White Collar Crimes Quarterly Milestones (October-December 2025)

US sanctions multiple Indian companies and their directors for trade with Iran, signalling that Indian businesses should review value chains for foreign sanctions risks and upgrade import-export and shipping contracts.

In October and November 2025, the US sanctioned multiple Indian companies and their directors for engaging in trade in petrochemicals or drones with Iran. A similar round of sanctions were also imposed in July 2025, the first time in recent years in which larger Indian businesses were subject to sanctions driven by US foreign policy objectives. The US also announced that future sanctions enforcement would target sea supply routes, including oil and chemical importers, port terminal operators, ship owners and management companies, brokers and insurers. The express policy objective is to target global chains of Iran’s oil, petrol, and petrochemicals exports – including disguised shipments.

Being placed under global financial sanctions leads to complex contractual inconsistencies and conflict-of-law issues, as India does not generally prohibit Iranian trade and does not automatically recognise sanctions imposed by other nations. Regardless, given the integrated nature of the global banking and payment systems, coupled with the US dollar’s primacy in international settlements, sanctioned companies are largely excluded from international financial systems and encounter significant roadblocks in receiving and making payments and operations generally.

The US sanctions third-party country actors (such as Indian businesses) not because they have violated any extra-territorial American law, but purely as a policy measure to disincentivise further trade with other nations. These geopolitical factors, along with pending American bills proposing higher tariffs for countries trading with Iran or buying Russian oil, show that sanctions-related exposure for Indian businesses is currently at its highest level.

To mitigate these risks and demonstrate that their compliance measures meet the standards expected by international sanctions authorities, Indian businesses should proactively review both import and export value chains and evaluate the risks of trading (direct or indirect) with embargoed countries. They should also amend their contracts to address the impact of sanctions on counterparties and vendors.

Contractual controls on M&A exits and tendering processes are now required for companies delivering World Bank-funded projects.

The World Bank (Bank) has updated its Integrity Compliance Guidelines (Guidelines). The Guidelines are built into the Bank’s terms of financing, which companies executing Bank-financed projects must comply with. The Guidelines require project participants to monitor and prevent practices the Bank considers ‘sanctionable’ – i.e., fraud, corruption, collusion and anti-competitive practices, and coercion.

In a key change, ‘obstruction’, i.e., suppressing or concealing information and documentation, is now a sanctionable practice. The Bank now also expressly requires project participants to conduct integrity due diligence during Mergers and Acquisitions (M&A) transactions (either pre-acquisition or during post-acquisition integration) and have sufficient walk-away rights if ethical issues are identified. Further, likely motivated by multiple enforcement actions for inaccurate bid disclosures and documents, the Bank requires strict controls over the bid assessment and submission processes undertaken by companies’ tendering teams.

Private sector entities executing Bank-funded projects should proactively review their compliance frameworks to ensure alignment with the Bank’s updated Guidelines. This review should assess whether the entity has sufficient systems and controls in place to prevent, identify and respond to obstruction. It should also evaluate the robustness of firewalls governing tendering and bid assessment processes to ensure accuracy, independence, and integrity in bid preparation and submission. Further, compliance programmes should be reviewed to confirm whether M&A and joint venture activity are supported by appropriate integrity due diligence and contractual safeguards and are fully aligned with the Bank’s revised regulatory expectations.