US Targets Iran's Aviation Sector With New Sanctions

Key facts

• The US Treasury Department sanctioned 27 Iranian airlines and 36 total targets on September 8.
• This is the first time Washington has used a new determination to sanction Iran's remaining airlines.
• The sanctions aim to cut off Iran's access to international trade and finance.
• Foreign companies and individuals accused of helping Iran's aviation sector procure parts and aircraft were also targeted.
• Mahan Air, previously sanctioned, was identified as receiving aircraft through intermediaries in the UAE and Oman.
• Three Iran-related aviation authorizations were suspended, impacting overflights and non-US carriers using US-origin aircraft.

The United States has escalated its pressure campaign against Iran by imposing sanctions on all of the country's remaining active airlines, alongside foreign companies and an individual accused of facilitating their access to global markets. The Treasury Department announced on September 8 that 36 targets, including 27 airlines, were designated under a new August 24 determination aimed at severing Iran's economic lifelines.

Treasury Secretary Scott Bessent stated that the action serves as a warning to any entity doing business with these airlines, risking their exclusion from the global financial system. State Department spokesman Tommy Pigott affirmed the commitment to shutting down the Iranian regime's financial lifelines, including the aviation sector, as part of President Donald Trump's 'Operation Economic Outcast'.

The sanctions extend beyond Iranian carriers to target a network of foreign entities that allegedly assisted Mahan Air, a sanctioned airline since 2011, in acquiring aircraft and operating international flights. Washington accuses Mahan Air of providing logistical support to Iran's Islamic Revolutionary Guards Corps (IRGC). The Treasury noted that Mahan Air received at least three Boeing 777 aircraft this summer through intermediaries in the United Arab Emirates and Oman, specifically naming UAE-based ECT Aviation Support and Turkey-based Sky Phoenix.

Other foreign companies targeted include Malaysia-based iCargo, Kazakhstan-based Tour Invest, and Turkish firms MES Cargo and S Sistem Logistics, which allegedly provided various services to Mahan Air, including coordinating shipments of drone components and industrial equipment. Kerri Bitsoff, a former senior official at the US Treasury's Office of Foreign Assets Control, highlighted the broad impact of these measures, given the global aviation industry's reliance on US-origin equipment and technology.

Bitsoff explained that nearly every commercial aircraft globally is of US origin or uses US-controlled engines and avionics, making the sanctions highly impactful. She added that direct air links were among Iran's remaining channels for moving gold, hard currency, IRGC personnel, weapons, and dual-use components, especially as maritime routes face restrictions and Gulf countries reduce trade.

In conjunction with the designations, Treasury suspended three Iran-related aviation authorizations, impacting permissions for overflights and the operation of US-origin aircraft by non-US airlines. Brett Erickson, a sanctions expert, characterized the move as a significant escalation, likening it to a naval blockade combined with airspace closure to impede Iran's economic activities. The Financial Crimes Enforcement Network (FinCEN) also issued an alert to financial institutions to be vigilant against Iranian procurement networks using front companies in third countries to acquire aircraft and parts.