China’s growing foothold on the Panama Canal appears to promote its own commercial interests as well as helping American enemies engage in court documents obtained by the Daily Caller News Foundation Show.

China has expanded its presence on the Panama Canal significantly since former President Jimmy Carter sold its ship lane to Panama for $1 in 1977, and has built its foothold by purchasing the port while funding billions of dollars infrastructure projects in the surrounding countryside. It also benefited American enemies like Iran.

Panama court documents obtained by the DCNF show that Iran tried to use a proxy company based in Hong Kong, China, to register ships on the Panama Canal and charter ships.

“Given the presence of Chinese companies in port operations and infrastructure near the canal, US authorities are concerned about Beijing seeking commercial or strategic leverage in the region,” Dr Umud Shokli, a senior visiting fellow at George Mason University with foreign policy expertise, told DCNF. “The Trump administration’s efforts to regain influence over the canal reflect the view of Washington’s waterways as a broader national security asset.”

The document focuses on a variety of cases, including three cases, including three Hong Kong-based shipping companies (Grace Transport, Expander Transport and Magnificent Shipping), all accused of being a subsidiary of Tehran-based Iranian Shipment Line (IRISL), owned by the Iranian government.

Irisl was like that Authorization Under the first Trump administration, the State Department described the company as “a priority transport line for Iranian proliferators and procurement agents.” The EU has become more detailed than the Panama courts. The EU Council said it was accused of being charged with security, defense and oversight of diplomacy. For many years, IRISL has been “involved in the shipping of military-related cargo,” while the Islamic Revolutionary Guard Navy (IRGCN) has said that “converts IRISL-owned container ships into drone carriers.”

Iran has been operating secretly on the Panama Canal for many years as the Latin American country is considered the world’s largest supplier of “convenience flag.” According to To Reuters. Panama took the privilege of using flags from only 136 ships over links to Tehran in 2023.

In 2018, the Hong Kong-based company was trying to sell three separate medium-range tanker vessels through a contract known as a bareboat charter to a Greek-based shipping company. However, President Donald Trump announced sanctions against Iran that same year, effectively killing the contract and forcing Iran-backed businesses to sell the ships entirely to avoid penalties. (Related: Trump reports to instruct the military to develop a plan to increase the presence of the Panama Canal Army)

The Greek company continued to use unobstructed ships for two years after sale in 2018. However, in 2020, the Hong Kong company filed a lawsuit in a Panama court, retrieving the ship from the management of the Greek company that acquired the ship, claiming that the initial sale was invalid.

A Panama court ordered Greek companies to return two vessels each to the most spectacular and expander transport, according to legal documents, or to repay a multi-million dollar valuation of the vessel to the plaintiff. Cases that include Grace Shipping have not yet been resolved.

Currently, the company has denied its relationship with IRISL, but has yet to disclose the nature of the sale, which is assumed to be a third party sold. According to court documents, the only people who appeared as witnesses in corporate cases are Iranians associated with IRISL.

The Hong Kong-based company is represented by Arias B. & Associates of Panama, court documents show.

China’s presence in the Panama Canal allowed Iran to take over its operations in the Western Hemisphere just below the US’s nose

“China has been embarrassed and in fact made it possible for us to adhere to our efforts to stop Iran’s illegal activities,” Rebecca L. Heinrichs, Senior Fellow and Director of the Keystone Defense Initiative at the Hudson Institute, told DCNF. “China is one of the most effective enablers of Iran’s ability to avoid US sanctions.”

The US’s ability to cut China-based front companies is part of America’s willingness to potentially strain US-China business relations, Heinrich told DCNF.

“So some of this is just implementing sanctions, finding front companies that are pop-up and not giving China any plausible negativity,” Heinrichs told DCNF. “This is approved by all [Chinese Communist Party]. ”

Iran has been moving for a long time to avoid Western sanctions, particularly in the oil trade.

President Donald Trump approved “Iranian minister Mohsen Paknejad on Thursday that “allowed billions of dollars worth of Iranian oil to export and allocated billions of dollars of oil to Iranian troops for export.” According to To the Ministry of Finance. The Iranian government operates the so-called “shadow fleet” that exports primarily to Beijing.

The entire shadow market of Iranian oil has emerged with the help of China and Russia. Both Beijing and Moscow have taken steps to obfuscate the origins of oil, According to To the Atlantic Council.

“I think we need to be very serious about Iran’s sanctions,” Michael Singh, managing director and senior fellow Laneswig at the Washington Institute, told DCNF. “But taking seriously Iran’s sanctions doesn’t mean listing more entities and more boats. I’m the former Treasury Secretary. I stand by that. Can I do that without enforcement? That’s pointless.”

Panama is pleased to respond to China in expanding the maritime power.

China’s Landbridge Group acquired Margarita Island, Panama’s largest Atlantic port, for $900 million in 2016. Myriad A developing country.

BRI has been criticized for often giving target countries excessive leverage with debts known as “debt trap diplomacy.” According to To the Diplomatic Council.

Panama Officially He participated in the Belt and Road Initiative in 2017.

Additionally, Panama has made a 25-year non-bid renewal for Hong Kong-based Hutchison Port, operating two ports at both ends of the canal that covers both the Atlantic and Pacific Oceans. However, American investment giant BlackRock agreed purchase On March 5th, the Chinese-based port was $22.8 billion.

US officials and lawmakers, etc. Republican Party Texas Sen. Ted Cruz and Republican Utah Sen. John Curtis collected Criticism Especially at the Panama Canal Bureau, where it is said that it has not done enough to enforce sanctions against China. The Panama Canal Bureau was thrust back to the charges, saying it was “not a heaven for avoiding sanctions.”

“The US has discovered that Iranian vessels are sometimes flagged by Panama to avoid sanctions. I said At a Senate Commerce Committee hearing in January.

Cruz also reflected emotions at the Commerce Commission hearing, saying the US cannot “imidal” while China is gaining its footing.

“China has always been firmly opposed to illegal and unjust unilateral sanctions and the so-called long-term jurisdiction of the United States. The international community, including China, has been working normally with Iran within the framework of international law.” “This is reasonable, legal, and deserves respect and protection without harming any third parties.”

“All of these are primarily about controlling ocean lanes,” Heinrichs told DCNF. “So it’s very important and I believe the Trump administration will not be able to recognize it, understand it, and take over the Panama Canal to the Chinese.”

The Iranian Ministry of Foreign Affairs and Arias B. & Associates did not respond to DCNF’s request for comment.

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