US Treasury warns financial institutions and maritime sector participants of sanctions risks associated with China-based teapot refineries involved in importing Iranian oil through shadow fleet and sanctions evasion networks

The alert identifies common evasion methods including ship-to-ship transfers, falsified shipping documentation, vessel identity manipulation, and the use of front companies and intermediary brokers across Asia and the Middle East. Treasury also urges enhanced due diligence on refinery-linked transactions and correspondent banking relationships, while warning that foreign financial institutions facilitating these activities could face secondary sanctions exposure.