US targets law firm, shipping agents, and vessels supporting Iran’s shadow fleet

Overview

On October 21, 2026, the U.S. Department of the Treasury (Treasury) announced further sanctions under Operation Economic Outcast, targeting persons and vessels that Treasury states have supported Iran’s shadow fleet and trade in Iranian petroleum, petrochemicals, and other commodities. The action notably includes the designation of Panama- and Greece-based law firm Karnakis and Karnakis, five individuals associated with the firm, and shipping companies and agents, and the identification of several vessels as blocked property.

The Office of Foreign Assets Control (OFAC) imposed the sanctions pursuant to Executive Order 13902, which provides sanctions authorities relating to certain sectors of the Iranian economy, including the petroleum and petrochemical sectors. Alongside the designations, OFAC issued two general licenses authorizing certain wind-down, safety, environmental, and cargo-related transactions involving persons and vessels targeted by the action. FinCEN is also working with European partners in connection with an investigation into a Greek bank’s potential ties to Iran and its proxies, including through FinCEN’s first use of an administrative subpoena under 31 U.S.C. § 5318(k) of the Bank Secrecy Act.

Sanctions targeting legal and corporate services

The action primarily centers on OFAC’s designation of Karnakis and Karnakis, a law firm based in Panama and Greece. Treasury states that the firm registered shipping companies that owned vessels involved in transporting Iranian steel, petroleum, petrochemicals, and other goods and acted as corporate agent for firms associated with Iranian petroleum-related shipping activity.

Treasury states that Karnakis and Karnakis previously established Skyros Maritime and Trading S.A., Corfu Maritime and Trading S.A., and Elias Shipping and Trading Group S.A., among other companies previously designated by OFAC in connection with vessels involved in the Iranian petroleum trade. Treasury also states that the firm acted as corporate agent for several companies associated with the shipping network of Iranian liquefied petroleum gas trader Seyed Asadoollah Emamjomeh.

OFAC designated Karnakis and Karnakis for operating in the petroleum and petrochemical sectors of the Iranian economy. OFAC also designated Sofianos Karnakis Kosmas, Konstantinos Karnakis Kosmas, Ioanis Karnakis Kosmas, Pedro Ortega Jones, and Roberto Ortega Jones for having acted or purported to act for or on behalf of, directly or indirectly, the firm.

The action highlights potential sanctions risks for legal and corporate service providers whose services include establishing and administering entities used in sanctions-sensitive maritime trade. Treasury expressly identifies law firms and corporate service providers that establish shell and front companies for persons trading in sanctioned Iranian products as a focus of Operation Economic Outcast.

Shipping companies, agents, and vessels

OFAC also targeted companies and vessels that Treasury states facilitated the transportation of Iranian-origin goods. Specifically, OFAC designated Roxette Maritime Shipping and Trading S.A., a Panama- and Greece-based company for which Karnakis and Karnakis serves as corporate agent, for operating in the petrochemical sector of the Iranian economy. Treasury states that Roxette operates and manages several Panama-flagged vessels that have transported Iranian-origin petrochemicals and steel products. OFAC also identified seven vessels in which Roxette has an interest as blocked property.

OFAC separately designated Singapore-based Amigoz Singapore PTE. Ltd. for operating in the petroleum sector of the Iranian economy. Treasury states that Amigoz acted as agent for a shipment of Iranian light crude oil and has been associated with other shadow fleet actors.

OFAC also designated Dubai-based Whales Shipping Line LLC for providing support to Amigoz and identified two Whales-owned vessels as blocked property.

General licenses

Alongside the designations, OFAC issued Iran General License GG, “Authorizing the Wind Down of Transactions Involving Karnakis and Karnakis,” and Iran General License HH, “Authorizing Wind Down Activities, Limited Safety and Environmental Transactions, and the Offloading of Cargo Involving Certain Persons or Vessels Blocked on October 21, 2026.”

The general licenses provide limited authorizations in connection with the newly blocked persons and property. Companies seeking to rely on either authorization should review the scope and conditions of the applicable general license carefully. We are happy to discuss the scope of these authorizations in further detail. 

FinCEN investigation involving Greek bank

Treasury also announced that FinCEN is working with European partners, including in Greece, in connection with an investigation into a Greek bank’s potential ties to Iran and its proxies.

Notably, Treasury states that FinCEN has made its first use of an administrative subpoena pursuant to 31 U.S.C. § 5318(k) of the Bank Secrecy Act to advance that investigation. FinCEN has also issued multiple requests for information concerning banks’ relationships with OFAC-designated Iranian financial institutions.

The announcement is therefore relevant not only from a sanctions perspective but also for financial institutions assessing relationships that may create direct or indirect exposure to Iranian financial institutions and other Iran-linked actors.

Sanctions implications

As a result of the action, all property and interests in property of designated or blocked persons described by Treasury that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Entities owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless exempt or authorized by OFAC, OFAC’s regulations generally prohibit transactions by U.S. persons or within or transiting the United States that involve property or interests in property of blocked persons.

Treasury also notes that certain transactions involving persons designated in the action may create secondary sanctions exposure for participating foreign financial institutions.

Key takeaways

The October 21 action demonstrates the continued focus of Operation Economic Outcast on persons that Treasury considers to be supporting Iran’s ability to generate and move revenue through international trading and shipping networks. Notably, this action extends beyond vessel owners and operators to a law firm and individuals that Treasury states were involved in establishing and administering the corporate structures used by participants in Iran-related maritime trade.

The action also reinforces the importance for shipping agents, vessel operators and managers, and other maritime service providers of assessing potential Iran-related sanctions exposure arising from counterparties, vessels, cargoes, ownership structures, and agency relationships. For financial institutions, Treasury’s announcement regarding FinCEN’s first use of its administrative subpoena authority under 31 U.S.C. § 5318(k) also indicates continued scrutiny of banking relationships that may provide Iran or its proxies with access to the international financial system.

We are closely monitoring further developments relating to Operation Economic Outcast and U.S. sanctions against Iran. We are also happy to discuss the issues above in further detail.

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