In short
- Five individuals, a ship management company, and shipping agents in Singapore and Dubai are also sanctioned.
- The firm set up shell companies to hide vessel ownership and move millions of barrels of Iranian oil.
What happened
The State Department revealed that Karnakis and Karnakis, a law firm operating in Panama and Greece, has been sanctioned for creating shell companies to conceal the ownership of vessels transporting Iranian oil, petrochemicals, and steel. The firm enabled networks selling millions of barrels of Iranian oil, benefiting the Islamic Revolutionary Guard Corps-Qods Force and the Houthis.
Sanctions were also imposed on five individuals associated with the firm, a ship management company operating seven Panama-flagged cargo vessels, and shipping agents in Singapore and Dubai. These actions are part of Operation Economic Outcast and are intended to prevent Iran from using its shadow fleet to evade U.S. sanctions.
The firm created companies that served as fronts for networks selling millions of barrels of Iranian oil to benefit the Islamic Revolutionary Guard Corps-Qods Force and the Houthis.
What compliance teams should check
- Screen clients and counterparties for links to Karnakis and Karnakis, including Panama and Greece operations.
- Review vessel ownership structures for signs of shell companies used to hide Iranian oil cargo origins.
- Monitor transactions involving shipping agents in Singapore and Dubai for connections to sanctioned networks under E.O. 13902.
Why it matters
This story highlights the evolving tactics used by sanctioned entities to evade restrictions, including the use of professional service providers and complex ownership structures. Compliance officers must be vigilant in identifying shell companies, scrutinizing vessel ownership, and monitoring shipping agents in high-risk jurisdictions. The sanctions under E.O. 13902 reinforce the need for robust due diligence and screening processes to prevent inadvertent facilitation of Iranian shadow fleet operations and protect institutions from regulatory and reputational risks.
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