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Defying Sanctions, Iranian Airline with Terror Ties Buys New Planes

An Iranian airline that has been sanctioned due to ties with Iran’s Islamic Revolutionary Guard Corps has purchased nine planes in violation of existing sanctions, the Financial Times reported today. According to the report, the airline, Mahan Air, purchased the planes from European companies using a front company.

The Financial Times reported that though Western diplomats fear that the planes could be used to transport weapons to Yemen, a member of Mahan’s board said that it would use the planes to address a shortage of planes within Iran, rather than transporting weapons internationally. However, a Mahan Air plane was turned away by Saudi jets earlier this year as it headed to Yemen.

While the suspensions of some sanctions have allowed Iran to purchase spare parts for planes, the sale of planes to Iran is still prohibited by American and European sanctions.

The Financial Times called the scheme through which Mahan purchased the planes “most ambitious,” and involved using an Iraqi airline, Al Naser, to purchase the modern Airbus planes, which, in turn, were sold or transferred to Mahan. Al Naser denies that it acted on behalf of Mahan, but the Financial Times reported that a diplomat traced payments from Mahan through Gulf-based companies to purchase the planes.

Reuters and other news agencies had reported that Iran announced the purchase of 15 second-hand planes, including nine, in the past week, but provided no other details.

Mahan’s methods of setting up shell companies to mask purchases of sanctioned products was documented by Emanuele Ottolenghi in Iran is *Really* Good at Evading Sanctions, which was published in the September 2013 issue of The Tower Magazine.

What is certain is that most of these businesses are based in Düsseldorf, with a few in nearby locations such as Nettetal and Cologne. There is little doubt, then, that Düsseldorf looms large in Iran’s calculations. Alongside Cologne, Frankfurt, and Hamburg, it is a flight destination for two Iranian airlines—Iran Air and Mahan Air. Mahan Air is under U.S. sanctions for ferrying Revolutionary Guards’ Qods Force operatives and weapons to war-torn Syria. Predictably, Mahan has a network of companies based in Düsseldorf working to circumvent the U.S. embargo on airplane spare parts. And just as predictably, U.S. sanctions have thus far failed to stop them.

A temporary denial order issued by the U.S. Department of Commerce in 2011 against Mahan employees and front companies shows that sometimes the good guys win. But Iran keeps trying. It is working to establish an airline in Germany with direct flights to Iran. An Iranian company has tried to buy a low-cost European airline. In another case, a private airline based in Europe was bought by Iranian investors suspected of links to the regime. It flies to both Tehran and Düsseldorf. …

Because sanctions are getting tougher and the corporate world is becoming more alert, Iranian procurement agents need to be more creative and their operations more elaborate in order to elude Western authorities. That is why Mahan has sought to buy technology from the United States through a string of front companies. That is why MCS’s elaborate network included a company in Croatia and its sales went through a Dubai-based front company.

[Photo: Loran / YouTube ]