Treasury issued sweeping new sanctions against Iran on Tuesday, targeting the country’s airlines and their international service providers as it ramps up its effort to isolate Tehran from the global economy. The aviation sanctions form a significant part of the Trump Administration's ”Operation Economic Outcast,” which the White House has described as “an unprecedented campaign to sever every remaining economic lifeline sustaining the Islamic Republic of Iran.” As negotiations have stalled, and with the U.S. and Iran engaged in active hostilities once more, the economic pressure is intended to push Tehran into a deal to end the war. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 27 Iranian airlines, accusing them of having “long supported the Iranian regime’s destabilizing activities.” The sweeping measures were largely focused on grounding Mahan Air, which was first sanctioned by the U.S. in 2011 and is also subject to E.U. sanctions.
The carrier has long been accused of transporting personnel, equipment, and funds for Iran’s Islamic Revolutionary Guards Corps (IRGC). The measures build on OFAC’s April and July actions “targeting persons servicing Mahan Air’s domestic and international flights,” Treasury Secretary Scott Bessent said. The U.S. also designated firms based outside of Iran that it said had helped Mahan Air maintain operations by providing goods or services.
This action specifically targets “covert front companies, foreign intermediaries, and deceptive transshipment routes that Iran relies on to obtain U.S.-origin aircraft and sensitive technology,” according to the Treasury. The OFAC also suspended three Iran-related aviation authorizations that “allowed for overflights, and for non-U.S. airlines to fly U.S.-origin or U.S.-controlled commercial aircraft into Iran.” The sanctions, and their international reach, are intended to "intensify Iran's economic isolation, to further degrade their military capability, and push them to some kind of a concession or settlement that favors the United States,” Jack Roush, a PhD candidate affiliated with the Iranian History Initiative at the London School of Economics, tells TIME. Here’s what to know about the latest sanctions, how they extend beyond the borders of Iran, and the economic pressure mounting against Tehran.
Treasury has accused Iran of using front companies and other pass-through entities in third countries in an attempt to evade aviation links back to Tehran and has extended sanctions to nine internationally-based entities it alleges have aided these efforts. Measures were imposed on two UAE-based commercial entities and a UAE-based individual, as well as one Turkish-based and one U.K.-based firm. Four cargo providers and general sales agents were also sanctioned, accused of servicing Mahan Air and coordinating shipments on behalf of the airline.
Two are based in Turkey, one in Kazakhstan, and one in Malaysia. The new sweeping sanctions “will exacerbate challenges that Iran already faces in maintaining its fleet,” says Sanam Vakil, director of the Middle East and North Africa programme at Chatham House. With the reliance on foreign entities to maintain Iran’s aging fleet, the measures targeting companies outside of Iran will likely damage Tehran’s aviation capabilities, she says, as it will “restrict Iran's ability to rely on those regional hubs” and could prompt “international carriers [to] further reduce or suspend Iranian services.” “If that happens, then this becomes a blockade of Iran's aviation infrastructure, which is quite serious,” says Vakil.
Treasury has vowed to isolate any international entity that continues to show support to Mahan Air. Aug. 28, the U.S. moved to cut off Egyptian Banque Misr's UAE-located branches from the dollar-based financial system. Banque Misr said it is reviewing the notice from the U.S.
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