U.S. Sanctions Fraud Ship Registry Network Powering Iran's Shadow Fleet

The U.S. Treasury Department on Wednesday sanctioned an India-based network it accuses of running fraudulent ship registries that kept sanctioned tankers moving Iranian oil on the water, designating 13 targets including two individuals and nine companies under Operation Economic Outcast.

The network, led by Suniel Kumar Sharma and his wife, Jaspreet Preeti Shahid, allegedly impersonated maritime authorities in Guyana, Eswatini, Laos, Aruba, Nicaragua, and Sint Maarten. It issued vessel registrations, seafarer certifications, and classification documents without any authorization from the governments whose flags it sold.

Some of the vessels flying those false flags were carrying oil on behalf of Iran's military and its proxies, Treasury said.

How the scheme worked

Treasury dates the operation to at least 2014, when Sharma and Shahid began impersonating the flag administration of Dominica. The infrastructure grew from there.

In 2023, Sharma established Singapore-based Eswatini Maritime Affairs and International Ship Registry PTE Ltd. The company kept registering vessels hauling Iranian oil even after authorities in Eswatini publicly disavowed the operation.

Many of the fake registries ran on websites built to mimic legitimate national ship registries. They offered a full service menu — vessel registration, seafarer certification, classification — all of it unauthorized.

The designations cover Sharma, Shahid, two associates, and nine companies and organizations. The named entities include Oceaniek Technologies India, Aryavart Ship Management Private Limited, and Eswatini Maritime Affairs and International Ship Registry.

Which tankers were involved?

Treasury identified several vessels that used the fraudulent flags:

• PING SHUN (IMO 9231901) — a sanctioned tanker that previously carried multiple shipments of Iranian oil
• LATTAFA (IMO 9245794) — a sanctioned tanker issued a false flag by the network
• BINARY STAR (IMO 9380570) — likewise falsely flagged
• VERA (IMO 9304655) — likewise falsely flagged
• MAJESTIC X, formerly PHONIX (IMO 9198317) — seized by U.S. military forces on April 22 while carrying Iranian oil, operating under a fraudulent Guyana flag

The MAJESTIC X case shows the enforcement end of the pipeline: a tanker with a bogus flag, loaded with Iranian crude, physically intercepted at sea.

What does the OFAC advisory change?

Alongside the designations, Treasury's Office of Foreign Assets Control issued a new industry alert. The message to service providers is blunt: companies working with falsely flagged vessels risk sanctions or penalties themselves.

OFAC's advisory reflects a shift in shadow fleet behavior. Operators have long used frequent flag switches to obscure their tracks. Fraudulent registries have now become an increasingly common way to keep sanctioned vessels trading after legitimate registries remove them.

OFAC urged insurers, financial institutions, and other maritime service providers to step up due diligence. The red flags it listed:

• Vessels flying unknown flags
• Registration documents that cannot be verified
• Discrepancies between a ship's reported flag and the country code embedded in its Maritime Mobile Service Identity (MMSI) number
• Vessels claiming flags from countries that have no recognized ship registry

For insurers, banks, classification societies, and port agents, the compliance bar just rose. The advisory effectively pushes verification of flag-state legitimacy down the commercial chain — every counterparty touching a vessel now carries the burden of catching a forged registration.

Why false flags matter beyond sanctions

The risks run past compliance files. Flag states are responsible for overseeing vessel safety, certification, and compliance with international maritime regulations. A tanker flying a flag no government actually granted has no legitimate regulatory oversight behind it — and likely no valid insurance.

Treasury warned that falsely flagged vessels could expose coastal nations to billions of dollars in potential environmental and economic damages if a major casualty occurs. One grounded or colliding shadow-fleet tanker, uninsured and unregulated, is a state-level liability.

OFAC also encouraged governments to investigate fraudulent registries operating in their names and to report suspected cases to the International Maritime Organization, so maritime databases accurately reflect vessels carrying invalid registrations.

Broader pressure on Iran

Wednesday's action forms part of Operation Economic Outcast, the sanctions campaign launched in August to cut off the financial networks supporting Iran's oil exports and other economic activity. It lands as Washington continues its maritime blockade of Iran amid the ongoing war, working to disrupt the channels that move Iranian crude to international markets.

Treasury Secretary Scott Bessent left no ambiguity about the trajectory. "We know where you are, and we will sanction those who continue supporting the Iranian regime, whether by land, sea, or air," Bessent said.

The package also designated Türkiye-based Fugo Ground Services Inc., which Treasury said continued providing ground handling services to several sanctioned Iranian airlines.

The designations and the advisory together signal Washington's pivot in target selection: away from individual tankers and toward the service providers and intermediaries — registries, certifiers, ground handlers, financiers — that keep the shadow fleet afloat. Insurers and banks exposed to mid-life tonnage trading opaque lanes should expect more registry-level scrutiny, not less.