U.S. Treasury Targets Iran’s Shadow Fleet and Sanctions Evasion Network

The U.S. Department of the Treasury announced new sanctions against businesses, individuals, and vessels accused of helping Iran transport goods and generate revenue despite U.S. sanctions.

The action is part of Operation Economic Outcast, a U.S. effort to disrupt the networks and financial channels Iran uses to move oil, evade sanctions, and fund its military and weapons programs.

According to the Treasury Department, the latest action targets a Panama- and Greece-based law firm, shipping agents based in Singapore and the United Arab Emirates (UAE), and seven cargo vessels linked to the movement of Iranian goods.

How the network allegedly operated

1. Companies helped hide ownership

The Treasury Department sanctioned the law firm Karnakis and Karnakis, accusing it of helping establish shipping companies that owned vessels involved in transporting Iranian oil, steel, and petrochemicals. According to Treasury, the firm’s employees also acted as directors or officers of some registered companies, making it harder to identify the people who ultimately owned or controlled them.

2. Shipping agents supported cargo movements

Treasury also took action against two shipping agents:

• Amigoz Singapore PTE. Ltd., accused of providing shipping services linked to Iranian oil shipments and shadow fleet activity.
• Whales Shipping Line LLC, based in Dubai, accused of helping arrange shipments of Iranian petrochemicals through a company already under U.S. sanctions.

Shipping agents help arrange vessel movements, port services, and cargo transportation. When these services support sanctioned trade, they can expose businesses and financial institutions to sanctions risks.

3. Seven cargo vessels were identified

The action also identified seven Panama-flagged cargo vessels as blocked property linked to Roxette Maritime Shipping and Trading S.A. Treasury said the vessels had carried Iranian-origin goods, including petrochemicals and steel. The measures were taken under U.S. Executive Order 13902, which targets Iran’s petroleum and petrochemical sectors, among other parts of its economy.

The Treasury Department also said its Financial Crimes Enforcement Network (FinCEN) was working with European partners and using its legal powers to investigate a Greek bank’s potential links to Iran and its proxies.

The action highlights how sanctions evasion can involve more than the company selling a restricted product. It may also involve shipping agents, law firms, vessel operators, registered companies, and financial institutions that help arrange or process transactions.

Implications for Compliance Teams

• Check the full ownership structure: Identify the people who ultimately own or control companies, including those operating through multiple registered companies.
• Screen shipping-related parties: Review vessels, vessel operators, shipping agents, cargo owners, and other parties involved in maritime transactions.
• Look beyond direct customers: Assess whether customers or counterparties are linked to sanctioned entities through ownership, control, shared addresses, or business relationships.
• Review trade and payment details together: Compare cargo descriptions, routes, counterparties, invoices, and payment flows for inconsistencies that may require further investigation.
• Keep sanctions screening current: Update screening data and review potential matches against the latest official sanctions lists.

The key lesson is that sanctions risks can sit across an entire trade network. Financial institutions and businesses need to understand not only who they deal with directly, but also who owns, operates, transports, and finances the goods involved.