The supplier is in Dubai, the forwarder in Hong Kong, the bank in Singapore, and the tanker that will carry the cargo changed its name last year. The importer has a clean invoice and a certificate of origin. Is there anything left to check?
Quite a lot, judging by a settlement the U.S. Treasury announced on May 18, 2026. Adani Enterprises, an Indian company, agreed to pay $275 million to the Office of Foreign Assets Control (OFAC) over 32 apparent violations of U.S. sanctions on Iran. Between November 2023 and June 2025 it bought liquefied petroleum gas from a Dubai-based trader who described the gas as Omani and Iraqi; OFAC found that red flags “should have put AEL on notice” that it came from Iran, and that 32 dollar payments of about $192 million had passed through U.S. banks. This article explains whose sanctions reach an importer, what to check at each layer of a shipment and what a paper trail cannot prove on its own. Data as of November 2026.
This article is for information only and is not legal advice. Sanctions lists and rules change often; check the official lists and consult a sanctions lawyer before a transaction with any doubt.
Whose sanctions apply to an importer?
More than one country’s, as a rule. Sanctions are national or regional laws, and each applies by its own test of who is covered.
The United States applies OFAC sanctions to U.S. persons and to transactions that touch the U.S. financial system. That is why a payment in dollars matters even when buyer and seller are both outside the country: the Adani payments were processed by U.S. financial institutions, according to OFAC. OFAC’s lists name companies, people and vessels, and under its long-standing 50% rule a company owned 50% or more, directly or indirectly, by one or more listed persons is treated as blocked even if it is not named. The maximum civil penalty under the International Emergency Economic Powers Act, the law behind most U.S. programs, was $377,700 per violation or twice the value of the transaction, whichever is greater, after the inflation adjustment published in the Federal Register on January 15, 2025.
The European Union applies its sanctions to EU nationals and companies and to business done in the EU. Since its 14th package of June 24, 2024, an EU company must also make “best efforts” to ensure that its subsidiaries outside the EU do not undermine the Russia sanctions, according to the law firm Noerr. The EU also lists vessels by name and IMO number: more than 670 were on its list after the 21st package of July 23, 2026, according to NorthStandard.
The United Kingdom runs its own regime through the Office of Financial Sanctions Implementation and its own list, which also designates ships. A company trading with all three markets usually screens against all three lists, because a name that is clean on one can be listed on another.
Four layers of a single shipment
Diagram: Portolan, 2026
On our reading, it helps to treat each shipment as four separate questions, because a problem can sit in any one of them while the others look fine.
The first layer is the parties: the seller, the buyer’s own customer if goods are resold, the forwarder, the shipowner, the charterer, the bank and the insurer. Each is screened by its full legal name, and for companies the owners matter as much as the name because of the 50% rule.
The second is the goods and their origin. Some goods are banned because of where they come from, some because of where they go, and some because of what they are, such as dual-use items. A certificate of origin is a statement by the seller, and in the Adani case the stated origin was the point of failure.
The third is the vessel, covered in the next section.
The fourth is the route and the money: the ports of loading, transshipment and discharge, any ship-to-ship transfer at sea and the currency and banks used for payment. A route that crosses a country under sanctions, such as the corridor through Iran described in our guide to the International North-South Transport Corridor, raises the question of whose sanctions on that country apply to each party.
How do you check a vessel?
By its IMO number, the seven-digit number assigned to the hull for life. A ship’s name and flag can change, sometimes several times, but the IMO number stays, and the U.S., EU and UK lists identify designated ships by it. The current name, flag, registered owner and manager can then be compared with what the bill of lading and the charter party say.
History matters as much as the present. OFAC’s guidance for the maritime industry of October 31, 2024 lists warning signs that, by the agency’s description, may point to an attempt to hide a cargo’s origin or a vessel’s location, according to a summary by the law firm Troutman Pepper Locke. Among them are long gaps or odd patterns in a ship’s AIS position signal, a certificate of origin that does not match the AIS track and voyage records, sudden changes in trade documents such as a new forwarder appearing mid-deal, a counterparty’s reluctance to answer questions and complex ownership through newly formed companies in high-risk jurisdictions.
Many of these signs are associated with what Western governments call the so-called shadow fleet: old tankers carrying oil under sanctions outside the mainstream insurance system. The term has no legal definition, and Russia’s Foreign Ministry rejects it as having no basis in international law; we explain how big that fleet is and why the estimates differ in our article on the so-called shadow fleet. For an importer of manufactured goods on a container ship the vessel layer is usually simpler, but the forwarder should still be able to name the ship and its IMO number before loading.
Did you know? OFAC treated the Adani violations as egregious and not voluntarily self-disclosed, yet the settlement amount reflected the company’s remedial measures after it discovered the conduct and its cooperation with the investigation, according to the OFAC release of May 18, 2026.
What the Adani case shows
Illustration: Portolan
Three points stand out for importers. The paperwork was in order on its face: the trader declared a permitted origin, and the documents said so. The jurisdiction came from the money: U.S. dollar payments through U.S. banks brought a non-U.S. buyer of non-U.S. gas under OFAC’s reach. And the test OFAC applied was what the company should have noticed, which is why the release speaks of red flags.
For a smaller importer, the scale is different but the logic is the same. A price well below market, a supplier who cannot explain the source, a vessel with gaps in its track or a last-minute change of loading port are reasons to stop and ask. A written answer from the supplier, kept on file, is part of the evidence that the importer did check.
Does cargo insurance still pay if sanctions are breached?
Not necessarily. Marine cargo and liability policies typically include a sanctions exclusion clause, and OFAC’s 2024 guidance pointed out that an insurer may be unable to pay a claim or keep cover in place without itself breaching sanctions, according to the Troutman Pepper Locke summary. The same applies to protection and indemnity cover for shipowners, as we explain in our guide to war risk insurance and P&I clubs.
In practice, that means a sanctions problem can turn an ordinary loss, such as water damage or a lost container, into an uninsured one. Before shipping on a vessel or route with any sanctions question, ask the insurer or broker in writing whether cover applies.
What to check yourself before you sign
Table 1. Sanctions checks for one import shipment
| Layer | What to check | Where |
|---|---|---|
| Parties | full legal names of seller, forwarder, carrier, bank; owners of 50% or more | OFAC Sanctions List Search, EU sanctions map and consolidated list, UK Sanctions List |
| Goods | origin, end use, dual-use status, any import ban on the product | certificate of origin, supplier declaration, customs broker |
| Vessel | IMO number, name and flag history, owner and manager, AIS gaps | forwarder or carrier, vessel tracking service, the three lists |
| Route and money | ports, transshipment, ship-to-ship transfers, currency and banks | booking, bill of lading, payment instructions |
| Contract | sanctions clause, right to stop performance, cover under the cargo policy | sales contract, forwarder terms, insurer |
Source: Portolan, based on OFAC guidance of October 31, 2024 (as summarized by Troutman Pepper Locke) and the OFAC enforcement release of May 18, 2026. Data as of November 2026.
Screen again when anything changes: a new forwarder, a new vessel, a new port or a new payment route. Lists are updated without notice, and the EU alone added 41 vessels in July 2026. The forwarder is part of the chain, and a forwarder who is reluctant to name the vessel or the subcontracted carrier is itself a red flag, as our guide to choosing a freight forwarder explains. If a screening result is unclear, the safe step is to pause the deal and ask a sanctions lawyer before money moves.
