Palau's government has ended a longtime commercial arrangement with its flag registry operator, according to the Island Times. The change follows several U.S. Treasury sanctions actions affecting the Palau-flagged fleet, and brings the register a chance for a fresh start.
In a statement Saturday, Palau's Ministry of Public Infrastructure and Industries confirmed that the Palau flag registry continues to provide all shipping registry services as before, but under new management. It emphasized its "commitment to strengthening governance and oversight, whilst maintaining continuity, experience, and confidence in the registry’s operations." It noted that the change should in no way reflect on the registry operator's former CEO.
“Our priority is to ensure continuity of service and the effective administration of the Palau Flag,” said Hayes Moses, director of the Palau Bureau of Marine Transportation. “All registry services continue to be delivered in accordance with established procedures and international standards.”
The Piraeus-based management firm began marketing and operating Palau's flag registry in 2012. This arrangement is not unusual: privatized management is common among open-register flag states. However, according to the Island Times, Palau's government developed concerns about some of the vessels that had made arrangements for the use of the Palau flag.
Vessels of concern may have included the tankers Iris, Mahadev, and Elke, allegedly part of Iran's Hossein Shamkhani network and recently listed by the U.S. Treasury. 14 other Iran-linked vessels with Palau flagging were listed by the Treasury in December. In addition, the LNG carriers Asya Energy, Everest Energy and Pioneer were listed by the Treasury in 2024 in connection with sanctions on Russia.
Palau's concerns are reported to have extended beyond sanctions. In 2024, under previous management, Palau's flag ranked second on the ITF's global list of seafarer-abandonment incidents - situations in which the owner ceases to pay wages to the crew or to provide basic supplies. In June 2025, Palau President Surangel Whipps said that he had not been aware of the abandonment cases.
"I didn't know about the issue [of seafarer abandonment]," Whipps told Thompson Reuters' Context. "We’ve got to clean that up. That's not good."
Going forward, newly-enacted amendments to Palau's Maritime and Admiralty Act will allow its government to "ensure a gradual and orderly transition" for its shipping register, its Ministry of Public Infrastructure and Industries (MPII) said in a statement. The amendments include new authority for Palau's president to appoint a contracted manager for the registry.
