INDIA Law and Practice Contributed by: Ayush Mehrotra, Upkar Agrawal and Varsha Goel, Khaitan and Co
• India’s first autonomous trade sanction in the form of an import ban from Pakistan, signalling a para - digm shift from exclusive reliance on UNSC-man - dated measures, toward a more assertive domestic sanctions posture (mentioned in the above section too). • Enhanced know-your-customer (KYC) standards through updated FIU-IND guidelines, imposing stringent customer due diligence requirements including sanction designation verifications, bank account verification and periodic KYC refresh cycles by financial institutions and multi-nation - als indicate both recognition and a pro-active approach of the financial sector to stay compliant with sanctions laws. • Growing alignment with international standards on export control and strategic trade, including closer co-ordination with multilateral export control regimes such as the Wassenaar Arrangement, the Nuclear Suppliers Group and the Missile Technolo - gy Control Regime through enforcement of national legislation. • Emergence of a dual-track Indian trade policy, ie, execution of free trade arrangements across competing geopolitical blocs, coupled with non- enforcement of any autonomous sanctions such as by the US, EU, etc. The FTAs preserve broad national-security exceptions and strengthen rules of origin, customs-risk management and supply- chain cooperation. • Increased exposure to US and EU secondary sanc - tions pressure, principally arising from continued Indo-Russia commercial relationships leading to the private sector adopting corporate governance and contracting measures to combat any adverse sanctions implications. 1.3 Key Industries The following sectors are particularly affected by Compliance obligations under Reserve Bank of India (RBI) directions, screening requirements against UNSC and domestic sanctions lists, enhanced moni - toring obligations and the practical challenges of cor - respondent banking relationships with jurisdictions under sanctions. Additionally, the risk of secondary sanctions regulations in India. Banking and Financial Services
sanctions, particularly under the US framework per - taining to foreign financial institutions, has become a prominent concern for the banking and financial sec - tor. Chemicals Export controls on precursor chemicals and dual-use intermediates, particularly those with potential appli - cation in chemical or biological weapons programmes. Defence and Dual-Use Technology Controls under the special chemicals organisms, materials, equipment and technologies (SCOMET) list and export licensing requirements, particularly con - sidering India’s growing defence exports and technol - VDA compliance obligations, cross-border payment monitoring and the challenges presented by decen - tralised finance platforms that may facilitate sanctions evasion. Maritime and Shipping Enforcement of the Pakistan trade ban, scrutiny of vessels carrying Russian oil and monitoring of ship- to-ship transfers in Indian waters. Oil and Energy Oil refining, import of Russian crude and international petroleum trade remain at the forefront of sanctions- related scrutiny. India is now the world’s largest buyer of Russian seaborne crude and Indian refiners face increasing pressure from both US and EU authorities regarding the origin and pricing of crude oil imports. 1.4 Overview 1.4.1 Types of Sanctions India implements a variety of sanctions, as outlined below. Arms Embargoes Prohibiting the direct or indirect supply, sale or trans - fer of arms and related material (including technical know-how) to or from designated nations, groups, entities or persons, including a bar on shipping such items abroad for repair, servicing, refurbishment or testing. ogy transfer arrangements. E-Commerce and Fintech
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