Markets Wired

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated an Iranian shipping network involved in smuggling lethal aid from Iran to Yemen on behalf of the Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF).  Last month, the U.S. government seized weapons smuggled on a small boat destined for Yemen.  Today’s action against this lethal aid network is yet another example of the U.S. government cutting off all avenues for the delivery of weapons to Houthi rebels.  OFAC is also designating three Mahan Air general sales agents (GSA) based in the United Arab Emirates and Hong Kong.  Treasury designated Iranian airline Mahan Air in 2011 for support to the IRGC-QF and today the Department of State designated Mahan Air pursuant to Executive Order (E.O.) 13382 – which targets weapons of mass destruction proliferators and their supporters.
 
“The Iranian regime uses its aviation and shipping industries to supply its regional terrorist and militant groups with weapons, directly contributing to the devastating humanitarian crises in Syria and Yemen,” said Secretary Steven T. Mnuchin.  “Aviation and shipping industries should be vigilant and not allow their industries to be exploited by terrorists.”
 
For years, the IRGC-QF has used Abdolhossein Khedri and firms under his control to support maritime weapons smuggling operations.  Today’s designations were taken pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorists and those providing support to terrorists or acts of terrorism.
 
ABDOLHOSSEIN KHEDRI NETWORK
 
For over ten years, Iranian businessman Abdolhossein Khedri had been involved in shipping operations for the IRGC-QF.  Since 2018, Abdolhossein Khedri used his companies, Khedri Jahan Darya Co. and Maritime Silk Road LLC, as well as vessels owned by Khedri Jahan Darya Co., to support the IRGC-QF’s smuggling operations.
 
Khedri is being designated pursuant to E.O. 13224 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF.
 
Khedri Jahan Darya Co is a shipping line that operates out of Iran, and is the registered owner, ship manager, and commercial manager of the merchant vessels Genava 11 and Genava 12. The Genava 12 was suspected of involvement in the transport of IRGC-QF cargo from Iran, ultimately destined to Yemen.
 
Khedri Jahan Darya Co is being designated pursuant to E.O. 13224 for being owned, controlled, or directed by Abdolhossein Khedri.  Furthermore, the Genava 11 and Genava 12 are being identified as property in which Khedri Jahan Darya Co. has an interest.
 
Maritime Silk Road LLC is a shipping company which, between 2015 and 2017, used the Genava 12 to ship cargo for an IRGC-QF-affiliated company.  Maritime Silk Road LLC is being designated pursuant to E.O. 13224 for being owned, controlled, or directed by Abdolhossein Khedri. 
 
MAHAN AIR GENERAL SALES AGENTS
 
Mahan Air was designated in October 2011 pursuant to E.O. 13224 for providing financial, material, or technological support for or to the IRGC-QF.  Mahan Air has transported IRGC-QF operatives, weapons, equipment, and funds abroad in support of the IRGC-QF’s regional operations, and has also moved weapons and personnel for Hizballah.  Since the onset of the Syrian civil war, Mahan Air has routinely flown fighters and materiel to Syria to prop up the Assad regime, which has contributed to mass atrocities and displacement of civilians.
 
OFAC is taking action against three Mahan Air GSAs in markets across the Middle East and Asia, entities that prop up Mahan Air’s commercial operations. GSAs are third parties that provide services to an airline under the airline’s brand.  These services range from sales, financial, administrative, and marketing services to freight reception and handling.
 
Gatewick LLC is Mahan Air’s freight and cargo GSA in Dubai, and is being designated pursuant to E.O. 13224 for having acted on or purported to act for or on behalf of, directly or indirectly, Mahan Air.
Jahan Destination Travel and Tourism LLC is Mahan Air’s ticketing GSA in Dubai, and is being designated pursuant to E.O. 13224 for having acted on or purported to act for or on behalf of, directly or indirectly, Mahan Air.
Gomei Air Services Co., Ltd. is a Mahan Air GSA in Hong Kong and the southern Chinese cities of Shenzhen and Guangzhou.  Gomei Air Services is being designated pursuant to E.O. 13224 for having acted on or purported to act for or on behalf of, directly or indirectly, Mahan Air.
 
These designations follow previous designations in 2018 and 2019 of Mahan Air GSAs and provide another warning to the international aviation community of the sanctions risk for individuals and entities that choose to maintain commercial relationships with Mahan Air and other designated airlines.  In addition to GSA services such as ticketing and freight booking, the industry should conduct due diligence for other activities that, when conducted for or on behalf of a designated person, may be potentially sanctionable.  Such activities may include reservation and ticketing services, procurement of aircraft parts and equipment, maintenance contracts, airline grounds services, catering, interline transfer or codeshare agreements, and refueling contracts.
 
On July 23, 2019, OFAC issued an advisory to inform the civil aviation industry of potential exposure to U.S. government economic sanctions for providing unauthorized support to designated Iranian airlines, many of which, including Mahan Air, are involved in facilitating the Iranian regime’s support to proxy militias.
 
SANCTIONS IMPLICATIONS
 
As a result of today’s action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.  OFAC’s regulations generally prohibit all dealing by U.S. persons or within (or transiting) the United States that involve and property or interest in property of blocked or designated persons.
 
In addition, persons that engage in certain transactions with the persons designated today may themselves be exposed to designation.  Furthermore, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for individuals and entities designated in connection with Iran’s support for international terrorism or any Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons could be subject to U.S. correspondent account or payable-through account sanctions.
 
For more information on the individual and entities designated today.
 

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