OFAC Issues Advisory on Iranian Deceptive Practices in Aviation Industry
The Treasury’s Office of Foreign Assets Control issued an advisory on Iran’s “deceptive practices” in the civil aviation industry, detailing Iran’s use of commercial airlines for terrorism, weapons programs and sanctions violations. The eight-page advisory, issued July 23, lists several practices U.S. companies should be aware of to avoid violating U.S. sanctions against Iran. The advisory also reviews the U.S.’s current Iran sanctions regime as well as penalties for committing violations.
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Iran employs a range of practices to import U.S.-origin aviation products, the advisory said, including the use of front companies. OFAC said Iran uses companies in third countries in Europe, the Middle East, Africa and Asia to hide the end-user. Iran also uses third-party suppliers to procure and import U.S. aircraft parts, OFAC said, and frequently tell suppliers, dealers and brokers that U.S. sanctions against Iran have been lifted. The country also claims the sales are authorized by OFAC without providing copies of the licenses and places “orders for U.S.-origin aircraft parts or components from firms in one country for delivery to freight forwarding or logistics firms in a second country.”
OFAC said “intermediaries, such as escrow companies and brokers,” should be “vigilant” about falsified OFAC licenses, aircraft registration, insurance data, “overflight movements” and use of front companies.
“Lack of adequate compliance controls could expose those operating in the civil aviation industry to significant risks, including civil or criminal enforcement actions or economic sanctions," Sigal Mandelker, undersecretary of the Treasury for terrorism and financial intelligence, said in a statement.