by a Panamanian consul. In such legalization the Consul has to state not only the authenticity of the signatures but also that the persons signing it, have the power to act on behalf of the seller rand buyer, respectively. The above legalizations and statements of powers can be also made by any Notary Public, but at the end, the Notary´s signature must be legalized by a Panamanian Consul or with Apostille. A standard Bill of Sale (Body Corporate) may be used, but the aforementioned legalizations have to be obtained. Please see the Appendix for draft forms of Bill of Sale and these legalizations.

Note: If the vessel is registered under Panamanian flag without changing her ownership, that is, belonging to the same owner, then the Deletion Certificate of Previous Registry detailed hereunder, will serve as title of ownership and therefore no Bill of Sale will be required.

If it is a new built, a certificate from the builder will be required, showing the dimensions of the ship and certifying that the ship was built by order of the owner ( indicating its name ) and that the cost of same has been paid. An acceptance of sale by the owner / buyer will have to be attached too.

Any of the above documents must be legalized by a Panamanian consul or with Apostille, always indicating that the person signing the document is empowered to do so.

6. Power of attorney in favor of Vives y Asociados, legalized by a Panamanian Consulate or with Apostille. The Apostille is a standard legalization adopted at The Hague Convention of October 5, 1961.

7. Deletion Certificate from previous registry, duly legalized by a Panamanian Consulate or with Apostille.

8. International Tonnage Certificate
Final, not interim, under the new or current name of the vessel.

The tonnage certificate must be issued with the actual name of the vessel (or new name if applicable) and under the name of the actual owner (new owner if applicable). This tonnage certificate has to be a final one (not provisional) and must be issued by a classification entity recognized by the Republic of Panama, in accordance with the London Convention of 1969. Please see the list at the end of this brochure, in the Appendix.

9. Application for Statutory or regular Radio License
In a standard form which will be provided by our office. Complete description (including
trademark, model / type, radiated power, frequency range and emission) of all GMDSS equipments, INMARSAT, EPIRB, NAVTEX, GPS AIS (Automatic Identification System) and SSAS ( Ship Security Alert System) must be included.
Inmarsat equipments must be activated in Panama. You can do this through the Radio Account Entity.

Important Notice: If the vessel is 20 or more years old, she must be subject to an A.S.I. inspection which has to be requested to the Maritime Authority of Panama. The appointment of a recognized surveyor near to the ship’s location can be coordinated through our office.

The following documents should be sent by fax to my office in advance, in order to save time:
* Annual Safety Inspection (ASI) Report.
* Report on last dry dock entry inspection (not older than 2 1/2 years).
* Last Class Inspection report (if applicable).
* Last Record of Enhanced Program of Inspection on bulk carriers / oil tankers of more than 150 meters in length.
* In case of drilling rigs / platforms (MODU): MODU Safety Certificate, with last endorsement.
After complying with the steps above indicated, the vessel will be granted regular or statutory documents (navigation patent and radio license), valid for four (4) years.

III. REGISTRATION OF THE BILL OF SALE AT THE PUBLIC REGISTRY OFFICE
IN THE REPUBLIC OF PANAMA.

Once the Bill of Sale and Acceptance of Sale in due form have been received by our office, insertion of them in a notarial deed is made and said deed is brought to the Public Registry for registration. This proceeding is made by scanning the deed containing the Bill of Sale and Acceptance of Sale.

Only after the above registration is made and the rest of the documents mentioned in paragraphs II, B. ( 1, 2, 3 and 4 ) above have been received by our office, we can apply for the regular GMDSS Radio License valid for 4 years. For the obtention of the regular or statutory navigation patent, we will need the rest of the documents indicated in paragraph II, B. and regular
Note: A fine of US$ 500.00 will be imposed upon the vessel if the regular Patent of navigation is not obtained within the six (6) month validity period of the Provisional Patent.
Renewal of regular patents and licenses, after 4 years, is very easy and no further documents are required in normal conditions.

IV. EXPEDITION OF NEW STATUTORY OR REGLAMENTARY PATENT AND RADIO LICENSE DUE TO CHANGES IN THE VESSEL.

Any vessel registered under Panamanian flag has to apply for re-issuance of Navigation Patent and Radio License in all of the following cases:

a. Change of ownership
When the ownership of a Panamanian flag vessel is changed, the new Bill of Sale must comply with all the requirements of the first Bill of Sale, as described in II B. 1 and shown in the Appendix and must be recorded in the Public Registry Office through the same procedure as described in section III above.

b. Change of tonnage due to modification of the vessel´s structure.

c. Change of structure

d. Change of name of the vessel and/or name of the owner.

e. Change in any of the facts or data contained in the Navigation Patent or in the Radio License.

V. REGISTRATION OF FISHING VESSELS.

Prior to registration under Panamanian flag, fishing vessels have to obtain a license called "International Fishing License" from the Directorate General of Marine Resources of the Ministry of Commerce and Industries of Panama.

The application for the license must contain the following information: 1. The name, nationality and address of the ship owner. 2. Shall include copy of a Tonnage Certificate or of the title of ownership or of the navigation license and other documents that show the characteristics and specifications of the vessel (a fax copy of these documents shall be sufficient). 3. Detail of the marine species to be fished, the area of fishing, including the coordinates (degrees of latitude and longitude). 4. Detail of the fishing method and the characteristics of the handling and cleaning process and storage. 5. Names of the ports and areas of discharge.

The cost of the International Fishing Licenses is:
a. Vessels of up to 2,000 gross tons US$ 3.000.00
b. Vessels in excess of 2,000 gross tons " 5.000.00

International Fishing Licenses will be renewed every year, at the same cost, plus our fees and office expenses.

All fishing vessels must be subject of satellite tracking under the ARGOS system. Therefore they will have to keep a MAR GE device on board. The entity authorized to provide installation and service is CLS Collecte Localization Satellite; e-mail sylvle.mouquot@cls.fr; phone 33 (0) 561 394 724; fax 33 (0) 561 394 797; http//www.CLS.fr. It will be necessary to bring a copy of the Argos contract in order to obtain the International Fishing License.

VI. REGISTRATION OF PLEASURE YACHTS.

Pleasure yachts can be registered in Panama.
The cost of registration is US$ 1,500.00 if owned by a foreign person or corporation and US$ 1,000.00 if owned by a Panamanian person or corporation. Said amount is payable every two (2) years.
The registration proceeding is the same as with the other vessels. Provisional documents are issued upon registration. After the owner has provided the Bill of Sale and Acceptance of Sale, Deletion Certificate from previous registry, Tonnage Certificate (ITC 1969); Power of Attorney in favor of our law firm and application for radio station license (as indicated in II b. above) the authorities will issue the regular or statutory navigation patent and radio station license, for a period of two (2) years, renewable.

VII. SPECIAL THREE MONTH PERIOD REGISTRATION

The Panamanian legislation has established a special registration for a non-renewable period of three (3) months for vessels destined to be scrapped or for vessels to be delivered or any other reason for which a special temporary registration is needed.
The cost of a special three month period registration is calculated upon the basis of US$ 0.40 per net ton or fraction thereof, with a minimum fee of US$ 300.00.
If the vessel is going to be scrapped in Panama, the fee will be calculated at US$ 0.20. per net ton.
The documents needed for this kind of registration are:
1. Power of Attorney in favor of VIVES Y ASOCIADOS (legalized as previously explained).
2. Title of Ownership of the vessel or evidence of it, also legalized.
3. Deletion Certificate from previous registry, also legalized. This certificate can be brought later, within 30 days after the registration is done.
4. ISPS Code documents, if applicable.
5. ISM Code documents, if applicable.

VIII. SPECIAL DUAL REGISTRATION UNDER CHARTER PARTY

Vessels can be registered in two different jurisdictions, under charter party. A Panamanian registered vessel can be registered in any other country for a period of two (2) years, under charter party, without loosing her Panamanian registry status.
Also, vessels registered in other countries can be registered in Panama under charter party if their countries of origin so authorize. To that end, the following documents must be furnished:
1. Power of Attorney in favor of Vives y Asociados, granted by the Charterer, and legalized by a Panamanian Consul or with the Apostille legalization.
2. Original or legalized copy of the Charter Party. This document has to be authenticated by a Panamanian Consulate or with the Apostille legalization.
3. Consent of the vessel owner, legalized as above.
4. Consent of the Registry of origin, also legalized as above.
5. Copies of the ISM and ISPS documents of the ship under her current registry.

IX. DELETION OR CANCELLATION OF VESSELS FROM THE PANAMANIAN REGISTRY.

Vessels registered under Panamanian flag can be deleted from the Registry at any time, by the vessel owner, through the Resident Agent or Legal Representative of the vessel in Panama. In order to obtain said cancellation, the ship must be free of mortgages and liens or encumbrances and all duties, taxes and fees must have been paid.
There is a cancellation fee of US$ 1,000.00 payable to the Registry.
A "Consent of Cancellation" can be obtained from the Panamanian authorities (the OMM), in Panama or through a Panamanian Consulate abroad. This consent will last thirty (30) days and the deletion or cancellation must be requested within said thirty (30) days period.
A Deletion Certificate will be issued by the OMM.

X. TAXES AND FEES
The fees and taxes payable at the time of application for registration are:

REGISTRATION FEE
Vessels of up to 2,000 gross tons: US$ 500.00
Vessels in excess of 2,000 gross tons and
up to 5,000 gross tons: US$ 2,000.090
Vessels in excess of 5,000 gross tons
and up to 15,000 gross tons: US$ 3,000.00
Vessels in excess of 15,000 gross tons: US$ 3,000.00 plus US$ 0.10
per each additional gross ton
or fraction in excess of
15,000.00 gross tons up
to a maximum of US$ 6,500.00.
ANNUAL TAXES
a. Annual Tonnage Tax
Payable at the time of application for registration and annually thereafter, during the month of January, each calendar year, computed on the basis of US$ 0.10 per net ton or fraction thereof.
b. Annual Fee
Payable at the time of application for registration and annually thereafter, during the month of January, each calendar year, computed as follows:
1. In general, in the case of all vessels engaged in the maritime commerce, including passenger and cargo vessels, fishing vessels, dredges, drilling rigs, and tug boats:
Up to and including 1,000 gross tons: US$ 1,200.00
In excess of 1,000 gross tons and up to
and including 3,000 gross tons: US$ 1,800.00
In excess of 3,000 gross tons and up
to and including 5,000 gross tons: US$ 2,000.00
In excess of 5,000 gross tons and up to
and including 15,000 gross tons. US$ 2,700.00
In excess of 15,000 gross tons: US$ 3,000.00

2. In case of non-self propelled vessels and those vessels dedicated to scientific research or to other non-profit or non-commercial type of activities, including supply boats, research vessels and submarines, crew boats, exploration vessels and floating dry docks:
Up to and including 500 gross tons: US$ 850.00
In excess of 500 gross tons and up to and
including 1,000 gross tons: US$ 1,400.00
In excess of 1,000 gross tons: US$ 1,800.00

c. Inspection tax
Payable at the time of application for registration and annually thereafter during the month of January, each calendar year, computed as follows:
1. In case of passenger vessels:
Up to and including 1,600 gross tons: US$ 900.00
In excess of 1,600 gross tons: US$ 1,800.00
2. In the case of tankers and dry cargo
carriers:
Up to and including 500 gross tons: US$ 500.00
In excess of 500 gross tons and up to and
including 1,600 gross tons: US$ 750.00
In excess of 1,600 gross tons and up to
and including 5,000 gross tons: US$ 850.00
In excess of 5,000 gross tons and up to and
including 15,000 gross tons: US$ 1,000.00
In excess of 15,000 gross tons: US$ 1,200.00
3. In the case of drilling rigs: US$ 1,300.00
4. In the case of all other vessels:
Up to and including 500 gross tons: US$ 500.00
In excess of 500 gross tons and up to and
including 5,000 gross tons: US$ 800.00
In excess of 5,000 gross tons: US$ 1,000.00

d. Investigation of Accidents and Government Participation in International Treaties and Conference Tax.
Payable at the time of application for registration and annually thereafter, during the month of January each calendar year, computed as follows:

1. In the case of tankers, drilling rigs, passenger vessels, gas carriers and chemical transports: US$ 850.00 plus US$ 0.03 per net tons.
2. In the case of all other vessels:
Up to and including 500 gross tons: US$ 300.00 plus US$ 0.03 per net ton.
In excess of 500 gross tons and up to and including
10,000 gross tons: US$ 400.00 plus US$ 0.03 per net ton.
In excess of 10,00 gross tons: US$ 500.00 plus US$ 0.03 per net ton.
3. Pleasure yachts and all other vessels used for non-profit activities as well as non-self propelled vessels are exempted from payment of this fax.

SPECIAL DISCOUNT IN THE REGISTRATION FEE AND ANNUAL TAX FOR A FLEET OR GROUP OF VESSELS:

A group of three (3) or more vessels or fleet belonging to the same owner or economic group can request and obtain from the Panamanian authorities a discount in the registration fee, as follows:

1. Group of three (3 ) or more vessels representing from 30,000 to 50,000 gross tons, up to 20%.

2. Group of three (3 or more) vessels representing from 50,000 to 100,000 gross tons, up to 30%.
3. Group of three (3) or more vessels representing more than 100,000 gross tons, up to 50%.

Also, one single vessel of more than 100,000 gross tons may obtain a 50% reduction in the registration fee.

A group of four (4) or more newly built ships representing together at from 50,000 to 100,000 gross tons, can receive a 25% reduction in the "annual tax" and a 50% reduction in the “annual fee” for a period of four (4) years, provided that the ship owner keeps the fleet under Panamanian flag for at least said period of time. If the tonnage represented by the fleet is of more than 100,000 gross tons, the reduction in the “annual tax” will be of 35%.

The Panamanian authorities may also recognize the registration fees paid in other jurisdictions by a group of vessels representing more than 100,000 gross tons, during the current Panamanian fiscal period, for registration under Panamanian flag. These registration fees would be applied to the enrollment, provided that said group of vessels guarantee its permanence under the Panamanian flag for at least four (4) years.

Special periods for partial payment of taxes can be also arranged by groups of at least fifteen (15) vessels representing more than 500,000 gross tons.

OTHER TAXES AND FEES

Various taxes in connection with the amendment of the navigation patent and other administrative acts.
Change of name and/or ownership of the vessel: US$ 1,000.00
Change of tonnage due to structural
changes or adoption of rules provided by
the new Convention on Tonnages: US$ 1,000.00
Change of company in charge of radio account: US$ 500.00
Deletion from Panamanian Registry: US$ 1,000.00
Issuance of Regular Patent due
to its loss or renewal: US$ 300.00
Issuance of Regular Radio License due to its
loss or renewal: US$ 200.00
Reservation of the name of a vessel for
thirty (30) days: US$ 20.00
Registration of charter parties: US$ 150.00 plus US$ 0.20 per ton or fraction thereof.
Renewal of Provisional Patent: US$ 50.00 per month
Renewal of the Provisional Radio
License for three (3) months. US$ 150.00

REGISTRATION OF SHIP MORTGAGES

Ship mortgages upon Panamanian flag vessels are subject to registration at the Ships´ Section of the Public Registry Office of the Republic of Panama.

Registration of a mortgage can be made "preliminary" as a first step and then "permanently", or directly registered in the "permanent" form.

1. PRELIMINARY REGISTRATION OF SHIP MORTGAGES.
Closing of sales and mortgages are made at Panamanian consulates abroad very often and in order to secure the mortgage and property of the vessel, a preliminary registration of Bill of Sale and mortgage is done through said consulates, by filling a Preliminary Registration Form which the consulate sends by fax to the Public Registry Office in Panama, for registration. This process is completed in only hours.
Preliminary registrations last for six (6) months, from the date of registration. Within that period of time, the permanent registration must be executed through a lawyer or law firm in Panama.

2. PERMANENT REGISTRATION OF SHIP MORTGAGES

Permanent registration of a mortgage can be made at any time, after the execution of it, or within six (6) months, following the preliminary registration.

Mortgages can be executed in any language, must be in writing and either in public or private document.

The document of ship mortgage must contain the following information:

a. Complete names and addresses of both, mortgagor and mortgagee.
b. The maximum amount of credit secured thereby.
c. Interest rate or the way of calculating it.
d. Maturity dates of principal and interests or the way of calculating them, unless the mortgage has been executed to secure credits exigible on demand or upon future or suspenseful conditions.
e. Name of vessel, call sign, navigation patent number, dimensions and tonnage.
If the vessel is under construction, she must be registered in the Public Registry first, and one third (1/3) of the total cost of her hull must have been invested.
f. When several vessels are mortgaged to secure a single credit, the amount or part of the lien secured by each vessel can be determined. In the absence of such determination, the mortgagee may claim restitution against any or all of them for the total amount secured.

IMPORTANT NOTICE:

a. Legalization of mortgage deed.

The deed containing the mortgage has to be signed by both, the mortgagor and mortgagee. Then, the signatures of both parties have to be legalized by a Panamanian consul. In such legalizations, the consul has to state not only the authenticity of the signatures but also that the persons signing it, have the power to act on behalf of the mortgagor and mortgagee, respectively. These legalizations and statements of powers can also be made by any Notary Public but at the end, the Notary's signature must be legalized by a Panamanian consul or with Apostille.

b. If the mortgagor and/or the mortgagee is a Panamanian registered corporation, it must be in good standing. Copy of the annual franchise tax receipt is required for registration.

c. The registration of a mortgage can not be made if the Bill of Sale or title of ownership is not previously registered. Both, Bill of Sale and mortgage can be registered simultaneously, that is together, at the same time.

d. Loan Agreement: Registration of the loan agreement along with the mortgage is optional. If the mortgage contains all the information required in paragraph 2 above, then registration of the loan agreement is not necessary. Despite this, some mortgagees prefer to have the loan agreement also registered.

3. COST OF REGISTRATION OF MORTGAGE

The registration fees payable to the National Treasury of Panama depend on the vessel's net tonnage. It is: US$ 0.12 (12 cents U.S. dollar) per net ton up to a maximum fee of US$ 600.00 (US$ SIX HUNDRED).

The fees for a preliminary registration of a mortgage will be: US$ 450.00 for the first two million dollars (US$ 2,000,000) of the amount of the mortgage plus US$ 150.00 for each extra million with a maximum registration fee of US$ 1,200.00.

The cost of registration of a mortgage also involves translation fees, notary fees, and office expenses and fees, which depend on the length of the document of mortgage.

CANCELLATION OF SHIP MORTGAGES

Ship mortgages can be discharged or cancelled by registering a deed or document of release of mortgage, issued by the mortgagee.

The deed of discharge has to be signed by the mortgagee or its representative and legalization of the signature must be made, stating not only the authenticity of the signature, but also that the signor has power to act on behalf of the mortgagee. This legalization can be made either by a panamanian consul or by a Notary Public with his signature then legalized with Apostille.

After the above steps are completed, the document of discharge has to be sent to a lawyer or law firm in Panama, for registration. After this, the vessel will be considered free of mortgages.

Ship mortgages can also be preliminary cancelled at the Panamanian Merchant Marine Consulates and said registration will last for six (6) month, during which period the final registration of the cancellation of mortgage must be effected.

APPENDIX

BILL OF SALE AND ACCEPTANCE OF SALE

Name of Ship: Patent number: Call sign: Port of Registry: Whether sailing, steam or motor ship: Horse power of engines: Length (in meters): Breadth (in meters): Depth (in meters): Gross tonnage: Registered or Net tonnage: and as described in more detail in the Certificate of the Surveyor and in the Register Book.
We (hereinafter called "the Transferors"), having our principal place of business in , in consideration of the sum of $ , paid to us by (hereinafter called "the Transferee(s)", the receipt whereof is hereby acknowledged, transfer all shares in the ship above particularly described, and in her boats and appurtenances, to the said Transferee(s). --- Further, we, the said Transferors, for ourselves and our successors covenant with the said Transferee(s) and their assigns, that we have power to transfer in the manner aforesaid, the premises hereinbefore expressed to be transferred, and that the same are free from all encumbrances, mortgages, maritime liens and any other deals whatsoever. --- In witness whereof we have hereunto affixed our common seal on this day of , of the year . -------------

Signed by , in his capacity as of the Transferors.

NOTARIAL CERTIFICATE OF THE BILL OF SALE: The undersigned, , acting in my capacity of Notary Public, duly authorized and sworn, practicing in , hereby CERTIFY that:
1. The signature of , appearing in the Bill of Sale, is the authentic signature of the said . 2. Sufficient proof has been produced to me that: (a) The Transferors were immediately prior to the execution of the said Bill of Sale the owners of the vessel therein referred to and had the right to sell and transfer her. (b) The above mentioned signatory had power to execute the Bill of Sale on behalf of the Transferors in the manner aforesaid.
IN TESTIMONY whereof I have hereunto subscribed my name and affixed my seal of office this day of of the year .

Notary's signature:

Legalization with Apostille:

ACCEPTANCE OF SALE: The undersigned , acting on behalf of and representing (the Transferee) in the Bill of Sale above, and in my capacity as HEREBY ACCEPT for all legal purposes, the sale and transfer effected by the Transferors to the Transferee in the said Bill of Sale.
NOTARIAL CERTIFICATE OF ACCEPTANCE OF SALE: The undersigned, , acting in my capacity of Notary Public, duly authorized and sworn, practicing in , hereby CERTIFY that , whose identity was proven to me, signed the foregoing document of Acceptance of Sale and that according to evidence presented to me, which I deem valid, is entitled to sign on behalf of the said Transferee.
IN TESTIMONY whereof I have hereunto subscribed my name and affixed my seal of office this day of of the year .

Notary's signature:

Legalization with Apostille or by a Panamanian Consul:

DISCHARGE OF MORTGAGE

DISCHARGE OF MORTGAGE

The undersigned (the Mortgagee), hereby discharge and release a ship mortgage dated and granted by (the Mortgagor), upon the vessel , and which was recorded at the Public Registry Office of the Republic of Panama at micro jacket , film , frame , on .

The law firm of Messrs. VIVES Y ASOCIADOS, of Panama City, Republic of Panama are hereby authorized and empowered to obtain the registration of this document at the Public Registry of the Republic of Panama.

For and on behalf of the Mortgagee

Attorney-in-Fact

(Notary’s legalization or authentication by a Panamanian Consulate must follow.)

(If a notary’s legalization is made, then authentication by the Panamanian Consulate or legalization with "Apostille" must follow.

IMPORTANT NOTICE: The legalization must certify not only the authenticity of the signature of the person signing of behalf of the mortgagee, but also that said person is authorized and empowered to execute said document on behalf of it.

AUTHORIZED CLASSIFICATION AGENCIES
( For issuing technical certificates as well as ISPS and ISM audits and documents )

1. AMERICAN BUREAU OF SHIPPING (ABS)

2. BUREAU VERITAS (BV)

3. CHINA CLASSIFICATION SOCIETY (CCS)

4. CHINA CORPORATION REGISTER OF SHIPPING (CRS)

5. DET NORSKE VERITAS (DNV)

6. GERMANISHCER LLOYD (GL)

7. HELLENIC REGISTER OF SHIPPING (HRS)

8. HORIZON INTERNATIONAL OF NAVAL SURVEYING AND INSPECTION BUREAU S.A.

9. INTERNATIONAL REGISTER OF SHIPPING (PANAMA) INC.

10. ISTHMUS BUREAU OF SHIPPING (IBS)

11. KOREAN REGISTER OF SHIPPING (KRS)

12. LLOYD'S REGISTER OF SHIPPING (LRS)

13. NATIONAL SHIPPING ADJUSTERS, INC.

14. NIPPON KAIJI KYOKAI (NKK)

15. PANAMA BUREAU OF SHIPPING (PBS)

16. PANAMA MARITIME SURVEYOR BUREAU INC.

17. PANAMA REGISTER CORPORATION

18. PANAMA MARINE SURVEY & CERTIFICATION SERVICES, INC.

19. PANAMA MARITIME DOCUMENTATION SERVICES INC.

20. PANAMA SHIPPING REGISTRAR INC.

21. POLSKI REJESTR STATKOW

22. REGISTRO ITALIANO NAVALE (RINA)

23. RINAVE – REGISTRO INTERNACIONAL NAVAL, S.A.

24. MACOSNAR CORPORATION

25. RUSSIAN MARITIME REGISTER OF SHIPPING

26. UNIVERSAL SHIPPING BUREAU INC.

27. OVERSEAS MARINE CERTIFICATION SERVICE, INC.

28. CENTRAL BUREAU SHIPPING (PANAMA) S.A.

AUTHORIZED RADIO ACCOUNT AGENCIES

1. (PG01) PANA-GLOBAL TRADING, S.A.
1 Marine Parade Central HEX 03-02
Parkway Builders Centre,
Singapore 1544, Singapore
Tel. (507) 264-4984. Fax: 263-9918
Tlx. 2604 Pan Glo

2. (PG02) PANAMA SHIPPING CONSULTANTS, INC.
22nd floor, Shum tower,
268, Des Voeux Road Central,
Hong Kong
Tel. (00852) 25-438848
Tlx. 75438. Fax: (00852) 28153275
E-mail: shipreg@netvigator.com

3. (PG03) MARITIME SATELLITE COMMUNICATIONS, INC.
(MARSATCO)
P.O. Box 4340, Zone5
Panamá, Rep. de Panamá
Tel. (507) 213-2265 / 66
Fax. (507) 213-2264
E-mail: isbshipa@cwpanama.net

4. (PG04) INTER-MAR RADIO, INC.
P.O. Box 2095, Balboa, Ancón,República de Panamá
Tel. (507) 269-5834, 269-5097
Fax. (507) 269-4606, 269-5679
Tlx. 2515 "ANCHOR PG"
E-mail: amchor@panamet.com

5. (PG05) INTERNATIONAL MARITIME COMMUNICATIONS CO.
(I.M.C.O.)
Ave. Justo Arosemena y Calle 32 Este
No. 3-32 Edificio Padilla y Asociados
Apdo. Postal 8301, Panamá 7, Panamá
Tel. 227-1082, 227-2483, 227-2068
Tlx. 2799/2506, Fax: 227-1146
E-mail: imco@sinfo.net

6. (PG06) SHIPPING RADIO AND MANAGEMENT INTERNATIONAL INC.
Edificio Comosa, Piso 1
P.O. Box 6-4298, Estafeta El Dorado,
Panamá, Rep. de Panamá
Tel. (507) 264-7504/269-3517
Fax: (507) 269-3510
E-mail: info@shippingradio.com

7. (PG07) RADIOTEL INC.
Edificio Eastern, Piso 12
Avenida Federico Boyd
Apdo. Postal 7283, Zona 5
Panamá, Rep. de Panamá
Tel. 263-8555/8493. Tlx. 2725/2562
Fax: 263-8051

8. (PG08) OFFSHORE SATELLITE INTERNATIONAL (O.S.I.) S.A.
Edificio Comosa, Pisto 4to.
Samuel Lewis
Panamá 9, Panamá
Tel.: (507) 263 4670
Fax: (507) 263-4667
E-mail: Osipty@sinfo.net

9. (PG09) PANAMA MARINE COMPANY INC.
c/o 50, Robinson Road # 11-02
MNB Building, Singapore 068882,
Tel.: (0065) 32 31 336. Fax: (0065) 32 31 063

10. (PG10) CABLE & WIRELESS PANAMA, S.A.
Gerencia de Corresponsalía y Relaciones Internacionales.
Apartado Postal 659, Panamá 9A, Panamá
Tel. (507) 223-5131. Fax: (507) 264-2436

11. (PG11) LANDER WORLD CORPORATION, INC.
Edificio Torre Banco Germánico, Piso 9
Calle 50, Panamá
Apartado Postal 8376, Zona 7, Panamá
Tel. (507) 269-3555

12. (PG12) ISTHMIAN REGISTER BUREAU, INC.
Edifico Banco Exterior
Piso 12, Calle Colombia y Calle 43,
Bella Vista, Panamá
Tel. (507) 227-7791 / 7792
Fax. (507) 227-7793

13. (PG13) INTERNATIONAL REGISTRIES & DOCUMENTATION INC.
Room 1606, Bonham Trade Centre,
50 Bonham Strand East, Hong Kong
Tel. (00852) 281 56341
Fax. (00852) 28156392

14. (PG14) MARINE ELECTRONICS AND SERVICES
INVESTMENT CORPORATION
Willianson Place Bldg. 0750 A
La Boca, Balboa, Ancón
República de Panamá
Tel. (507) 211-2883 / 84 / 85
Fax. (507) 211-2886
E-mail: marinele@sinfo.net

15. (PG15) SATLINK PANAMA INC.
Avenida Samuel Lewis, Edificio HSBC, Sexto Piso,
Panamá, República de Panamá
Tel. (507) 264 - 8044
Fax (507) 264 - 7887

16. (AA01) AWA ECTRONIC SERVICES
25/192A Kingsgrove Road
Kingsgrove NSW 2208 (Australia)
P.O. Box 94 Kingsgrove NSW 2208
Tel. 0061 2 554-9344. Tlx. AA 24493
Fax: 0061 2 554-9599

17. (BE02) MARLINK S.A.
Av. Guillaume Henrickx, 80
B-1180 Brussels, Belgium
Phone + 32 -2- 371 7111
|Head of Operations: Rinus Bauer rinus.bauer@marlink.com

18. (BN01) BATELCO
P.O. Box 14, Manama, Bahrain
Tel. Office: 00973 883546
Fax. 00973 242676 / Tlx. 8221 Bahrad BN
E-mail: ISM@go.com.jo

19. (CYP03) TELACCOUNT OVERSEAS LTD.
P.O. Box 127, CY- 3601, Limassol, Cyprus
Tel. 00357 5-365264.
Tlx. 3282
Fax: 00357 5- 348361

20. (DP02) DEBEG GMBH
Funkverkehrsabrechnung,
Behringstrabe 120 D-2000 Hamburg 50,
Postfach 50 03 29, Alemania
Tel.: 0049 40 8825 / 6. Tlx. 211925
Fax: 0049 40 8825 – 4199

21. (DP03) DETEMOBIL DEUTSCHE TELEKOM MOBILNET GmbH (T-Mobil)
POSTFACH 300463, 53184 Boon, Alemania
Tel. 0049 228 9367 777
Fax.: 0049 228 9366 539

22. (GB05) ANDtelco
Tanners Bank, North Shields,
Tyne & Wear NE30 1JH
United Kingdom

23. (GB06) PENINSULAR ELECTRONICS, LTD.
Broadway House, Orpen Park
Ash Ridge Road, Almonsbury,
Bristol BS12 4QD. (England)
Tel.: 0044 1454 201777. Tlx. 44162 Pelect G
Fax: 0044 1454 205201
0044 1454 617310

24. (GB08) SELENIA COMMUNICATIONS LIMITED
Marconi House, New Street, Chelmsford
CM1 1PL (England)
Tel.: 0044 1245 353221
Tlx.: 99228. Fax: 0044 1245 358776
E-mail: nigel.bond@marconicomms.com

25. (GB11) NERA SATELLITE SERVICES LIMITED
6 Wells Place, Gatton Park
Business Centre, Redhill RH1 3DR, England
Tel. 0044 173 7648 800. Tlx. 946384
Fax: 0044 173 7648 888

26. (GK12) ANDGATE INTERNATIONAL LIMITED
P.O. Box 399, Suite 52, Victoria House,
26 Main Street, Gibraltar
Tel. 76761/78880. Tlx. 2310
Fax: 00350 73888
E-mail: Debbbie.attwell@A-N-D.co.uk

27. (GR01) HELLENIC TELECOMMUNICATION ORGANIZATION, S.A. (O.T.E.)
99 Kifisias Ave., GR 151 81 Maroussi
Athens, Greece
Tel. 0030 1 422-7555-9. Tlx. 241028
Fax: 0030 1 413-2699 / 422 6099.
E-mail: gr01@otenet.gr

28. (GR12) PIRAEUS MARITIME TELECOMMUNICATIONS SERVICES, S.A.
(MARITEL)
185 45 Piraeus, Greece
Tel. 00301 45 995 00
Fax. 0030 1 45 996 00
E-mail: maritel@maritel.gr

29. (HO01) HONDURAS RADIO ACCOUNTING SERVICES, S.A.
Edif. Padilla, Urbanización Aeropuerto
Bloque J, No. 15, Carretera al Batallón
Tegucigalpa, M.D.C., Honduras
Tel. 04-34-3930/3931. Tlx. 1306 HMB HO
Fax: 04-34-3933

30. (HX05) OCEAN TRAMPING COMPANY, LTD.
51/FL Cosco Tower
183 Queen s Road Central,
Hong Kong
Tel.: 00852 2589088
Fax: 00852 28575584
E-mail: chingyw@coscochs.com.hk

31. (HX08) MARINE RADIO SYSTEMS, LTD.
6th Floor, Henan Electric Development Building
389 King´s Road, North Point, Hong Kong
Tel.: 00852 25786289. Tlx. 66338
Fax: 00852 28879144

32. (IA14) P.T. ADMIRAL LINES
79-80 Jalan Gunung Sahari
Jakarta 10610
P.O. Box 1476, Jakarta 10014
Indonesia
Tel. 0062 21 42/47908. Tlx. 49122/49297
Fax: 0062 21 42 06267/4245751/4202764

33. (IU02) TELECOM ITALIA S.p.A.
Piazzale Giulio Douhet 25
00143, Roma, Italia
Tel.: 0039 6 5921970. Tlx. 610293/616423
Fax: 0039 6 591 0026

34. (IU03) COMPAGNIA GENERALE TELEMAR
Viale Tiziano 19, 00196,
Roma, Italia
Tel.: 0039 06 322 1800. Tlx. 611663
Fax: 0039 06 324 0148

35. (JP02) JAPAN RADIO CO., LTD.
Akasaka Twin Tower (Main) 17-22,
Akasaka 2-Chome, Minato-Ku
Tokyo 107, Japan
Tel.: 0081 3 3584 8793. Tlx. 242 5420
Fax: 0081 3 3584 8796
E-mail: j02345@mljre.co.ip

36. (JP03) KYORITSU RADIO SERVICE CO., LTD.
2-6, Kanda-Izumicho, Chiyoda-Ku
Tokyo 101, Japan
Tel.: 0081 3 5687 0481. Tlx. 246-6239
Fax: 0081 3 5687 0388
E.mail: kyoristu@blue.ocn.ne.ip

37. (JP04) B.S. JAPAN CO., LTD.
3-8, Nihonbashi 1-Chome
Chuo-Ward, Tokyo 103-0027, Japan
Tel.: 0081 3 3281-5261. Tlx. 252-2084
Fax: 0081 3 3281-5263
E-mail: bsjapan@sepia.ocn.ne.ip

38. (JP05) MOCOS JAPAN CO. LTD.
Yusen Bldg. 208-B, 3-9 Kaigandori
Naka-Ku, Yokohama 231,-0002 Japan
Tel.: 0081 45 671 8301/8302
Tlx. J 47715. Fax: 0081 45 671 8303
E-mail: mocos@msf.biglobe.ne.ip

39. (NL02) RADIO HOLLAND B.V.
Postbus 9094, 1006, AB
Amsterdam, Holland
Tel: +31 (020) 101972 Tlx.: 13166
Fax: + 31 10 4281498

40. (RS27) SHIPPING ASSISTANCE PTE. LTD.
P.O. Box 729, Marine Parade Road
Singapore 449408
Tlx. 359 68. Fax: 0065 783 3858
Tel.: (0065) 783 7040/1

41. (US02) MACKAY COMMUNICATIONS, INC.
P.O. Box 58649
Raleigh, NC 27658 (U.S.A.)
Tel.: 001 919 850 3039
Tlx. 4612018. Fax: 001 919 954 1707
E-mail: tia.epps@mackaycomm.com

42. (US03) RADIO HOLLAND U.S.A., INC.
8943 Gulf Freeway
Houston, Texas 77017
U.S.A.
Tel.: + 1 713 943 3325
Fax : + 1 713 946 0403
E-mail: rhcomms@ix.netcom.com

43. (YU02) USTANOVA ZA ODRZAVANJE POMORSKIH PLOVNIH PUTOVA, (PLOVPUT)
Obala Lazareta 1, 58000 Split
Croatia
Tel. 058 45-877. Tlx. 26176
Fax: (038) 58 585 782

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