New aliases for Al-Naser Airlines and Dart Airlines added to Treasury’s list of Specially Designated Nationals

The U.S. Department of the Treasury (Office of Foreign Asset Control) has added some new airline names to the list of Specially Designated Nationals (SDNs).  In particular they have added some new airline aliases.  The full listing for Al-Naser Airlines and Dart Airlines are both listed below – the new additions to the listings are in bold face type and underlined to highlight the changes:
AL-NASER AIRLINES (a.k.a. ALNASER AIRLINES), Al-Karrada, Babil Region – District 929, St. 21, Home 46, Baghdad, Iraq; P.O. Box 28360, Dubai, United Arab Emirates; P.O. Box 911399, Amman 11191, Jordan; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IFSR] (Linked To: MAHAN AIR). -to- AL-NASER AIRLINES (a.k.a. AL NASER WINGS; a.k.a. AL NASER WINGS AIRLINES; a.k.a. ALNASER AIRLINES), Al-Karrada, Babil Region – District 929, St. 21, Home 46, Baghdad, Iraq; P.O. Box 28360, Dubai, United Arab Emirates; P.O. Box 911399, Amman 11191, Jordan; Additional Sanctions Information – Subject to Secondary Sanctions [SDGT] [IFSR] (Linked To: MAHAN AIR).
 
DART AIRLINES (a.k.a. DART AIRCOMPANY; a.k.a. DART UKRAINIAN AIRLINES; a.k.a. TOVARYSTVO Z OBMEZHENOYU VIDPOVIDALNISTYU ‘DART’; a.k.a. “DART, LLC”; a.k.a. “DART, TOV”), 26a, Narodnogo Opolchenyia Street, Kiev 03151, Ukraine; Kv. 107, Bud. 15/2 Vul.Shuliavska, Kyiv 01054, Ukraine; Ave. Vozdukhoflostsky 90, Kiev 03036, Ukraine; Additional Sanctions Information – Subject to Secondary Sanctions; Tax ID No. 252030326052 (Ukraine); Government Gazette Number 25203037 (Ukraine) [SDGT] [IFSR]. -to- DART AIRLINES (a.k.a. AIR ALANNA; a.k.a. DART AIRCOMPANY; a.k.a. DART UKRAINIAN AIRLINES; a.k.a. TOVARYSTVO Z OBMEZHENOYU VIDPOVIDALNISTYU ‘DART’; a.k.a. “ALANNA”; a.k.a. “ALANNA LLC”; a.k.a. “DART, LLC”; a.k.a. “DART, TOV”), 26a, Narodnogo Opolchenyia Street, Kiev 03151, Ukraine; Kv. 107, Bud. 15/2 Vul.Shuliavska, Kyiv 01054, Ukraine; Ave. Vozdukhoflostsky 90, Kiev 03036, Ukraine; Additional Sanctions Information – Subject to Secondary Sanctions; Tax ID No. 252030326052 (Ukraine); Government Gazette Number 25203037 (Ukraine) [SDGT] [IFSR] (Linked To: CASPIAN AIRLINES).
Typically, companies will need a Treasury license before accomplishing most aircraft parts transactions involving an SDN.  This includes transactions in which you are selling parts to a MRO that you know intends to install the parts on an aircraft belonging to, or operated by, an SDN.  The U.S. has jailed people who’ve sold aircraft parts to SDNs.  The U.S. has enforced its export regulations against non-US companies, so even non-US companies should be cautious about doing business with an SDN.
You should seek legal advice before doing business with any Specially Designated National (SDN).
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Iran Sanctions are Still Active!

Iran has reached Implementation Day – but what does this mean? We’ve been receiving a number of inquiries about Iranian sanctions.

The news media has been reporting that US sanctions against Iran have been eliminated. This is not (yet) true.  Conversations with European companies have suggested that Europe is permitting unfettered trade with Iran, and in fact Airbus announced a plan to sell 100 aircraft to Iran as soon as sanctions are formally lifted.  Iranian Transport Minister Abbas Akhoondi announced that Iran would buy 114 aircraft from Airbus.

In the U.S., there are still live sanctions against Iran (like 31 C.F.R. Part 560) that continue to preclude the sale of aircraft parts without a license.  The Treasury Department is the lead US organization for Iran sanctions.  U.S. Treasury Department regulations still prohibit the export, sale, or supply of any services to Iran, unless there is a specific exception in the regulations that permits that export, sale, or supply.  31 C.F.R. §§ 560.204, 560.204(a)(2), 560.410; see, e.g., Guidance Relating to the Lifting of Certain U.S. Sanctions Pursuant to the Joint Comprehensive Plan of Action On Implementation Day, p. 3, fn 4 and p. 38 (published jointly by U.S. Department Of The Treasury and U.S. Department Of State January 16, 2016) (reminding the reader of the general prohibition on provision of goods and services to Iran except where explicitly permitted).  So, until the restrictive regulations are removed, we should expect the government to issue specific exceptions on an occasional basis.

Treasury has published their initial plan for the abatement of sanctions – the first set of exceptions.  This abatement plan is available for public review but it is not valid until published in the Federal Register!  But the plan is primarily focused on importing food items and carpets from Iran so it is of little use to aircraft parts distributors.

Under the post-Implementation Day plan, we should not expect free trade in aircraft parts to Iran.  Instead, aircraft parts will be subject to a favorable licensing policy, similar to what they’ve enjoyed in recent years.

“[L]icenses may be issued on a case-by-case basis to authorize U.S. persons and, where there is a nexus to U.S. jurisdiction, non-U.S. persons to (1) export, re-export, sell, lease, or transfer to Iran commercial passenger aircraft for exclusively civil aviation end-use, (2) export, re-export, sell, lease, or transfer to Iran spare parts and components for commercial passenger aircraft, and (3) provide associated services, including warranty, maintenance, and repair services and safety-related inspections, for all the foregoing, provided that licensed items and services are used exclusively for commercial passenger aviation.”

This new licensing program is effective immediately under the new licensing policy.  Under the new licensing program, there will be an expectation of controls to prevent re-transfer of goods to parties on the Specially Designated Nationals (SDN) list.  The US has warned that if aircraft, goods, or services licensed for export to Iran are used for purposes other than exclusively for commercial passenger aviation, or have been transferred to SDNs, then the United States could view this as grounds to cease performing its commitments under the agreement with Iran.

Sanctions are not going away, totally.  The fact that there is a favorable licensing policy shows that the US will maintain a presumption against trade that must be overcome with licenses.  And new sanctions are always a possibility: on Sunday, the Treasury Department announced new sanctions against parties involved in Iran’s ballistic missile program (who will be added to the SDN list).

So really, for aircraft parts distributors it remains ‘business as usual.’  Treasury licenses will still be necessary for aircraft parts transactions to Iran that are subject to US jurisdiction.

Treasury Offers New Ways to Search for Export Compliance Risks

In an effort to make it easier to monitor sanctions programs, the Treasury Department has consolidated several sanctions lists.  This consolidation should make it easier to search to ensure compliance, whether you are searching on line or using a computer program to automatically research your customers.

The Treasury Department office with jurisdiction over export programs is the Office of Foreign Asset Control (OFAC).

OFAC has a list of Specially Designated Nationals (SDNs) as well as other (non-SDN) sanctions lists.  OFAC  is now offering all of its non-SDN sanctions lists in a consolidated set of data files called the Consolidated Sanctions List.  This consolidated list will include the following:

  • Non-SDN Palestinian Legislative Council List
  • Part 561 List
  • Non-SDN Iran Sanctions Act List
  • Foreign Sanctions Evaders List
  • Sectoral Sanctions Identifications List

OFAC announced that it plans to discontinue some of these lists as separate lists, so they will only be available as part of the consolidated list.

Persons seeking to check whether there are OFAC sanctions that might apply to their transaction should be sure to check their export business partners (by personal name and company name) against the Specially Designated Nationals List and the Consolidated Sanctions List

One can also use the Sanctions List Search which consolidates both lists into a single searchable database. This tool is useful because it can automatically search for names that are close (bot not exact matches) and can be set to find matches with different levels of confidence (which will then be reviewed by a human to assess whether they actually match).

Exporters should also check the details of their transaction (including destination country) against the Sanctions Programs and Country Information page, which list sanctions programs based on country and on certain other criteria.

 

Window of Opportunity for Doing Business in Iran

For a limited time, Iran could be a great source of business for the aircraft parts distribution community.

Two weeks ago, we posted about the relaxation of sanctions against Iran, particularly as those sanctions apply to civil aircraft parts.

Yesterday,  AviationPros reported that Iran will start importing aircraft parts in two weeks (this was based on a February 1 article from Trend News).  The article explains that Iran’s Civil Aviation Organization head Alireza Jahangirian has asked the Iranian National Development Fund to release $400 million to purchase aircraft parts.

The AviationPros article also carries an implicit warning for anyone who sells to Iran – it quotes Managing Director of Qeshm Airline, Hefzollah Ataherian as saying “Most of the [Iranian] airlines are indebted and their revenues are not enough to pay their debts.”  This suggests that aircraft parts sellers should be particularly cautious about the payment arrangements for parts to ensure they are among those who get paid.

Licenses from the Treasury Office of Foreign Asset Control (OFAC) are likely to be necessary for most aircraft parts being shipped to Iran. Treasury has already issued guidance on its Iran Licensing Policy; the guidance clarifies that licenses are still necessary but that “license applications will also be evaluated in light of the Iran-Iraq Arms Non-Proliferation Act and any other relevant statutes, as appropriate.”  The guidance also notes that the authority is temporary – licenses issued under this authority will expire June 20 of this year (so right now there is a limited window for these transactions).

OFAC has also released guidance explaining that the U.S. Government “will not impose correspondent or payable-through account sanctions on foreign financial institutions that … conduct or facilitate financial transactions relating to [covered aircraft parts transaction].”  One important caveat is that these payments will only be authorized if the exporting activities are initiated and completed entirely within the period covered by the agreement (the six-month period beginning on January 20, 2014, and ending July 20, 2014).

Another important factor in the payment licensing policy is that the favorable treatment of payments will only be granted if the transaction does not involve any party on the Specially Designated Nationals (SDN) list.  As a special exception, SDN-party Iran Air *is* permitted to engage in transactionsm as is any Iranian depository institution that is listed as an SDN solely pursuant to Executive Order 13599.

The Commerce Department’s Bureau of Industry and Security (BIS) has published its regulations on Iran at 15 C.F.R. § 746.7.  This section continues to impose restrictions on shipments to Iran; however it also permits a single license from OFAC to cover BIS requirements as well as OFAC requirements.  15 C.F.R. § 746.7(a)(2).  There are limitations on this authority – for example the subject of the license must be an article subject to OFAC limitations – but most aircraft parts that are licensed for export to Iran by OFAC ought to be exempt from any further licensing obligations under the BIS regulations.

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