Adani Enterprises Limited OFAC Settlement: $275M (2026)

AEL entered the LPG market in June 2023 and, lacking established supply relationships, sought a discounted source. In July 2023, AEL representatives, including the head of its newly formed LPG unit (the "LPG Head"), met with a Dubai-based trading company (the "Dubai Supplier") that purported to supply LPG primarily from Oman. The Dubai Supplier operated through a number of affiliated entities; an affiliate had been designated by OFAC in March 2023 pursuant to E.O. 13846 for purchasing LPG from Iran-based SDN Persian Gulf Petrochemical Industries for resale, though AEL does not appear to have been aware of this at the time. AEL conducted its standard Know Your Customer verification on the Dubai Supplier and its affiliates and identified no hits against the SDN List.

AEL completed its first purchase from the Dubai Supplier in November 2023: a cargo of fully refrigerated propane shipped on a 25-year-old Handysize LPG tanker, with documents identifying the loading port as Sohar, Oman. AEL paid $5,672,024 for the shipment and went on to purchase 34 additional cargos of Iranian-origin LPG from the Dubai Supplier or its affiliates. Payments were generally made in USD or AED from accounts at UAE or Indian banks; payments for three shipments were either never completed or conducted entirely in AED.

Red flags indicating Iranian origin were present from the outset. Sohar is not a significant source of Omani LPG exports, which originate primarily from Salalah, and facilities for exporting fully refrigerated LPG did not exist at Sohar at the time. Transaction documentation bore indicia of falsification, including illogical and nonsequential numbering of certificates of origin, repeated unexplained post-shipment delays in document issuance, and use of outdated document templates. On at least four occasions between March 2023 and February 2024, AEL received third-party warnings that cargos may have originated in Iran. Throughout this period, vessels carrying the Dubai Supplier's cargos routinely engaged in AIS manipulation (including spoofing and prolonged unexplained dark periods), uneconomic or illogical vessel movements, and frequent name, ownership, and flag state changes. Cargo prices were sufficiently below the predominant market rate to warrant heightened scrutiny, given that the LPG was allegedly sourced from jurisdictions neighboring Iran. In February 2024, the Dubai Supplier's bank stopped payment on one shipment due to "internal policy," then directed AEL to a new Dubai-based bank account; the Dubai Supplier ultimately provided apparently falsified shipping documentation to allow the payment to proceed.

AEL does not appear to have taken sufficient steps to investigate these red flags beyond reviewing shipping documentation and obtaining assurance from the Dubai Supplier. AEL appears to have believed that the allegations originated from competitors seeking to prevent it from entering the LPG market and that face-valid shipping documents required no further inquiry. This conduct resulted in 32 apparent violations of § 560.203(a) of the Iranian Transactions and Sanctions Regulations (ITSR), 31 C.F.R. part 560, by causing U.S. financial institutions to facilitate trade-related transactions involving goods of Iranian origin, in violation of § 560.206 of the ITSR.

OFAC determined that AEL did not voluntarily self-disclose the Apparent Violations and that the Apparent Violations constitute an egregious case. Accordingly, under OFAC's Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A, the base civil monetary penalty applicable in this matter is the statutory maximum penalty of $384,208,088. The settlement amount of $275,000,000 reflects OFAC's consideration of the General Factors under the Enforcement Guidelines.

This case highlights the risks and potential costs that non-U.S. companies are exposed to when using the U.S. financial system for transactions that involve the purchase, sale, and maritime transport of energy products from regions with a high risk of sanctions evasion activity. OFAC issued guidance in 2019, 2020, 2024, and 2025 specifically identifying the risks presented by Iran's efforts to ship clandestinely petroleum, petroleum products, and petrochemical products, revenues from which it uses to fund its destabilizing activities, including advancing its nuclear weapons and ballistic missile programs and supporting terrorist groups.

Industry participants, especially buyers of energy products and financial institutions facilitating related transactions, should carefully review transaction details for indications that they are dealing in products or cargoes of Iranian origin. Importers should conduct appropriate due diligence to corroborate the origin of energy products, including taking steps to verify the authenticity of certificates of origin issued by a relevant competent authority, particularly when issued in jurisdictions where certain actors are known to obfuscate Iranian origin, such as Oman, United Arab Emirates, or Iraq. Relying solely on counterparty documentation and warranties with respect to cargo origin may be insufficient to mitigate the risk of potential violations of OFAC-administered sanctions regulations.

Energy importers must be familiar with and monitor for typologies associated with Iran's reliance on a shadow fleet of vessels to transport its energy exports. Common shadow fleet activity includes non-commercially viable activity like successive ship-to-ship transfers, deliberate vessel position information manipulation, fraudulent vessel identity claims, use of older, poorly maintained vessels, and nexuses to sanctioned actors or activity through opaque vessel management and ownership structures. OFAC has released extensive guidance, including the 2025 Guidance for Shipping and Maritime Stakeholders on Detecting and Mitigating Iranian Oil Sanctions Evasion, advising industry of the risks of engaging with this shadow fleet and the specific typologies employed in Iran's maritime sanctions evasion. Energy importers should continuously monitor for new trends in sanctions evasion and proactively adapt compliance protocols to prevent violations.

Buyers of energy products originating from high-risk regions are encouraged to closely scrutinize and deploy enhanced due diligence when presented with proposals offering prices significantly below prevailing market rates. Additional caution is especially warranted when significantly below-market prices are offered by entities with limited public profile or trading history, and where multiple affiliated entities are used to conduct similar transactions for unexplained reasons. Compliance with U.S. sanctions is not an exercise in box-checking; allegations of involvement by counterparties in sanctions evasion should be swiftly and thoroughly investigated.

Finally, even where the threshold for voluntary self-disclosure credit is not met, OFAC is prepared to offer substantial mitigation in the event of prompt disclosure, rapid investigation, and significant cooperation.

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