About a week and a half ago, I flagged Mahan Air’s apparently successful effort to acquire Western commercial aircraft using Iraq’s Al-Naser Airlines as a front. It did not take long before the U.S. government made its feelings known regarding aircraft deals with 13224-designated entities. Today, the Office of Foreign Assets Control (“OFAC”) designated Al-Naser, as well a Ras al Khaimah-based middleman Sky Blue Bird Aviation and its owner Issam Shammout. At the same time, Commerce Department’s Bureau of Industry and Security (“BIS”) added Al-Naser and its part-owner Ali Abdullah Alhay, as well as a Dubai-based front Bahar Safwa General Trading to its Mahan Air Temporary Denial Order (“TDO”). It appears from the wording of the OFAC action that Sky Blue Bird and Shammout were not linked to the most recent aircraft acquisition, but had assisted Mahan in other sanctions evasion.
While some of this information leaked out to the press a few weeks ago, the BIS TDO provides some interesting new tidbits. In addition to the 9 Airbus aircraft Mahan was able to acquire, it appears that they also attempted to purchase at least 2, and possibly 3 Airbus A320s that were physically in the United States and had been operated by American Airlines as recently as 2014.
Two A320’s with Manufacturer’s Serial Numbers (“MSN”) 99 and 82 were slated to be transferred to Al-Naser earlier this year before being intercepted by BIS’ Office of Export Enforcement (“OEE”). According to BIS, Letters of Intent for both aircraft were signed on October 19, 2014, Sales Agreements were signed on February 19, 2015, and a “Final Sale Date” was listed as March 6, 2015. Payments of $450,000, $2 million, and $986,000 were sent by Alhay through Bahar Safwa General Trading. Since it appears that these funds originated from Mahan Air, they should be considered blocked property pursuant to 31 C.F.R. 560.211.
There also appears to be a third A320 aircraft mentioned in the Letter of Intent, MSN 317, but BIS was not able to obtain any sales agreements on this plane. Open-source information indicates however that this aircraft was withdrawn from use on February 22, 2015 and stored at Phoenix’s Goodyear Airport on February 26, 2015. MSN 317 was leased from AerCap, an international aircraft leasing company based in the Netherlands. Two of the aircraft mentioned by BIS as having been successfully transferred to Iran, MSN 560 and 164, were leased to Al-Naser Airlines by the International Lease Finance Corporation (“ILFC”), which is based in Los Angeles. AerCap acquired ILFC in May 2014.
What’s also interesting is that the only online presence of Bahar Safwa General Trading is a flurry of job advertisements for an English-language office assistant that were posted in late October 2014, at the same time as the Letters of Intent were signed. The postings direct to an email, email@example.com that appears to be held by a “Gemma Afshon,” a graduate of Mindanao State University in the Philippines. Afshon of course is a common Persian name.
As The Dude would say, there are a lot of ins and outs to this story. We’re going to do some additional investigation and keep you updated.