The US Treasury Department sanctioned Karnakis and Karnakis, a law firm based in Panama and Greece that it says has supported Iranian shipping for years, it was announced late on Wednesday.
Treasury also sanctioned shipping agents based in Asian countries that it says directly aid Iranian "shadow fleet" operations.
In announcing the sanction, US Treasury Secretary Scott Bessent declared they know the corporate background of sanctions-busters and vowed to take action.
"Whether you are conducting illegal oil transfers at sea or sitting in the corner office of a law firm, if you are supporting the Iranian regime, we will find you and sanction you. Iran’s facilitators must make a choice: Either you are with us or against us. We know who you are, we know what you’re doing, and we will continue to take action," Bessent posted on X.
“Shadow fleet” means the network of ships, companies and service providers that moves Iranian oil and other goods while hiding who owns the cargo and where it came from, so buyers and shippers can avoid US sanctions.
What Treasury alleges
The State Department says the firm set up shell companies for years to hide the true owners of vessels carrying Iranian oil, petrochemicals and steel.
Treasury says the firm’s employees served as directors and officers of the companies they registered, which obscured who owned them.
One of those companies, Elias Shipping and Trading, owned the tanker Ramona 1 and fronted for Syria’s Al-Qatirji Company.
According to a Reuters report, the firm’s front companies served networks selling millions of barrels of Iranian oil that benefited the IRGC Quds Force and the Houthis.
Whether you are conducting illegal oil transfers at sea or sitting in the corner office of a law firm, if you are supporting the Iranian regime, we will find you and sanction you. Iran’s facilitators must make a choice: Either you are with us or against us. We know who you are,… https://t.co/7mWAIk7x6M
— Treasury Secretary Scott Bessent (@SecScottBessent) October 21, 2026
Why a ship changes names and flags: Owners can legally rename and reflag a vessel when it’s sold or changes management. In shadow fleet operations, though, repeated changes make a ship harder to trace and can leave it with a clean-looking history. Investigators therefore track the IMO number rather than the name.
Scope of the action
Treasury also sanctioned five people tied to the firm, a ship management company operating seven Panama-flagged cargo vessels, and shipping agents in Asia.
In total, the list names four companies, five people and nine vessels. Treasury is giving the law firm’s clients one month to wind down their dealings with it.