The U.S. Department of the Treasury on November 4 sanctioned an India-based network accused of operating fraudulent ship registries and classification societies that enabled Iran’s shadow fleet to transport sanctioned petroleum under false flags. The action, carried out under the Treasury’s Operation Economic Outcast, targets Suniel Kumar Sharma and his wife, Jaspreet Preeti Shahid, along with associated companies including Aryavart Ship Management Private Limited, Eswatini Maritime Affairs and Oceaniek Technologies India.
The Treasury’s Office of Foreign Assets Control (OFAC) said the couple’s scheme dates back to at least 2014, when they first attempted to impersonate the flag administration of Dominica before expanding into false registries purportedly representing Guyana, Eswatini, Laos, Aruba, Nicaragua, Sint Maarten, Mali, Mozambique, Malawi and Timor-Leste. Alongside the designations, OFAC issued a new industry-wide advisory warning shipowners, insurers and service providers of the sanctions risks of dealing with falsely flagged vessels.
Network Allegedly Operated Since 2014
According to Treasury, Sharma and Shahid built a web of shell and front companies based in Chandigarh, India, spanning maritime services, financial services and even media-streaming platforms, which they used to shield their core activity of selling fraudulent flag and classification documents. The network is accused of claiming to represent nations across nearly every continent despite lacking any authorization from the governments concerned, allowing sanctioned tankers, including vessels tied to Iran’s military and its proxies, to continue operating commercially.
Treasury singled out the tanker Majestic X, formerly named Phonix and bearing IMO number 9198317, as a concrete example of the scheme’s impact. The vessel was seized by U.S. military forces on April 22 while transporting Iranian crude oil under a fraudulent Guyanese flag that Sharma’s network had allegedly supplied, illustrating how falsified registration documents can keep a sanctioned vessel moving cargo until intercepted.
OFAC Advisory Targets Service Providers
Rather than focusing solely on the tankers themselves, the new designations and accompanying advisory reflect Washington’s intensifying effort to disrupt the intermediaries, registries and certification bodies that keep Iran’s shadow fleet functioning. OFAC noted that vessels exploiting these schemes often lack valid protection and indemnity insurance, exposing global shipowners, charterers and ports to potentially uncovered liabilities running into billions of dollars in the event of an accident or spill.
The advisory urges maritime industry participants, including flag registries, classification societies, insurers, ship managers and port authorities, to strengthen due diligence when verifying a vessel’s flag status and documentation. OFAC stressed that frequent flag-hopping has long been a hallmark of shadow fleet operations, but the emergence of entirely fraudulent registries represents an evolving method for keeping sanctioned ships in service once legitimate flag states have withdrawn registration.
Part of Broader Pressure Campaign
Wednesday’s action is the latest in a string of Treasury measures this year under Operation Economic Outcast aimed at Iran’s petroleum export network, which has previously included sanctions on shadow fleet vessel managers, ship captains and port terminal operators in China accused of receiving Iranian crude shipments. The campaign has intensified alongside broader U.S.-Iran tensions, including recent attacks and seizures affecting commercial shipping in the Strait of Hormuz and Gulf of Oman.
Industry monitors have flagged a growing reliance on registries with limited oversight as sanctioned tonnage is pushed out of traditional flag states. The latest designations block any U.S. assets of Sharma, Shahid and their listed companies and generally prohibit American persons from transacting with them, while the OFAC advisory puts international shipowners and insurers on notice that engaging with vessels carrying unverified or fraudulent flag documentation could itself trigger sanctions exposure.
Why it matters
The case highlights an evolving tactic in sanctions evasion, where fraudulent flag registries and classification certificates, rather than simple flag-hopping, are used to keep tankers carrying Iranian oil operating commercially. For the shipping industry, it raises the compliance bar for owners, insurers, charterers and port authorities, who must now verify not just a vessel’s stated flag but the legitimacy of the registry issuing it. The action also signals Washington’s shift toward targeting the service-provider ecosystem that enables the shadow fleet, a move that could have ripple effects on maritime insurance, classification and ship management sectors handling tonnage of uncertain provenance.
Source: Maritime Executive
