The United States sanctioned an India-based ship-registry network on November 4, accusing it of supplying false flags and certificates to vessels carrying Iranian oil. Treasury also issued a new warning to insurers, trade-finance providers and other maritime businesses about checking whether a ship's claimed registration is real.
The action targets Suniel Kumar Sharma, his spouse Jaspreet Preeti Shahid, associated businesses and two other Indian nationals. A separate designation covers Türkiye-based Fugo Ground Services Inc, which Treasury says continued servicing sanctioned Iranian airlines.
The Treasury announcement describes an effort to restrict the services that let sanctioned vessels keep operating. Its allegations concern the network's dealings with Iran's shadow fleet, including ships operating on behalf of the Iranian military and its proxies.
How a false registry keeps a ship moving
A vessel needs flag registration to meet international requirements and obtain necessary services. OFAC's new maritime alert identifies two ways that registration can be false: a registry issues a flag without authorization from the country it claims to represent, or a vessel claims a flag without supporting registration documents.
Treasury says the Sharma network bought web domains and built sites offering registration, seafarer certification and vessel-classification services on behalf of governments that had not authorized those services. The agency identified claimed connections to countries including Aruba, Guyana, Mali, Mozambique, Malawi, Sint Maarten and Timor-Leste.
OFAC's alert says the network initially provided legitimate services for several jurisdictions. Those governments later revoked its authority, but in several cases it continued registering vessels after officials publicly denounced the operations as fraudulent.
Treasury singled out Eswatini Maritime Affairs and International Ship Registry PTE. Ltd., a Singapore-based company established in 2023. It says the operation continued providing flags after Eswatini authorities disavowed it, including for the sanctioned tanker PING SHUN.
That makes a registry website or certificate an incomplete check. The question is whether the government behind the claimed flag recognizes the registration and the organization issuing it.
The warning signs OFAC wants checked
The alert urges maritime service providers to conduct enhanced due diligence when a vessel appears to use a falsely claimed flag. Its examples include:
- No flag, or an unknown flag, in maritime databases.
- A flag from a jurisdiction without a known ship registry.
- Registration documents that cannot be verified.
- A vessel's broadcast Maritime Mobile Service Identity country code that conflicts with its reported flag.
OFAC also distinguishes false flags from flag hopping, the repeated registration of a vessel under new flags to conceal sanctionable or other illicit activity. A change of flag and an invented registration are different mechanisms. Checking only the vessel's current name or a polished website can miss the underlying registration problem.
What today's sanctions change
Treasury says property belonging to the designated people and entities must be blocked and reported to OFAC when it is in the United States or under a US person's possession or control. The blocking rules also reach entities owned at least 50% by blocked persons, whether that ownership is direct, indirect or held in aggregate.
US-person transactions involving blocked property are generally prohibited unless an exemption or an OFAC license applies. The release warns that violations can bring civil or criminal penalties and that civil penalties can apply on a strict-liability basis.
The maritime alert directs countries facing fraudulent registries to investigate them and report operators to the International Maritime Organization, so its shipping database can identify falsely flagged vessels.
The aviation designation
The aviation designation concerns a different service. Treasury says Fugo Ground Services had direct agreements with sanctioned Iranian carriers, including Iran Air Tour, Saha Airlines and Sepehran Airlines. It says Fugo began serving several carriers in the weeks after their September 8 designations.
