US FMC Investigates Chinese Detentions of Panama Ships

The U.S. Federal Maritime Commission announced on Thursday that it is investigating a sharp increase in detentions of Panama-flagged vessels at Chinese ports, actions that appear linked to Panama's recent annulment of long-standing port operating contracts held by a Hong Kong-based company. The detentions, which have exceeded historical norms, involve nearly 70 ships since March 8 and could disrupt global shipping routes critical to U.S. trade.

Panama's Supreme Court ruled in late January to invalidate the 1997 concessions granted to Panama Ports Company, a subsidiary of CK Hutchison Holdings, for operating the Balboa and Cristóbal container terminals at the Pacific and Atlantic entrances to the Panama Canal. The facilities handle up to 40 percent of the canal's traffic, which accounts for about 5 percent of global maritime trade. The court found the contracts unconstitutional following investigations that identified financial irregularities, including damages estimated at around $1.2 billion to the Panamanian state and violations of national rights in the agreements.

The ruling took effect in February, prompting the Panamanian government under President José Raúl Mulino to...