With “Implementation Day” came the lifting of certain key US and EU sanctions on the civil aviation industry. However, many prohibitions still remain, and licensing requirements may attach to US persons or non-US persons who seek to do business in Iran. Companies must continue to navigate this complex sanctions framework if seeking to engage in Iran’s aviation sector.

On January 16, 2016 the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a Statement of Licensing Policy (SLP) establishing a favorable licensing policy towards the sale of commercial passenger aircraft and related parts and services to Iran, provided such transactions do not involve any person on OFAC’s Specially Designated Nationals List (SDN List). Prior to this SLP, US persons were restricted from engaging in such transactions with Iran or Iranian entities. Additionally, non-US persons were subject to the same prohibitions where the aircraft or related components or technology incorporated 10% or more US-origin content by value.

Following Implementation Day, US persons as well as non-US persons selling aircraft where there is a nexus to US jurisdiction (e.g., aircraft containing more than 10% US content) can receive a license to sell or lease such commercial aircraft to non-designated Iranian entities. The types of aircraft that may be approved under the SLP include wide-body, narrow-body, regional, and commuter aircraft used for commercial passenger aviation. Ineligible aircraft include cargo aircraft, state aircraft, unmanned aerial vehicles, military aircraft, and aircraft used for general aviation or aerial work.

The SLP also applies to associated services where there is a nexus to US jurisdiction, including the supply of parts, warranty service, brokering, insurance and financing, as well as the involvement of individual US persons in the transaction. In addition, under the Iranian Transactions and Sanctions Regulations (ITSR), persons who receive a license from OFAC are authorized to engaged in transactions “ordinarily incident” to the licensed activity. In this context, “ordinarily incident” transactions may include transportation, legal, insurance, shipping, delivery, and financial payment services provided in connection with the licensed export. However, through public guidance, OFAC has made clear that the transaction must relate to the licensed export. For example, OFAC states that insuring the shipment of a licensed component to an Iranian customer would be “ordinarily incident” to a licensed export, but that providing insurance to cover the component for a period of years after the original export would require a separate authorization.