Adani Enterprises agreed in May 2026 to pay $275 million to settle a case brought against it by the U.S. Office of Foreign Assets Control (OFAC). This case is related to 35 liquefied gas (LPG) shipments from a trader in Dubai, which OFAC claims had Iranian origins.
Compliance Issues and Identification Risks
In this case, OFAC pointed to several red flags, including fraud in the Automatic Identification System (AIS), dark periods, and frequent changes in the name, ownership, and flag of the vessels. Documentation related to the first Adani shipment, which was fully refrigerated propane, claimed that the shipment was loaded at the Port of Sohar, Oman. However, the Port of Sohar lacked the necessary facilities for exporting fully refrigerated LPG at that time.
In February 2024, the trader's bank halted payment for a shipment. The trader provided Adani with a new account at another bank and supplied additional shipping documents that OFAC clearly described as fraudulent. Nevertheless, payment was made, and the shipments were sent.
Legal and Regulatory Consequences
OFAC assessed this case as a serious matter, as Adani had been informed four times about third-party concerns regarding the Iranian origin of the shipments, and their prices appeared unreasonable to OFAC. These warnings were delivered to Adani in a piecemeal and disjointed manner.
The main issue is that the party responsible typically does not have all the necessary evidence at hand. Importers possess certificates of origin, terminals know which shipments they can load, and fuel suppliers and vessels monitor the movements of ships. Regulatory authorities gather the overall picture after payment for the shipment, sometimes years later. Companies must collect this picture before making payments.
Since July, the European Union can list vessels that supply fuel, tow, or transfer cargo with specified vessels, and a fuel supplier is also assessed relatively based on its customers.
Adani's experience highlights the urgent need for improvements in compliance systems and transparency in the shipping supply chain. Evidence available on each voyage can facilitate customs and financing processes, and compliance can become an advantage in choosing a business partner.
