Export compliance goes beyond SCOMET classification: sanctioned Iranian procurement networks hide destinations behind intermediaries and routes. Indian exporters must vet buyers, end-users, end-use, routing and technology transfers, since knowing the end user protects business.
“Classification is easy; knowing your end-user is hard.”
Export control compliance is undergoing an important transformation. For Indian exporters dealing in dual-use goods, sensitive technologies, specialised equipment, software and technical know-how, the traditional question “Is my product covered under SCOMET?” is no longer sufficient.
A recent international development illustrates why.
On 29 September 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of persons and entities involved in procurement for Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). The network was reportedly involved in sourcing dual-use components, electronics and equipment supporting Iranian ballistic-missile, UAV and military-aircraft programmes.
For Indian exporters, an important lesson arises not merely from the items involved, but from the procurement routes.
Sensitive procurement today does not necessarily occur directly between an exporter and the ultimate country of concern.
International procurement networks may employ distributors, trading companies, intermediaries, freight routes and financial channels across multiple jurisdictions. Consequently, the country appearing on a purchase order or commercial invoice may not necessarily reveal the ultimate destination or end-user.
This changes the nature of export-control due diligence.
An exporter must increasingly ask:
Who is buying? Who is ultimately using? What is the actual end-use? Where will the goods finally go?
SCOMET Classification Is the Starting Point
India’s SCOMET framework (Special Chemicals, Organisms, Materials, Equipment and Technologies) controls the export of specified dual-use and strategic items.
Correct classification against the applicable SCOMET entries remains fundamental.
However, a conclusion that an item is “non-SCOMET” should not automatically be treated as the end of the compliance exercise.
Depending upon the circumstances, exporters may also need to consider end-use and end-user concerns, diversion and proliferation risks, applicable sanctions, foreign-origin technology restrictions and other regulatory requirements.
This becomes particularly important for electronics, aerospace and UAV components, navigation and communication systems, sensors, propulsion technology, specialised machinery, chemicals, software, technical data and other potentially dual-use technologies.
Intangible Technology Cannot Be Ignored
Export controls are also no longer confined to boxes crossing a border.
Engineering drawings, design files, source code, software, technical specifications, know-how and certain forms of technical assistance can raise export-control considerations.
Companies therefore need controls not only at the shipping gate, but also within engineering, R&D, IT, procurement and commercial functions.
A Practical Compliance Approach
Before executing a sensitive export, companies should consider five fundamental questions:
1. What are we exporting?
Establish the correct technical classification and SCOMET status.
2. Who are we exporting to?
Screen the buyer, consignee, intermediary and ultimate end-user.
3. What will it be used for?
Understand and document the declared end-use.
4. Where will it ultimately go?
Examine unusual routing, transshipment and diversion risks.
5. Are there additional restrictions?
Consider applicable sanctions, foreign-origin technology controls and licensing requirements.
The emerging principle is therefore simple:
Know Your Product + Know Your Customer + Know Your End-User + Know Your End-Use.
In modern international trade, export-control compliance is increasingly not merely about obtaining a licence. It is about understanding the entire transaction before the goods- or technology, leave your control.
