February 4, 2016 | The Wall Street Journal Europe

Flying in the Face of U.S. Sanctions

Mahan Air is an Iranian passenger airline that also happens to be a favorite with the country’s Islamic Revolutionary Guard Corps. The IRGC uses Mahan planes to ferry weapons and personnel to aid the Syrian regime. That’s according to the U.S. government, which has repeatedly committed itself to grounding the airline. Yet Mahan continues to fly the friendly Middle East skies and is even expanding its operations.

Of all Iranian entities still under U.S. sanctions, Mahan is arguably the most significant. The U.S. Treasury sanctioned it in October 2011 for “providing financial, material and technological support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)” and for providing transportation services to Iran’s Lebanese terror proxy, Hezbollah. In October 2012, Treasury blacklisted 117 Iranian commercial planes, including all of Mahan’s aircraft, because “Iran used Iran Air and Mahan Air flights between Tehran and Damascus to send military and crowd control equipment to the Syrian regime.”

The Islamic Republic continued to rely on civilian aircraft to supply the Assad regime throughout the talks leading to last year’s nuclear deal. A Western intelligence report leaked to Reuters in 2012 confirmed that Mahan was at the center of the IRGC airlift to the Assad regime. So has a United Nations panel in charge of monitoring implementation of international sanctions against Iran.

Treasury in 2012 raised concerns about Mahan violations of civil-aviation rules, including the use of “a combination of passenger and cargo flights and declaring illicit cargo as humanitarian and other licit goods.” Nearly five years into Syria’s civil war, Mahan continues to offer the IRGC steady logistical support. In late July, Qods Force commander Qasem Soleimani flew to Moscow to enlist Russian support for a counteroffensive to salvage the Syrian regime’s corridor from the capital, Damascus, to Latakia and Tartous, the two Mediterranean port cities housing Moscow’s naval bases.

Shortly thereafter, Mahan flights to Syria increased. Since August, my own flight tracking counted almost daily trips from Tehran to Damascus or Latakia. Syria-bound Mahan flights have also occasionally stopped in Baghdad, most recently on Jan. 9, despite pleas by the Obama administration to the Iraqi government to close its airspace to Iranian arms shipments to Syria. These flights aren’t on Mahan’s regular schedule. Tickets for Tehran-Damascus routes aren’t routinely available for sale. Nor do the flights appear on published airport schedules.

Publicly available tracking information shows the same Mahan planes flying to commercial destinations within hours of their return from Damascus. An airline that, according to U.S. Treasury, delivers IRGC arms to Syria also flies to Gulf Arab states that supposedly oppose Iranian expansionism. Rather than shrinking due to the carrier’s supporting role in the Syrian civil war, Mahan’s international route network is expanding. It already introduced three flights to Russia last summer and plans to add new routes to Europe as European sanctions against Iran are lifted.

After last summer’s nuclear deal with Tehran, the Obama administration kept Mahan under sanctions. In Senate testimony shortly after the accord was signed, Acting Under Secretary of Treasury for Terrorism and Financial Intelligence Adam Szubin warned that regardless of the agreement, “a foreign bank that conducts or facilitates a significant financial transaction with Iran’s Mahan Air . . . will risk losing its access to the U.S. financial system.”

These were empty words. If the administration were serious, Mahan would be grounded by now. Instead, its international routes are expanding. Worse, on Jan. 16, the White House agreed to lift an Interpol red notice against Mahan’s chief executive and a senior manager whom the U.S. Treasury said was responsible for the airline’s sanctions-evasion operations. Such a move may have few consequences on paper, but it will make Mahan’s life easier, not harder, as was the sanctions’ original purpose.

The fact that Mahan can fly the IRGC to Damascus and, the next day, use the same planes to land in Milan, Munich or Stockholm speaks volumes to the lack of U.S. leverage to enforce sanctions. Only Saudi Arabia and Bahrain have thus far halted flights to and from Iran. That drastic step came in response to the ransacking of the Saudi embassy in Tehran and its consulate in Mashhad last month and had nothing to do with enforcing U.S. sanctions against Mahan’s support role in Syria.

To restore credibility, Treasury should take immediate action against those financial institutions that transact on Mahan’s behalf in Asia, Europe and the Gulf, and should slap heavy fines on European and Asian ground-service companies working with the airline. To pay for such services, Mahan needs, and likely receives, access to financial services in the countries in which it flies. The ground services it hires are indispensable to Mahan’s operations. The airline would be forced to cancel routes if such services were no longer available.

Mr. Ottolenghi is a senior fellow at the Washington-based Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance. Follow him on Twitter @eottolenghi

Issues:

Iran Iran Sanctions Syria