China detaining Panama-flagged ships amid battle over port control, FMC says
By Lisa Baertlein
LOS ANGELES, March 26 (Reuters) - The U.S. Federal Maritime Commission (FMC) said on Thursday it is closely monitoring a surge in detentions of Panama-flagged vessels in China that appears tied to a Panama court ruling against Hong Kong-based CK Hutchison.
Panama's Supreme Court in late January invalidated the legal framework supporting the 1997 concession granting CK Hutchison's 0001.HK Panama Ports Company the right to operate the Balboa and Cristobal terminals on the Pacific and Atlantic sides of the Panama Canal.
China has said it firmly opposes the ruling against Hutchison's port concessions, calling it an "act of bad faith".
Following the ruling, the Panamanian government appointed U.S. subsidiaries Maersk APM Terminals and Mediterranean Shipping Company's (MSC) Terminal Investment Limited as interim operators under 18-month agreements.
The cancellation followed mounting U.S. pressure to curb Chinese influence around the strategic canal, which handles about 5% of global maritime trade.
Commissioner Laura DiBella, chair of the FMC, said China's detentions of Panama-registered ships far exceeded historical norms. The number had reached nearly 70 since March 8, according to a Lloyd's List Intelligence report.
"These intensified inspections were carried out under informal directives and appear intended to punish Panama after the transfer of Hutchison's port assets," DiBella said in a statement.
"Given that Panama-flagged ships carry a meaningful share of U.S. containerized trade, these actions could result in significant commercial and strategic consequences to U.S. shipping," she said, adding that FMC is legally empowered to investigate whether regulations or practices of foreign governments could harm U.S. trade.
In a parallel move, the Chinese Ministry of Transport had summoned Maersk MAERSKb.CO and MSC to Beijing for high‑level discussions, DiBella said. The ministry did not reveal details.
"The repeated irresponsible remarks from the U.S. only expose its own plot to forcibly take control of the canal," the Chinese foreign ministry spokesperson Lin Jian said about the U.S. statement at a regular news briefing on Friday.
China's Ministry of Transport did not immediately respond to a separate request for comment by Reuters.
CK Hutchison, which operated the ports for nearly 30 years, has strongly rejected the Panama court ruling, accused Panamanian authorities of unlawfully seizing property, and launched an international arbitration case against Panama, claiming damages of more than $2 billion.
The dispute has also complicated CK Hutchison's planned $23 billion sale of a majority stake in its global ports business to a consortium led by BlackRock and MSC.
