Iranian Civil Aviation - Sanctions
Adopted in March 2008, UNSCR 1803 called upon all States in accordance with their national legal authorities and legislation and consistent with international law, in particular the law of the sea and relevant international civil aviation agreements, to inspect the cargoes to and from Iran of aircraft owned or operated by Iran Air Cargo, provided there are reasonable grounds to believe that the aircraft is transporting goods prohibited under UNSCR 1803 or previous UNSCRs.
The Bureau of Industry and Security [BIS] of the US Department of Commerce issues Temporary Denial Orders (TDOs) to prevent the unauthorized export or reexport of items and the servicing of items illegally exported or reexported. For instance, on September 11, 2009, BIS renewed a TDO suspending the export privileges of Mahan Airways (an airline operating in Iran). On December 4, 2008, BIS renewed a TDO suspending the export privileges of Galaxy Aviation Trade Company, three of its shareholders, and Iran Air for 180 days. This TDO was originally issued on June 12, 2008. Evidence obtained by BIS showed that the respondent parties were planning to reexport a U.S.-origin Boeing 747 cargo aircraft from Turkey to Iran.
Iran Air was sanctioned by the Treasury on 23 June 2011 for ferrying soldiers and weapons of war to Syria. Iran Air has provided support and services to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and the IRGC through the transport and/or transfer of goods for, or on behalf of, these entities. Iran Air Tours serves as Iran Air’s domestic air carrier, operating a fleet of 14 aircraft connecting 13 Iranian cities with two main hubs in Tehran and Mashhad, Iran.
On numerous occasions since 2000, Iran Air shipped military-related electronic parts and mechanical equipment on behalf of MODAFL. MODAFL was designated by the U.S. Department of State in October 2007 under E.O. 13382 and has brokered a number of transactions involving materials and technologies with ballistic missile applications. Iran Air has shipped military-related equipment on behalf of the IRGC since 2006, and in September and November 2008, Iran Air shipped aircraft-related raw materials to a MODAFL-associated company, including titanium sheets, which have dual-use military applications and can be used in support of advanced weapons programs.
Rockets or missiles have been transported via Iran Air passenger aircraft, and IRGC officers occasionally take control over Iran Air flights carrying special IRGC-related cargo. The IRGC is also known to disguise and manifest such shipments as medicine and generic spare parts, and IRGC officers have discouraged Iran Air pilots from inspecting potentially dangerous IRGC-related cargo being carried aboard a commercial Iran Air aircraft, including to Syria. Additionally, commercial Iran Air flights have also been used to transport missile or rocket components to Syria.
Boeing’s Global Trade Controls (“GTC”) compliance group reviewed contacts with Iran, Syria, Sudan and Cuba (the “Sanctioned Countries”) before the release of goods or information. Boeing’s principal contacts with the Sanctioned Countries consisted of products and services solely related to the safe operation of Boeing commercial aircraft. In addition, Boeing generated combined annual revenues from these countries during each of the three fiscal years 2006-2008 of approximately $2 million, attributable to the sale of flight navigational materials and the provision of trip planning services for customers in Syria. The annual revenues from these countries are not material to the Boeing Company’s annual revenues of approximately $60 billion. Boeing does not knowingly provide any products, technologies, services or financial support in or to the Sanctioned Countries.
Boeing has an export control and economic sanctions compliance program that includes training designed to ensure that all activity relating to the listed countries is conducted in conformity with applicable law. The program includes an independent organization of trade control specialists assigned within our business units to advise on business transactions and monitor compliance. There are also established policies and procedures designed to ensure that Company personnel involved in international business and exporting activity are knowledgeable and equipped to prevent any impermissible engagement or contact as well as ensure that parties to any business transactions are screened against the appropriate U.S. government Specially Designated, Denied Parties and other lists. In addition, the Company engages directly and regularly with U.S. government regulators to keep them informed of our business interests and activities with respect to these countries.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) published Guidance Relating to the Provision of Certain Temporary Sanctions Relief in Order to Implement the Joint Plan Of Action (JPOA) Reached on November 24, 2013, Between the P5+1 and the Islamic Republic of Iran (Guidance), issued on January 20, 2014. The JPOA provides for the temporary licensing of “the supply and installation in Iran of spare parts for safety of flight for Iranian civil aviation and associated services. License safety related inspections and repairs in Iran as well as associated services.” Iran Air was taken off the terrorist watch list by the State Department. OFAC issued a new Statement of Licensing Policy (SLP) that covered certain activities related to the safety of Iran's civil aviation industry. The SLP established, during the JPOA Period, a favorable licensing policy regime under which U.S. persons, U.S.-owned or -controlled foreign entities, and non-U.S. persons involved in the export of U.S.-origin goods can request specific authorization from OFAC to engage in transactions that are initiated and completed entirely within the JPOA Period to ensure the safe operation of Iranian commercial passenger aircraft, including transactions involving Iran Air.
The USG would not impose blocking sanctions under section 1(a)(iii) of E.O.13382; sections 2(a)(i)-(ii) of E.O. 13645; and section 544.201(a)(3) of the Weapons of the Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544 (WMDPSR), with respect to persons that, exclusively during the JPOA Period, materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, Iran Air in connection with activities intended to ensure the safe operation of Iranian commercial passenger aircraft, provided such activities are outlined in the JPOA and are initiated and completed entirely within the JPOA Period and do not involve persons on the SDN List other than Iran Air or any Iranian depository institutions listed solely pursuant to E.O. 13599.
Provided that the relevant transactions did not involve the U.S. financial system or persons on the Specially Designated Nationals and Blocked Persons List (SDN List), payments of charges for services rendered by the Government of Iran in connection with the overflight of Iran or landing in Iran of aircraft owned by a non-U.S. person and registered outside the United States were not subject to sanctions under U.S. law. The involvement of persons on the SDN List, including Iranian financial institutions or airlines designated pursuant to Executive Order 13224 or Executive Order 13382, would create sanctions exposure for participants to such transactions.
U.S. persons could not participate in transactions related to the payment of overflight or landing fees to the Government of Iran, nor can such transactions transit the U.S. financial system, unless the transactions fell within the scope of 31 C.F.R. § 560.522 or a specific license issued by OFAC and the payments in connection with such authorized transactions are consistent with 31 C.F.R. § 560.516. U.S.-owned or -controlled foreign entities are authorized to participate in transactions related to the payment of overflight or landing fees to the Government of Iran to the extent such transactions are consistent with the terms of General License H.[04-27-2016]
The Administration would also license transactions for spare parts, inspections, and associated services necessary for the safety of flight of Iranian passenger aircraft. In order to qualify for a lease under any of these categories, the transactions must be initiated and completed during the JPOA period—in other words, commencing no earlier than today and concluding no later than July 20th.
Specific licenses may be issued on a case-by-case basis to authorize persons to engage in transactions intended to ensure the safe operation of Iranian commercial passenger aircraft that are otherwise prohibited by the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560, and the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. Part 544. The activities that may be licensed include, but are not limited to, the exportation and reexportation of: services related to the inspection of commercial aircraft and parts in Iran or a third country; services related to the repair or servicing of commercial aircraft in Iran or a third country; and goods or technology, including spare parts, to Iran or a third country.
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