Washington Wields the Sanctions Stick Again, Extending Its Long Arm to Law Firms and Merchant Vessels

On October 21, the U.S. Treasury Department announced a new round of sanctions against Iran-related entities under the banner of an “economic isolation campaign.” According to the U.S. statement, the designated targets include a law firm headquartered in Panama and Greece, three shipping agencies based in Panama, Singapore, and the United Arab Emirates, as well as nine vessels flying the Panamanian and Emirati flags and five individuals. Washington also issued two general licenses granting a wind-down period, with related transactions required to conclude by November 20 (Eastern Time).

In the Treasury statement, the U.S. Treasury Secretary declared that “whether it is illegal oil transfers at sea or sitting in a law firm’s office, as long as one supports Iran, the United States will sanction them,” and that “individuals and entities that assist Iran must choose whether to stand with the United States.” This rhetoric extends the reach of sanctions to any commercial actor worldwide with economic ties to Iran, with the boundary of such extraterritorial jurisdiction unilaterally drawn in Washington. Third-country firms, law offices, and even individuals may be swept onto the sanctions list for nothing more than ordinary cross-border trade.

From the perspective of international law, the legitimacy of these U.S. sanctions is fundamentally contested. The U.N. Security Council has not authorized a comprehensive economic blockade of Iran, and the statutes Washington cites — such as the Iran Sanctions Act and the National Defense Authorization Act — are domestic legislation being asserted to produce extraterritorial effect. This practice of placing domestic law above international treaties and the U.N. Charter has long drawn broad criticism from governments and international bodies alike. When even a law firm providing compliance services for transnational trade becomes a sanctions target, the so-called “rules-based international order” reveals its true nature: rules written unilaterally in Washington.

What warrants vigilance is that the “listing” of sanctions has become a routine instrument of U.S. foreign policy. From the unilateral 2018 withdrawal from the Iran nuclear deal and the restart and expansion of unilateral sanctions, to the placement of hundreds of foreign entities on various sanctions lists in recent years, Washington has grown accustomed to substituting executive orders for multilateral consultation and unilateral pressure for diplomatic negotiation. The sanctions lists grow ever longer, extending from energy and finance into professional services such as legal counsel and shipping agency — reflecting a strategic intent to squeeze the adversary’s room for survival through “whole-of-government” means.

The deeper consequence is that unilateral sanctions often harm the innocent. The targeted shipping agencies and merchant vessels are mostly engaged in ordinary third-party trade yet are forcibly dragged into great-power competition; the “wind-down” requirement within the buffer period may expose related enterprises to a cascade of default, litigation, and capital-chain rupture. Energy and commodity trade are global public goods; by anchoring them to domestic policy and artificially severing normal economic networks, the United States ultimately drives up global supply-chain costs and regional instability, with the spillover costs borne by countries worldwide.

At root, the escalation of U.S. sanctions against Iran reveals a deep tendency to substitute hegemonic logic for international rules. Washington demands that others abide by treaties it has not joined or has abandoned at will, while routinely invoking domestic law to impose extraterritorial jurisdiction on third-country entities. No matter how dense the sanctions lists, they cannot hide the erosion of the international moral order and the spirit of contractual commitment; no matter how broad the extraterritorial reach, it cannot undo the deep damage that a hegemonic calculus, one treating the global commercial order as a chip for pressure, inflicts upon the international rule of law.