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Treasury sanctions a law firm for helping Iran move oil by ship

On October 21st the Treasury named a Panama- and Greece-based law firm, two shipping agents and nine vessels. The action reaches the lawyers who set up the shipping companies as well as the ships.
Alert analysis
October 27th, 2026
Vektora
Alert typeRegulatory Action
Wind-down licensesGG and HH issued
Greek bank probeSubpoena issued
Sources11 cited
As ofOct 27th, 2026
Executive Summary

On October 21st the US Treasury sanctioned the Panama- and Greece-based law firm Karnakis and Karnakis, five people tied to it, two shipping agents and nine vessels. The designations rest on Executive Order 13902, which covers Iran's petroleum and petrochemical sectors1. Treasury says the firm registered shipping companies that own vessels carrying Iranian goods1.

The action reaches the people who set up the shipping companies. Treasury says it is targeting law firms and corporate service providers that establish shell and front companies for people trading in sanctioned Iranian products1. It alleges the firm's staff acted as directors and officers of companies they registered, which hid the true owners1.

One firm has been designated, so any wider pattern is still to be shown. A compliance news note says routine company formation remains lawful, while structures tied to sanctioned Iranian flows do not2. The Treasury's financial crimes unit also opened a probe into a Greek bank with its first administrative subpoena of this kind3.

Alert type
Regulatory Action
Legal authority
Executive Order 13902
Vessels identified as blocked property
Nine
Operation announced
August 24th
01Risk Matrix

Legal risk is highest, because the designation reaches service providers under strict liability.

LegalHighStrict-liability penalties apply, and non-US persons are covered.

OFAC may impose civil penalties on a strict liability basis, and non-US persons may not cause US persons to violate sanctions or engage in conduct that evades them1. Two escalation criteria hold: a formal policy action (designations under Executive Order 13902) and enacted economic coercion (blocked property)1.

RegulatoryMediumOFAC and FinCEN are acting together on service providers and banks.

FinCEN issued its first administrative subpoena of this kind in an investigation of a Greek bank, and sent requests for information to six other European banks4,3.

EconomicMediumNine vessels are blocked, and wind-down licenses limit immediate disruption.

OFAC issued General License GG for wind-down transactions involving the law firm and General License HH for wind-down activities, limited safety and environmental transactions and cargo offloading involving the newly blocked vessels5.

BankingMediumForeign banks that knowingly serve designated persons risk US account limits.

OFAC can prohibit or set strict conditions on correspondent accounts of foreign financial institutions that knowingly facilitate significant transactions for a designated person1. Entities owned 50 percent or more by blocked persons are also blocked1.

ReputationalMediumOwners and employees are named personally, not only the firm.

Treasury also sanctioned the firm's founders and three employees who allegedly served as listed directors and officers of the companies the firm created6. The SDN list prints each person's date of birth and passport details5.

02Forecast Watch

The test of a wider pattern is whether a second service provider is designated before year end.

Calibration. Confidence on the mechanism is high: Treasury names law firms and corporate service providers as a target category in its own release1. Confidence on the horizon is medium: one designation does not show how often Treasury will repeat it.

Analyst assessment. Each call is scored once its date passes.

85%

OFAC announces another Iran-related designation round

Settles Nov 13th, 202617 days left
30%

OFAC designates another law firm or corporate-services provider under Iran authorities

Settles Dec 31st, 202665 days left
10%

Treasury or FinCEN publicly names the Greek bank under investigation

Settles Dec 31st, 202665 days left
2%

OFAC removes Karnakis and Karnakis from the SDN list

Settles Dec 31st, 202665 days left
4%

The US and Iran announce an agreement that lifts sanctions on Iran's oil exports

Settles Dec 31st, 202665 days left

Watch for. These public sources would move the calls.

  • OFAC recent actions page (Treasury, several times a month): new Iran-related designations and general licenses.
  • SDN list updates (OFAC, with each action): entries for law firms, trust companies and registered agents.
  • FinCEN news releases (FinCEN, as issued): further subpoenas or named banks.
  • Talks between Washington and Tehran (press, as it happens): any term on oil-export sanctions.
03The Signal

The record shows an expansion of targets inside an existing campaign, backed by allegations Treasury has not yet tested in court.

Three companies the firm set up, Skyros Maritime and Trading, Corfu Maritime and Trading and Elias Shipping and Trading Group, were already designated for owning vessels in the Iranian petroleum trade1. Elias owned a tanker and fronted for Syria's Al-Qatirji Company, which sold Iranian oil that benefited the Revolutionary Guards' Quds Force and the Houthis1.

A 2023 Lloyd's List investigation had already exposed the corporate structures behind the Iranian gas carriers that the firm served7. The latest action follows that reporting.

These are Treasury's allegations. Karnakis and Karnakis did not immediately respond to a request for comment4. Its website says it specializes in maritime and commercial law8.

Nine
Vessels identified as blocked property
Seven
Panama-flagged cargo ships managed by Roxette
Two
UAE-flagged support vessels owned by Whales
04What Happened

Treasury moved from the ships to the firm that registered their owners.

Background
February 28th
Strike.
The US and Israel launch the war with Iran, Reuters reports4.
2023
Other.
Lloyd's List exposes the corporate structures behind a fleet of gas carriers shipping Iranian LPG; the firm features prominently7.
August 24th
Sanctions.
Treasury Secretary Scott Bessent announces Operation Economic Outcast1.
October 21st
Sanctions.
Treasury sanctions the law firm, five people, a ship manager, two shipping agents and nine vessels1,9.
October 21st
Other.
FinCEN issues an administrative subpoena in a Greek bank investigation and requests for information to six other European banks4,3.
October 21st
Other.
OFAC issues wind-down General Licenses GG and HH5.
October 26th
Other.
Latest. OFAC amends 11 FAQs, including those on blocking and rejecting transactions and filing reports10.
Woodcut portrait of Scott BessentUnited States

Scott Bessent

US Secretary of the Treasury

He announced Operation Economic Outcast on August 24th1. On October 21st he said: "Iran's facilitators must make a choice: Either you are with us or against us"1.

What to watch
  • The next designation round under Operation Economic Outcast
Engraved emblem for Office of Foreign Assets ControlUnited States

Office of Foreign Assets Control

US Treasury sanctions office

It added the firm, five people, a ship manager, two shipping agents and nine vessels to the SDN list, and issued wind-down licenses5.

What to watch
  • New SDN entries for service providers
  • Further amendments to its FAQs
05What's Being Overstated

The vessel count, the reach of the action and the rhetoric all run ahead of the record.

  • Nine vessels. Reports count nine blocked vessels9. Treasury says only ANEMOS, GLORIS and PRIDE shipped Iranian-origin goods in the past year. The other four Roxette ships and the two Whales support vessels are blocked because their owner or manager was designated1.
  • Every law firm is a target. Treasury names law firms and corporate service providers that establish shell and front companies for traders in sanctioned Iranian products1. Comsure adds that routine maritime and commercial company formation remains lawful2.
  • Collapse is near. In late August Bessent told reporters that Iran's economy could be weeks or months away from collapse8. Talks are stalled, and Iran's conditions for reopening the Strait of Hormuz include lifting sanctions on its oil exports11.
06Why It Matters

Professional advisers and the banks that serve them now sit inside the sanctions perimeter for Iran-linked shipping.

The Maritime Executive reports that the Emamjomeh gas network was sanctioned last year, so Treasury is working upstream to the people who served it6. Treasury says the firm acted as corporate agent for many Emamjomeh firms and for Roxette1.

FinCEN is acting with European partners, including in Greece, and has asked banks about their relationships with designated Iranian financial institutions3. OFAC can restrict the US correspondent accounts of foreign banks that knowingly handle significant transactions for designated persons1.

As of October 21st Washington had held off striking Iran and had kept up its blockade of Iranian ports while issuing waves of sanctions on Iranian shipping networks4. Indirect talks mediated by Qatar and Pakistan have stalled8.

07Sector Impact

Corporate service providers and shipping agents carry the most direct exposure.

NegativeConditional

Law firms and corporate service providers

Treasury names firms that set up shell and front companies for traders in sanctioned Iranian goods1.

Negative: Company-formation work for Iran-linked clients now carries designation risk

Shipping agents and port services

Amigoz Singapore and Whales Shipping Line of Dubai were designated for port and bunkering services tied to Iranian cargo1.

Negative: Port agents handling Iran-linked cargo are named targets

Banks

FinCEN sent requests for information to six other European banks and opened a probe into one Greek bank4,3.

Negative: Correspondent-account access is the lever

Offshore financial centres

Comsure says service providers in centres such as Jersey and Mauritius face practical compliance exposure2.

Conditional: Exposure depends on the client mix

Marine insurers and ship managers

The prohibitions cover providing funds, goods or services for the benefit of any designated person1.

Conditional: Cover for blocked vessels needs a license
08Client Implications

Each reader type should screen service relationships, not only vessels and cargo.

  • Private equity (PE) and venture capital (VC) firms. Screen portfolio companies in shipping, commodities trading and trade finance for registered agents and corporate service providers on the SDN list5.
  • Family offices. Ask trustees and corporate administrators whether any entity in the structure was formed by a designated firm, because 50 percent ownership by blocked persons also blocks an entity1.
  • Corporates. Check charterers, ship managers and port agents against the SDN list, and note that General Licenses GG and HH only authorize wind-down activity5.
  • Law firms. Review company-formation and registered-agent work for clients with Iranian commercial links, and the use of staff as directors and officers of client companies, which Treasury cites as a concealment method1.
09Due Diligence Questions

Five questions test whether a counterparty touches the designated network.

  • Formation. Which firm formed and administers the counterparty's shipping entities? Does any director or officer sit on many unrelated boards?
  • Ownership. Who are the beneficial owners, and has the vessel's ownership or name changed often?
  • Agents. Which port agents, bunkering suppliers and ship managers does it use, and are any on the SDN list?
  • Banking. Do its banks, including in Greece, ask for information about Iran-linked clients?
  • Wind-down. If a supplier is designated, does the contract allow exit within the terms of a general license?
10Vektora Assessment

The facts are firm, and the spread of the approach to other service providers is plausible but untested.

Confidence: high on the facts, medium on the spread. The facts come from the Treasury release and the OFAC action, and trade press and Reuters match them5,1,4,9. Whether Treasury repeats the move rests on one case.

Primary assessment. Treasury has defined a target category, law firms and corporate service providers that form shell companies for Iranian traders1. Registered agents and company administrators who serve Iran-linked shipping should treat the category as live.

  • Strongest alternative. The designation may reflect a case built over years. The firm's earlier client companies were already designated1, and Lloyd's List exposed its structures in 20237. On this reading, Treasury acted on a specific record and did not set a new standard.
  • What would make this call wrong. No second service-provider designation by year end, together with a quiet period for FinCEN, would favor the case-specific reading.

Classification: Regulatory Action. The escalation criteria for formal policy action and enacted economic coercion are met. No military, treaty or alliance criterion is claimed.

11Appendix: Deep Background

The legal mechanics explain why a single designation reaches many counterparties.

All property of designated persons in the United States or in the control of US persons is blocked and must be reported to OFAC1. Entities owned 50 percent or more by blocked persons are also blocked1.

OFAC may impose civil penalties on a strict liability basis1. People who give FinCEN information on violations may be eligible for awards if it leads to penalties above $1,000,0001.

OFAC says the goal of sanctions is a change in behavior, and it will remove people from the list consistent with the law1. The firm can petition for removal.

Fig. 1

Vessels identified as blocked property on October 21st

By designated owner or manager

05107Roxette cargo shipsWhales support vessels

Source: gCaptain, October 21st, 20269

12Sources
  1. Operation Economic Outcast Targets Iran's Shadow Fleet Networks. US Department of the Treasury, October 21st, 2026
  2. US Treasury sanctions law firm over Iran shadow-fleet role, alleging obscuring beneficial ownership. Comsure, October 23rd, 2026
  3. Operation Economic Outcast Targets Iran's Shadow Fleet Networks. FinCEN, October 21st, 2026
  4. US sanctions Greece-, Panama-based law firm over aid to Iran shipping. Reuters, October 21st, 2026
  5. Iran-related Designations; Issuance of Iran-related and Russia-related General Licenses and Amended Frequently Asked Questions. Office of Foreign Assets Control, October 21st, 2026
  6. U.S. Treasury Sanctions Shipping Law Firm for Alleged Shadow Fleet Services. The Maritime Executive, October 21st, 2026
  7. US targets law firm that helped build Iranian LPG magnate's shipping network. Lloyd's List, October 21st, 2026
  8. US sanctions law firm based in Panama, Greece over Iran shipping ties. Al-Monitor, October 21st, 2026
  9. U.S. Sanctions Law Firm, Shipping Agents and Nine Vessels in Iran Shadow Fleet Crackdown. gCaptain, October 21st, 2026
  10. Recent news from Treasury's Office of Foreign Assets Control: Oct. 26. ABA Banking Journal, October 26th, 2026
  11. US treasury sanctions Greek-Panamanian law firm over aid to Iranian shipping. The Times of Israel, October 22nd, 2026