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Advisory on Recent OFAC Enforcement: Adani Enterprises Limited and FTI Consulting, Inc.

June 2, 2026

Summary

This advisory summarizes two significant enforcement actions announced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) in May and June 2026. Together, the actions span opposite ends of the sanctions spectrum, one involving Iran’s shadow-fleet energy evasion infrastructure and the other involving Russia’s sectoral debt restrictions, but share a common enforcement message: OFAC will hold sophisticated, U.S. and foreign companies responsible for the economic realities of their transactions.

On May 18, 2026, OFAC announced a $275,000,000 settlement with Adani Enterprises Limited (Adani), an India-based multinational, for causing U.S. financial institutions to process payments for 32 shipments of Iranian-origin liquefied petroleum gas (LPG) disguised as Omani and Iraqi product, despite red flags that should have triggered additional inquiry. On June 1, 2026, OFAC announced a $1,050,000 settlement with FTI Consulting, Inc. (FTI), a Washington, D.C.-based global advisory firm, for indirectly dealing in the prohibited debt of VTB Bank OAO, an entity on OFAC’s Sectoral Sanctions Identification (SSI) List, by issuing invoices whose ultimate obligor was VTB and continuing to work even as those invoices went unpaid well beyond the permissible 14-day tenor.

Key Takeaways From Both Actions

1. Economic Substance Governs — Not Formal Structure

Both actions turn on OFAC’s insistence on looking through formal transaction mechanics to the underlying economic reality. In Adani, the economic reality was that Adani was purchasing Iranian LPG regardless of what the certificates of origin said. In FTI, the economic reality was that VTB was the ultimate obligor of FTI’s invoices regardless of the intermediary law firm’s name on the engagement letter. OFAC will not accept formal arrangements that merely create the appearance of compliance.

2. Red Flags Impose a Duty to Investigate — Ignoring Them Is Recklessness

In Adani, OFAC catalogued five distinct categories of red flags that Adani overlooked or explained away. In FTI, the warning signs were internal: the compliance team’s own recognition of the prohibition, persistent non-payment well beyond the 14-day tenor, and the law firm’s explicit disclaimer of credit exposure. In both cases, OFAC found recklessness — not ignorance. The enforcement standard does not require actual knowledge of a violation; it requires that a sophisticated actor take seriously the information in front of it and act accordingly.

3. Indirect Arrangements Carry Full Sanctions Exposure

Both actions involve indirect conduct: Adani purchased Iranian LPG through a Dubai intermediary; FTI issued invoices through a law firm to VTB. OFAC’s enforcement of ‘you cannot do indirectly what you cannot do directly’ is not new, but the FTI case makes it unusually concrete. Routing a transaction through an intermediary does not launder the underlying sanctions prohibition. This principle applies equally to blocking sanctions (Adani’s Iranian-origin LPG) and to transactional restrictions (FTI’s 14-day debt tenor).

4. USD Payments Are a Jurisdictional Hook for Non-U.S. Companies

Adani is an Indian company with no U.S. operations, employees, or direct U.S. counterparties. OFAC’s jurisdiction rested entirely on the fact that 32 payments were denominated in USD and processed through U.S. correspondent banks. The $192 million in USD payments became the mechanism by which Adani caused U.S. financial institutions to facilitate prohibited transactions. Non-U.S. multinationals that clear trade payments in dollars must treat every USD wire as a potential OFAC compliance event.

5. Voluntary Disclosure Credit Is Distinct From Post-Discovery Cooperation

Neither Adani nor FTI received voluntary self-disclosure credit. In Adani’s case, its submissions to OFAC following public reporting did not rise to the level of a voluntary self-disclosure under the Enforcement Guidelines. In FTI’s case, its notification to OFAC following an internal investigation similarly did not qualify. Yet both companies received significant mitigation for their subsequent cooperation, remediation, and document production. OFAC’s message is clear: voluntary self-disclosure provides the strongest mitigation, but meaningful cooperation after discovery still matters substantially.

6. Professional Services Firms Are Now Core Enforcement Targets

The FTI action is among the clearest indicators yet that OFAC regards global advisory, consulting, expert witness, and professional services firms as fully within its enforcement zone, not merely as compliance resources for other regulated industries. Firms that provide services to clients whose counterparties, creditors, or beneficial owners are subject to any form of OFAC sanction face real exposure. Standard SDN list screening of the named client is insufficient.

Recommendations

For Professional and Financial Services Firms

1. Treat persistent non-payment as a compliance event. Under Directive 1, each day that an invoice for SSI-listed entity services remains unpaid past the 14-day tenor is a day of prohibited debt extension. Firms should build automatic escalation triggers into their billing systems for engagements involving any sanctioned or high-risk counterparty: if a payment is not received within the permissible window, the matter must be escalated to compliance before any additional work is performed.

2. Screen the matter, not just the named client. FTI’s violation arose from the identity of VTB as the ultimate obligor of its invoices — not from FTI having a direct contract with VTB. Legal, consulting, accounting, expert witness, and advisory firms must screen all entities that will ultimately benefit from, pay for, or be economically connected to their services, not only the named engagement counterparty.

3. Train compliance teams specifically on sectoral sanctions (SSI) restrictions. Most compliance training focuses on SDN list screening. Sectoral sanctions are transactional — they restrict specific activities (debt above a defined tenor, new equity) involving SSI-listed entities regardless of whether those entities are formally blocked. Staff in legal, finance, and client services must understand the SSI framework and when it applies to their work.

4. When you design around a prohibition, get a legal opinion. FTI’s compliance team identified the VTB risk and devised a workaround payment structure. That structure was not legally analyzed to determine whether it actually resolved the Directive 1 issue. Any payment mechanism, engagement structure, or contractual arrangement designed to address a known sanctions prohibition must receive a formal legal opinion confirming its adequacy before the engagement commences.

For Energy Importers, Commodity Traders, and Maritime Participants

1. Deploy maritime intelligence technology. Adani’s settlement agreement requires it to implement IT solutions capable of detecting AIS manipulation, STS transfers, fraudulent vessel identity, and opaque vessel ownership structures. This is now an industry standard expectation, not a best practice. Any company purchasing hydrocarbons from high-risk regions should use dedicated vessel-tracking and behavioral analytics tools, and audit those tools regularly.

2. Conduct independent origin verification — do not rely solely on counterparty documentation. OFAC specifically warned that certificates of origin from jurisdictions known to be used to obfuscate Iranian origin (UAE, Oman, Iraq) require independent corroboration. Engage third-party inspectors, verify loading port infrastructure capacity, and cross-reference cargo documentation against vessel voyage data.

3. Price-check all energy purchases against prevailing market rates. Below-market pricing on LPG, crude, or refined products — especially from high-risk sourcing regions — is a significant sanction evasion indicator. Establish documented internal benchmarks and require commercial justification for pricing more than a defined percentage below the reference price.

4. Investigate third-party allegations promptly and document the investigation. Adani dismissed competitor concerns as self-interested. OFAC’s message is that such allegations must be taken seriously and investigated thoroughly, with findings documented contemporaneously. Where allegations cannot be affirmatively rebutted, the transaction should not proceed.

5. Map all USD payment flows. Non-U.S. companies should identify every transaction that routes through a U.S. correspondent bank and apply full OFAC compliance analysis to those flows, regardless of the company’s domicile or the nationality of the direct counterparty.

For All Organizations

1. Establish voluntary self-disclosure protocols before a violation is identified. Neither Adani nor FTI received voluntary self-disclosure credit, but both received meaningful mitigation for post-discovery cooperation. Had either entity self-disclosed promptly, the penalty reduction would have been substantially greater. Organizations should have a documented protocol — including legal counsel engagement triggers and a decision framework — ready before any potential violation surfaces.

2. Maintain robust, risk-based annual sanctions risk assessments — and actually update them. Adani entered the LPG market in 2023 relying on a 2020 compliance program. The Adani settlement agreement now requires Adani to conduct iterative risk assessments specifically accounting for maritime hydrocarbon evasion typologies. All organizations should be conducting annual, business-line-specific risk assessments and updating them whenever they enter new product markets, geographies, or counterparty relationships.

3. Ensure senior management owns compliance, not just approves it. Both settlements reflect senior management involvement: Adani’s LPG Head received red-flag information and did not act; FTI’s Senior Managing Director was involved in the VTB engagement throughout. OFAC’s compliance framework requires that senior management not only review and approve the compliance program, but that they actively promote a culture of compliance within their business units.

Adani Enterprises Limited — $275,000,000

Background and Conduct

In June 2023, Adani entered the LPG market for the first time, importing LPG through its affiliate Adani Ports and Special Economic Zone Ltd. (APSEZ), which operates Mundra Port on India’s western coast. To compete against established LPG importers, Adani needed a discounted source of supply. In July 2023, Adani’s newly formed LPG Head met representatives of a Dubai-based trading company (the ‘Dubai Supplier’) that claimed to supply Omani-origin LPG. Adani conducted its standard Know Your Customer process, which identified no SDN List hits, and in September 2023 agreed to purchase LPG from the Dubai Supplier and its affiliates.

In reality, the Dubai Supplier served as a conduit for illicit Iranian LPG. An affiliate of the Dubai Supplier had been designated by OFAC in March 2023 for purchasing LPG from the Iran-based SDN Persian Gulf Petrochemical Industries for resale. Adani does not appear to have been aware of that designation. Adani’s first purchase closed in November 2023 — a cargo of fully refrigerated propane, shipped on a 25-year-old Handysize tanker, with shipping documents identifying the origin as Sohar, Oman. Adani would go on to purchase 34 additional cargos of Iranian-origin LPG from the Dubai Supplier or its affiliates.

Payments were made generally in USD or AED through UAE and Indian bank accounts. In total, U.S. financial institutions processed $192,104,044 in payments across 32 of those shipments — the jurisdictional hook that brought Adani within OFAC’s reach as a non-U.S. entity. Payments for the three remaining shipments were either never completed or settled entirely in AED.

Red Flags Adani Overlooked

OFAC identified multiple categories of red flags that should have prompted additional investigation:

Suspension of LPG Imports and Cooperation

Following public reports in June 2025 that Adani was importing Iranian-origin LPG, Adani immediately suspended all LPG imports and retained U.S.-based counsel to conduct a comprehensive internal investigation. Adani proactively disclosed its investigation findings to OFAC, produced large volumes of documentation, and promptly resolved its potential liability. Adani also implemented extensive enhancements to its sanctions compliance program across its entire corporate group.

Penalty Analysis

OFAC classified the Apparent Violations as egregious and not voluntarily self-disclosed, anchoring the base penalty to the statutory maximum of $384,208,088. The final settlement of $275,000,000 reflects the following factors:

Aggravating:  Adani acted recklessly despite multiple red flags; caused substantial harm to Iran sanctions objectives (supporting Iran’s nuclear program, proxy groups, and oppressive activities); and is a large, sophisticated multinational with energy and infrastructure operations.

Mitigating:  No prior OFAC enforcement in the preceding five years; LPG business represented less than 1.5% of Adani’s 2025 consolidated revenue; substantial cooperation including expedited internal investigation and voluminous document production; and significant post-discovery remedial measures.

OFAC’s Compliance Message on the Adani Case
Adani’s Mandatory Compliance Commitments (Five-Year Term)

As part of the settlement, Adani agreed to maintain a sanctions compliance program for at least five years and to submit annual certifications to OFAC from a senior-level executive confirming fulfillment of the following specific commitments:

FTI Consulting, Inc. — $1,050,000

Background and Legal Framework

VTB Bank OAO (VTB) has been on OFAC’s Sectoral Sanctions Identification (SSI) List under Directive 1 of Executive Order 13662 since July 29, 2014. Directive 1 (later codified in §§ 589.202 and 589.213 of the Ukraine-/Russia-Related Sanctions Regulations (URSR), 31 C.F.R. part 589) prohibits U.S. persons from dealing in new debt of more than 14 days maturity of any Directive 1 entity. OFAC’s published guidance makes clear that the issuance of an invoice by a U.S. person constitutes new debt subject to Directive 1, that debt may not be issued ‘for the benefit of’ an SSI entity, and that U.S. persons cannot extend impermissible-tenor debt to a non-sanctioned party if an SSI entity is the indirect borrower.

How the Violation Occurred

In late 2018, a global law firm asked FTI’s economic consulting unit to provide expert witness services in support of VTB’s defense in a civil suit in Singapore. FTI’s compliance officials recognized that direct dealings with VTB would create sanctions exposure and devised a payment structure intended to address that risk: FTI would issue invoices to the law firm (not VTB); the law firm would pay FTI only after receiving payment from VTB; and FTI would have no direct recourse against either the law firm (unless the law firm had first received payment from VTB) or against VTB itself.

OFAC determined that this structure did not shield FTI from liability. By issuing invoices that VTB was ultimately responsible for paying, FTI indirectly extended new debt to VTB — regardless of the formal payment mechanics. The problem was materially aggravated by the course of conduct that followed:

You Cannot Do Indirectly What You Cannot Do Directly
Penalty Analysis

OFAC classified the Apparent Violations as non-egregious and not voluntarily self-disclosed. The base civil penalty under the applicable schedule was $525,000. The settlement of $1,050,000 was aggravated above the schedule amount to promote future compliance among similarly situated firms. OFAC emphasized the following factors:

Aggravating:  FTI, with involvement of senior managers, recklessly missed multiple warning signs — including its own awareness of the VTB prohibition, continued work despite persistent non-payment, direct participation in calls with VTB about late invoices, and the law firm’s explicit disclaimer of credit risk. FTI’s indirect arrangement also obscured transaction activity that might otherwise have been screened by intermediary financial institutions. FTI is a large, globally sophisticated advisory firm.

Mitigating:  FTI cooperated fully with OFAC’s investigation, agreed to toll the statute of limitations, provided comprehensive contemporaneous documentation including by waiving privilege. The total value of the invoices ($353,862) was very small relative to FTI’s overall business. FTI enhanced its compliance program, including new training on sectoral sanctions, updated screening policies, supplemental compliance resources, and additional controls implemented following Russia’s 2022 full-scale invasion of Ukraine. No prior OFAC penalty in the preceding five years.

OFAC’s Compliance Message on the FTI Case