May 26, 2020 | Policy Brief

Treasury Sanctions China-based Logistics Company Supporting Mahan Air

May 26, 2020 | Policy Brief

Treasury Sanctions China-based Logistics Company Supporting Mahan Air

The U.S. Department of the Treasury last week sanctioned Shanghai-based Saint Logistics Company, a Chinese general sales agent for the U.S.-sanctioned Iranian airline Mahan Air. The move marks a warning to China that it should stop aiding the regimes of Venezuela’s Nicolás Maduro and Syria’s Bashar Assad, which have relied on the airline to further their malign conduct.

Iran recently sent a lifeline to the Maduro regime, providing much-needed technical assistance, products, and components to restore oil refining capacity at the Paraguaná complex on the western coast of Venezuela. Iran delivered its aid, which the Maduro regime paid for by shipping gold bars from Venezuela Central Bank reserves back to Tehran, during a two-week airlift by Mahan Air. According to the United States, Iran bought the supplies in China and flew them back to Tehran with Mahan planes.

A review of flights from Shanghai to Tehran during the past three months, relying on FlightRadar24 data, shows that the same Mahan aircraft that flew the Shanghai-Tehran route also flew the Tehran-Las Piedras route. These aircraft may even be responsible for spreading the COVID-19 pandemic from China to Iran.

Last week’s action marks the seventh time since 2018 that Treasury has sanctioned a sales agent for Mahan. When Treasury sanctioned a Thai sales agent for Mahan in July 2018, Treasury Secretary Steve Mnuchin warned that other companies should “sever all ties and distance themselves immediately from this airline. Companies that continue to service Mahan aircraft, or facilitate Mahan flights in and out of airports in Europe, the Middle East, and Asia, are on notice that they do so at great financial risk.”

The United States first imposed terrorism sanctions on Mahan Air in 2011, expanding them gradually as Mahan provided Syria’s Assad with manpower and weapons to fuel his slaughter of Syrians that sought to displace him. As Mnuchin said, Mahan helped Iran with “facilitating its support to terrorism across the Middle East. Mahan’s regular flights to Syria are used to prop up the Assad regime and deliver weapons, foreign fighters, and Iranian operatives who sow violence and unrest across the region.”

The designation of a Chinese company is noteworthy on its own, as tensions between Beijing and Washington ramp up. China has long held a transactional view of business ties with the regimes in Syria and Iran. The White House should not be shy about sending more tough messages to Beijing if it continues to aid these regimes.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Emanuele and CEFP, please subscribe HERE. Follow Emanuele on Twitter @eottolenghi. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

China Iran Iran Global Threat Network Iran in Latin America Iran Sanctions Iran-backed Terrorism Sanctions and Illicit Finance Syria