As a reminder, the U.S. primary sanctions under the Iranian Transactions and Sanctions Regulations prohibit a wide range of activities.
As tensions grow between the United States and Iran, the Department of Treasury’s Office of Foreign Assets Control (OFAC) has issued an advisory to alert the civil aviation industry about Iran’s deceptive practices with respect to its efforts to acquire U.S.-origin aircraft and related goods, technology or services.
Examples of these deceptive practices provided by the advisory include, but are not limited to:
- The use of front companies and pass-through entities in Europe, the Middle East and Asia to conceal the Iranian end-user;
- Misrepresentations to various intermediaries that sanctions against Iran have been lifted and activities are authorized by OFAC; and
- The use of general trading firms located in free trade zones to place orders for U.S. origin aircraft parts or components.
The advisory also sets forth activities that could subject an entity or individual to sanctions if conducted for or on behalf of a person who appears on OFAC’s List of Specially Designated Nationals and Blocked Persons or is otherwise designated as subject to sanctions. These include:
- Financial services;
- Reservations and ticketing;
- Freight booking and handling;
- Procurement of aircraft parts and equipment;
- Maintenance;
- Airline ground services;
- Catering;
- Interline transfer and codeshare agreements; and
- Refueling contracts.
As a reminder, the U.S. primary sanctions under the Iranian Transactions and Sanctions Regulations (ITSR) prohibit a wide range of activities, including prohibiting U.S. persons and U.S.-owned or -controlled foreign entities from engaging in transactions with or involving Iran, the government of Iran, and Iranian financial institutions. See 31 C.F.R. Part 560. U.S. persons, as well as non-U.S. persons, who violate the ITSR may be subjected to significant monetary penalties, and those who act willfully in violation of these sanctions are subject to criminal prosecution by the Department of Justice.
For More Information
If you would like further information about this Alert, please contact Brian S. Goldstein, Michael E. Barnicle, Jamie E. Brown, Keith J. Feigenbaum, any member of the International Practice Group, any member of the Transportation and Automotive Industry Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.