Iran’s Specially Designated Global Terrorist (“SDGT”) listed airline Mahan Air has apparently succeeded in another sanctions-busting coup. Yesterday, Transportation Minister Abbas Akhoundi announced that Iran had been able to acquire 15 secondhand aircraft, including 9 that had been delivered to Mahan Air. The Office of Foreign Assets Control (“OFAC”) designated Mahan Air pursuant to Excutive Order 13224 on October 12, 2011 for “ferrying operatives, weapons and funds on its flights.”
According to reports, Mahan Air acquired the aircraft, eight Airbus A340s and one A321, through the Iraqi carrier Al-Naser Airlines. The Financial Times quoted two western diplomats who alleged that Al-Naswer was operating as a “cut-out” for Mahan, with one stating that they were able to trace the payments from Mahan through a number of Gulf companies.
While the details of the case remain murky, there are some interesting angles to explore. According to Al-Naser’s website, the company operates two Boeing 737s and one 767. Airfleets.net shows (not sure of how reliable a source this is) shows Al-Naser has 8 Airbus A-340s active, including one leased from U.S.-based International Lease and Finance Corporation. Another is leased from German lender DVB Bank.
Given that users on one aviation forum were wondering if Al-Naser was operating on behalf of Mahan as early as October 2014, it’s an open question as to whether there were red flags that the leasing agents could have spotted that would hint that sanction-busting was going to take place. Additionally, it appears the aircraft were recently overhauled by Airbus itself.
Except for the possible link to ILFC, it does not readily appear that there is any U.S. nexus through which OFAC could attach jurisdiction; though as noted there are still many unanswered questions. So the only enforcement action that could result is a designation for “provid[ing] financial, material, or technological support for” a 13324-designated entity. With the June 30 deadline for a comprehensive nuclear deal fast approaching, it’s somewhat doubtful that Treasury (i.e. the White House) would rock the boat with a designation action.
If Mahan Air illicitly acquiring western aircraft is ringing bells, it should – in 2008 the company was placed on the Bureau of Industry and Security (“BIS”) Denied Persons List for purchasing 3 Boeing 747s from the UK company Balli Aviation. Balli eventually settled with the Department of Justice for $15 million.