On July 23rd, 2019, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released the Iran-related civil aviation industry advisory. OFAC wanted to outline certain deceptive practices that the Iranian civil aviation industry engages in and highlight the reasons not to engage in trade with the industry.

OFAC provides that non-US persons could be cited for engaging in unauthorized activities with airlines accused of supporting Iran’s proliferation of weapons of mass destruction, international terrorism, or human rights abuses. Companies named by OFAC include:

  • Mahan Air,
  • Caspian Air,
  • Meraj Air,
  • Pouya Air,
  • Dena Airways,
  • Al-Naser Airlines,
  • Syrian Air,
  • Dart Airlines,
  • Khors Aircompany,
  • Kyrgyz Trans Avia,
  • Qeshm Fars Air, and
  • UM Air.

OFAC states that Iranian airlines, civil air and commercial, have assisted Iran in its regional-disturbing activities in places such as Syria.

Reasons for the New Advisory

OFAC provides a case study of Mahan Air, which transferred Islamic Revolutionary Guard Corps (IRGC)-related fighters and weapons to Syria to Assad and provided Syrian Air with assistance. OFAC shows that other countries are also responding to Mahan Air, including Germany and France, which denied landing rights to the company. Any entity providing financial services, ground services, reservations and ticketing, catering, freight booking and handling, interline transfer and codeshare agreements, aircraft parts and equipment procurement, refueling contracts, and maintenance-related services may be at risk of enforcement actions.

OFAC also provided a general outline of US sanctions on Iran, which states the kind of exposure US and non-US persons may have to enforcement action for engaging in transactions with designated Iranian and Iran-related entities. OFAC goes on to summarize the revocation of the licensing policy for the sale of US-origin aircraft to Iranian civil aviation companies after the United States has withdrawn from the Joint Comprehensive Plan of Action (JCPOA). OFAC states that Iranian airlines may be using front companies in Europe, the Middle East, Africa, and Asia to obtain US-origin goods.

Iranian airlines may also be using third-party suppliers to obtain US-origin products, and certain misrepresentations might be made with regards to the end-user of the goods. OFAC advises brokers and various intermediaries to be vigilant for false and fraudulent information with regard to OFAC licenses.

Potential Impact on the U.S. Civil Aviation Industry

US entities should be aware that their involvement in providing aviation-related services to Iranian airlines may come under the purview of US primary and secondary sanctions. Generally, a specific license is now required for any type of aviation-related service. OFAC still continues to have a general license and a licensing policy for providing parts, components, accessories, attachments, systems, and equipment, technologies, and services for export to certain civil aircraft in Iran. An OFAC sanctions attorney could help companies obtain all the necessary information to communicate with OFAC or draft and submit a license application.