Original Coverage & Source Attribution: iclg.com
Panama- and Greece-based practice and five associates blacklisted over allegations that they concealed ownership of vessels carrying Iranian oil and other commodities.
Law firms are rather more accustomed to advising clients on sanctions compliance than finding themselves on a United States sanctions list. But that is precisely what has happened to Karnakis and Karnakis, a practice operating in Panama and Greece, after Washington accused it of helping conceal the ownership of vessels transporting hundreds of millions of dollars’ worth of Iranian oil, petrochemicals and steel.
Announcing the measures yesterday (21 October), US Treasury Secretary Scott Bessent delivered a warning aimed squarely at the legal profession: “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.”
The Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned the firm, its two owners and three associates, accusing them of establishing and administering companies that allowed Iranian shipping networks to conceal their activities.
The action forms part of Operation Economic Outcast, Washington’s campaign to cut off revenue from Iranian exports.
The allegations
According to the Treasury, Karnakis and Karnakis spent years registering companies that owned vessels transporting Iranian commodities, with employees sometimes acting as company directors to conceal the identities of their real owners. The firm allegedly established several shipping businesses previously sanctioned by OFAC, including Skyros Maritime and Trading, Corfu Maritime and Trading, and Elias Shipping and Trading Group.
Elias Shipping, which owned the vessel Ramona 1, allegedly served as a front for Syria’s Al-Qatirji Company, which Washington has accused of selling millions of barrels of Iranian oil to generate revenue for Iran’s Islamic Revolutionary Guard Corps-Qods Force and Yemen’s Houthis. The Treasury also identified the firm’s role in establishing companies associated with Iranian liquefied petroleum gas businessman Seyed Asadoollah Emamjomeh, whose shipping network allegedly transported hundreds of millions of dollars’ worth of Iranian petroleum products. Karnakis and Karnakis acted as corporate agent for numerous companies within that network.
The firm’s owners, Sofianos Karnakis Kosmas and Konstantinos Karnakis Kosmas, both Greek-Panamanian nationals, have been sanctioned alongside Ioanis Karnakis Kosmas, Pedro Ortega Jones and Roberto Ortega Jones.
The sanctions
The designations were made under Executive Order 13902, which authorises sanctions targeting specified sectors of Iran’s economy, including petroleum and petrochemicals. Karnakis and Karnakis was sanctioned for operating in those sectors, while the five individuals were targeted for acting on the firm’s behalf.
The measures also extend to Roxette Maritime Shipping and Trading, a company for which Karnakis and Karnakis acted as corporate agent. Seven Panama-flagged vessels operated or managed by Roxette were designated as ‘blocked property’, meaning they are subject to US asset-freezing restrictions, while Singapore-based Amigoz Singapore and Dubai-based Whales Shipping Line were also sanctioned over their alleged involvement in Iranian shipments.
Lawyers in the firing line
The decision serves as a reminder that lawyers are not immune from sanctions if the authorities believe their services have helped clients conceal prohibited business activities. In this case, the allegations concern the creation and administration of companies rather than the provision of legal advice.
There is some precedent for targeting legal organisations. In September 2025, OFAC sanctioned Brazil’s Lex Instituto de Estudos Juridicos, an organisation headed by lawyer Viviane Barci de Moraes, over alleged support for her husband, Supreme Federal Court justice Alexandre de Moraes. That action, however, concerned alleged support for a sanctioned individual rather than the concealment of international trade.
The consequences for Karnakis and Karnakis could extend well beyond the US. Although the practice operates in Panama and Greece, its designation may make international transactions difficult, particularly where payments involve US banks or dollars. But there is more at stake than the rather dry business of administering shipping companies. According to the US Treasury, revenues from Iranian oil sales help finance the Revolutionary Guards and support armed terrorist groups including Hamas, Hezbollah and the Houthis, and so what might appear to be a matter of routine corporate administration can help sustain organisations responsible for brutal violence and terrorism across the Middle East and beyond.
