On 21 October the US Treasury designated four entities and five individuals and identified nine vessels as blocked property in its campaign against Iran’s shadow fleet. The more important development came in one sentence about FinCEN.
“FinCEN is acting in close coordination with European partners, including in Greece, and leveraging existing legal authorities, such as its first issuance of an administrative subpoena pursuant to 31 U.S.C. § 5318(k) of the Bank Secrecy Act, to advance its investigation into a Greek bank’s potential ties to Iran and its proxies.”
Section 5318(k) of the US Code allows a subpoena to a foreign bank that “maintains a correspondent account in the United States”. It can cover records of that account or any other account at the bank, including records held outside the US. Using it for the first time against a European bank is a message to every foreign lender that clears dollars: holding a US correspondent account gives Washington a way into your records.
FinCEN has also issued multiple requests for information on banks’ relationships with OFAC designated Iranian financial institutions. Taken together, the scrutiny is moving from ships to the banks behind them.
The designations themselves target the people and firms that set up and service the fleet. Karnakis and Karnakis, a law firm based in Panama and Greece, registers the companies that own shadow fleet vessels and acts as their corporate agent. Roxette Maritime Shipping and Trading S.A., also based in Panama and Greece, manages seven Panama flagged vessels. Amigoz Singapore PTE. Ltd. is a port shipping agency. Whales Shipping Line LLC, based in Dubai, owns two UAE flagged vessels. The five individuals are three members of the Karnakis Kosmas family and two Karnakis employees, Pedro and Roberto Ortega Jones.
Treasury says companies registered by Karnakis moved “hundreds of millions of dollars’ worth” of Iranian steel, petroleum and petrochemicals. A tanker can be renamed. A law firm that has set up owning companies for years is a deeper part of the structure and harder to replace. All designations were made under Executive Order 13902, as part of Operation Economic Outcast, which Treasury announced on 24 August 2026.
Treasury Secretary Scott Bessent said: “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.”
Digital Trade Outlook’s View: The Subpoena Is the Story
Section 5318(k) has now been used against a European bank, and every lender with a US correspondent account is on notice. Banks serving ship managers, registered agents and port agencies in the named jurisdictions face the closest scrutiny. Iran loses the lawyers and agents who set up its front companies, and they take longer to replace than tankers.
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Image: US Department of the Treasury and FinCEN seals