GLOBAL SANCTIONS UPDATE: U.S. Targets Iranian Shipping  Networks And Chinese Firms As Compliance Obligations Shift

New U.S. sanctions, restrictions on artificial intelligence technology and updated European Union measures are creating fresh compliance obligations for businesses involved in shipping, energy, technology and international trade.

The report highlights enforcement actions by U.S. authorities targeting alleged Iranian petroleum-shipping networks and Chinese entities linked to alleged intellectual-property theft, alongside changes to sanctions authorisations and delistings across several jurisdictions.

U.S. targets Iran-linked shipping networks

On October 21, the U.S. Treasury Department announced sanctions against five individuals, four entities and nine vessels under Operation Economic Outcast, targeting networks allegedly facilitating Iranian petroleum trade and sanctions evasion.

The designated parties include law firm Karnakis and Karnakis, accused by U.S. authorities of helping establish corporate structures used by shipping operators linked to Iran. Shipping and logistics companies in Singapore and the United Arab Emirates were also targeted.

The Office of Foreign Assets Control (OFAC) issued General Licences GG and HH to permit specified wind-down activities through November 20, 2026. The authorisations cover defined transactions involving the designated law firm, shipping company and vessels, with limited provisions for safety, insurance, repairs and certain cargo operations.

Companies must assess whether their counterparties, vessels and transactions fall within the designations or the limited wind-down permissions.

DeepSeek excluded from U.S. federal civilian systems

The U.S. Department of Homeland Security issued an exclusion and removal order on October 20 covering DeepSeek products in federal civilian information technology systems and procurement. The order also requires federal contractors to prevent covered products from appearing in their operations and IT systems, including tools developed using DeepSeek’s open-source code.

The administration cited potential data-security and supply-chain risks associated with the Chinese AI developer. The restrictions could affect technology providers seeking federal contracts and businesses assessing the use of AI tools in government-related work.

The order applies specifically to DeepSeek; broader restrictions on other Chinese AI developers remain a potential future development, not an established extension of the current order.

Chinese entities targeted over alleged trade-secret theft

The State Department announced sanctions on October 19 against five entities connected to Chinese national Linwei Ding, citing alleged theft of U.S. trade secrets involving artificial intelligence technology.

OFAC issued two general licences addressing specified transactions and wind-down activities. The relevant wind-down authorisation runs until January 19, 2027, but does not cover Zhisuan, one of the designated entities.

China opposed the sanctions and warned of possible countermeasures. Businesses should review applicable restrictions and licence conditions before continuing dealings with affected entities.

Russia, Europe and Asia-Pacific measures

OFAC extended General Licence 131K through November 21, allowing specified negotiations, contingent contracts and maintenance or wind-down activities involving Lukoil International GmbH. Completion of transactions under contingent contracts still requires separate OFAC authorisation.

Meanwhile, the European Commission reaffirmed its commitment to Russian energy sanctions and clarified restrictions on exporting refined petroleum products, jet fuel and related services to Russia. The EU also removed Swiss company LOGARCHEO S.A. from its Iraq sanctions list.

Australia separately sanctioned two North Korean companies and two individuals accused of facilitating fraudulent overseas IT employment schemes that generated revenue for North Korea.

For compliance teams, the developments reinforce the need for continuous sanctions screening, ownership checks, vessel due diligence and careful review of general licences before relying on a permitted transaction.