Merchant ships in the Strait of Hormuz [AP=Yonhap News]

On the 29th (local time), the U.S. Department of the Treasury and the Department of State designated two organizations as targets for sanctions, stating that Iran has effectively been extorting "tolls" from merchant ships passing through the Strait of Hormuz.

The sanctioned entities are the Persian Gulf Marine Insurance Company (PGMIC) and the HormuzSafe Marine Services Authority (HMSA).

PGMIC is a company established by the Central Insurance of Iran, the country's insurance regulatory body, and it brokers and issues insurance products approved by the Persian Gulf Strait Authority (PGSA), which is supported by the Islamic Revolutionary Guard Corps (IRGC).

These insurance products cover risks such as vessel seizure. The U.S. Treasury Department alleges that Iran is forcing the purchase of these insurance products while simultaneously creating risks by blockading the Strait of Hormuz and attacking ships.

HMSA is an Iranian digital insurance company that advertises services such as insurance, traffic control, security, and emergency response for ships passing through the Strait of Hormuz.

The U.S. Treasury Department reported that the company was created by the Iranian government and that payments are made in cryptocurrencies like Bitcoin to circumvent Western sanctions.

Secretary of the Treasury Scott Bessent stated, "We will not allow Iran to hold global commerce hostage or use international shipping to fund the IRGC’s terrorist, aggression, and oppression activities."

Additionally, eight operators of a "shadow fleet" that transports Iranian crude oil to countries including China in order to evade sanctions were also placed on the Treasury Department's sanctions list.