Weekly Report - 22 July 2003

Panama's merchant navy (a huge flag-of-convenience fleet) could well disappear as a result of pressure from the OECD to impose income tax on commercial activities by ships flying the Panamanian flag, regardless of where these activities are carried out. 

The dire prediction was made by the newspaper El Panamá América, which says that this would do away with the incentive to register ships in Panama. 

It notes that more than 10,000 ships currently fly the Panamanian flag, and contribute about US$80m annually to the economy.