2026.10.24. The Fair Economy — The United States sanctioned Panama- and Greece-based law firm Karnakis and Karnakis, along with shipping companies and nine vessels, for supporting the "shadow fleet" that transports Iranian oil.
The U.S. Treasury Department announced on Oct. 21 (local time) that it had sanctioned the law firm and shipping companies for supporting the shadow fleet, a key route for Iranian oil exports.
The sanctions target five individuals, four companies, and nine vessels. The law firm is accused of setting up shell companies for years to conceal the true owners of ships carrying Iranian crude oil, petrochemical products, and steel. According to the Treasury, this helped Iran's Islamic Revolutionary Guard Corps Quds Force generate hundreds of millions of dollars in revenue.
On Oct. 8, the Treasury Department also sanctioned 22 vessels belonging to the shadow fleet and 27 related entities. This latest action is part of "Operation Economic Outcast," which began in August. The sanctions were based on Executive Order 13902.
U.S. Treasury Secretary Scott Bessent said, "Whether illicitly transporting oil at sea or sitting in a law firm's plush offices, if you are supporting the Iranian regime, we will find you and sanction you."
Of the nine sanctioned vessels, seven Panama-flagged cargo ships were designated as blocked property. Along with the sanctions, the Treasury Department issued two general licenses allowing, for a limited period, the wind-down of certain transactions and activities related to vessel safety and environmental protection.
The United States has made oil shipments using Iran's shadow fleet a key sanctions target. These vessels are known to conceal their routes and the origin of their cargo by turning off their Automatic Identification System (AIS), conducting ship-to-ship transfers, or using complex ownership structures. The size of the shadow fleet grew significantly after Russia's 2022 invasion of Ukraine prompted the West to tighten sanctions on Russia.
Alongside this action, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued an administrative subpoena over allegations of Iran-linked activity at a Greek bank and sent requests for information to six European banks regarding their transaction relationships with Iranian financial institutions. The Treasury Department had previously restricted U.S. dollar transactions for the UAE branch of Egypt's Banque Misr over its dealings with Iran.
The United States is expanding the scope of its response as Iran's sanctions-evasion tactics evolve. In the past, cases mainly involved falsifying crude oil origins and changing vessel flags, but recently the sanctions have come to include professional service providers such as cryptocurrency exchanges and law firms.
In September, the Treasury Department sanctioned BitBank, a cryptocurrency exchange controlled by Iranian financier Babak Zanjani. A Senate Democratic investigative team also released a report stating that 84% of 846 wallets subject to Iran sanctions had transacted using Tether (USDT).
Since the start of 2026, the United States has expanded "Operation Economic Outcast" by successively sanctioning financial institutions and the shipping, aviation and cryptocurrency sectors that supported evasion of Iran sanctions. After declaring an "Economic D-Day" against Iran in August, it sanctioned 36 targets in September, including 27 Iranian airlines, and that same month added sanctions on Turkey's Golden Global Bank and Russia's VTB Bank. In October, it sanctioned Panama- and Greece-based law firm Karnakis and Karnakis, shipping companies and nine vessels for supporting the transport of Iranian crude oil.
The intensified U.S. sanctions on Iran are dealing a real blow to the Iranian economy. According to a Treasury Department analysis, Iranian crude oil stockpiled on tankers waiting near Singapore, Malaysia and China amounts to only about 20 million barrels, and new loading operations at Iranian domestic ports have effectively come to a halt as a result of the maritime blockade.
Some have voiced skepticism about the practical impact of the sanctions. Brett Erickson, senior director at risk consultancy Obsidian Risk Advisors, said, "Iran has already delivered most of the oil cargo that was at sea," calling the move "more of a press-release exercise than a measure that delivers real economic damage—a belated political maneuver."
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