Strait Talk: OFAC Designates IRGC-Linked "Transit Insurance" Schemes in Strait of Hormuz

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on July 29, 2026, announced new sanctions targeting entities allegedly facilitating the Islamic Revolutionary Guard Corps' (IRGC) efforts to monetize vessel transits through the Strait of Hormuz. This action underscores heightened U.S. scrutiny of arrangements that may function as de facto "protection payments" to Iranian regime actors and raises significant compliance considerations for vessel owners, charterers, insurers and other maritime stakeholders.

Background: The Designated Entities

OFAC designated two entities – the Persian Gulf Marine Insurance Co. and HormuzSafe Marine Services Authority – alleging that they are integral to an IRGC scheme to extract revenue under the guise of maritime services from vessels transiting the Strait of Hormuz. According to the Treasury Department, these entities purport to offer legitimate marine insurance and security services for vessels transiting the Strait of Hormuz but are, in substance, mechanisms for collecting revenue to benefit the IRGC.

The Treasury Department's statement emphasizes that these entities utilize digital currencies – including bitcoin (via Lightning Network), Tether and USDC – to process payments, thereby attempting to circumvent sanctions. HormuzSafe, which launched in May 2025, has actively marketed itself as a "digital insurance" provider, advertising services such as emergency response coordination and security arrangements for strait transits. The company claims to have facilitated more than 15,000 vessel transits and promotes a "99.9 percent safe transit rate."

Concurrent with these designations, OFAC also sanctioned eight tankers – including the Chinese-owned Well Sail, Lily, Al Salmi, Breeze V, Natsumi and Crystal, as well as the Marshall Islands-flagged Nireta and Yehope, along with their respective holding company owners – for allegedly supporting Iranian petroleum exports.

Compliance Implications for Vessels Transiting the Strait of Hormuz

This targeting action carries significant implications for any vessel owner, operator or charterer whose vessels transit the Strait of Hormuz. Specifically, industry stakeholders should:

• Perform Due Diligence on "Insurance" or "Security" Providers. Vessel interests should exercise heightened scrutiny when evaluating any entity offering insurance, security or related services for Hormuz transits. The designation of HormuzSafe and Persian Gulf Marine Insurance Co. demonstrates that OFAC will target entities that function, in substance, as conduits for IRGC revenue, regardless of how those entities market their services. Engagement with such providers, even inadvertently, may expose parties to sanctions liability, including designation as a blocked person or civil monetary penalties.
• Monitor Developments and Exercise Caution Regarding Media Reports. The situation in the Strait of Hormuz and U.S.-Iran relations remain highly fluid. Industry participants should establish processes to monitor OFAC announcements, U.S. Department of State advisories and other official government guidance on a continuing basis. Critically, parties should exercise caution when making operational or compliance decisions based on media reports concerning the state of hostilities or diplomatic developments with Iran. Media accounts may be incomplete, inaccurate or subject to rapid change, and reliance on such reports – rather than verified government guidance – could lead to flawed risk assessments. Decisions regarding vessel routing, insurance arrangements and engagement with service providers should be grounded in official sources and updated legal advice.

Changing Transport Routes

Beyond these recent designations, the conflict between Iran and the U.S. could have a lasting impact on the maritime industry as stakeholders find alternative routes. Syrian President Ahmed al-Sharaa aims to turn Syria into an alternative energy corridor between Europe and the Middle East, potentially jump-starting Syria's economic recovery after 14 years of civil war. The U.S. removed comprehensive sanctions on Syria in 2025 and is in the process of removing Syria from the State Sponsor of Terrorism list following a 45-day congressional notification submitted on July 8, 2026. Syria had been on the list since December 1979 because of the former Assad regime's support for militant and terrorist groups.