US Treasury targets Iran's aviation sector with sweeping new sanctions

The United States on Tuesday issued 36 fresh Iran-related sanctions targeting Iran's aviation sector and other companies as part of a broad push to escalate economic pressure on Tehran as the war in the Middle East entered a seventh month.

The U.S. Treasury Department said the action aims to ground Iran's Mahan Air, already sanctioned by the U.S. and the European Union, and all other Iranian airlines. The sanctions also targeted covert front companies, foreign intermediaries and deceptive trans-shipment routes that Washington claims Iran relies on to obtain U.S.-origin aircraft and sensitive technology.

The Treasury also issued an alert asking financial institutions to report any procurement networks supporting Iran's aviation industry, while designating firms based in Turkey and the United Arab Emirates that it said helped Tehran procure U.S.-origin aircraft and sensitive technology.

Treasury's Office of Foreign Assets Control also suspended three Iran-related aviation authorizations that allowed overflights and permitted non-U.S. airlines to fly U.S.-origin or U.S.-controlled commercial aircraft into Iran.

Tuesday's actions marked a sharp escalation of the Trump administration's renewed push to squeeze Iran's economy and pressure Tehran to loosen its chokehold on the Strait of Hormuz. A U.S. ‌naval blockade and tougher sanctions are curbing oil exports, restricting access to foreign currency and exposing growing strains in the economy.

Treasury said any foreign firm or individual aiding Iranian airlines through aircraft transfers, cargo services or general sales agent support would face serious consequences.

U.S. Treasury Secretary Scott Bessent last week had warned that the Trump administration was eyeing airlines as possible sanctions targets along with digital assets and the maritime industry.

”Under Operation Economic Outcast, we promised severe consequences for those providing financial lifelines to the Iranian regime,” Bessent said in a statement on Tuesday. "Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system."

The U.S. Treasury has repeatedly targeted global networks supporting Mahan Air. In July, Treasury designated six entities and individuals in China, India, Russia and Iran, including several firms that act as sales agents for the U.S.- and EU-sanctioned airline. Washington first sanctioned Mahan in 2011 over support it provided to Iran's Islamic Revolutionary Guard Corps.

In 2020, Washington imposed sanctions on a China-based company it accused of acting on behalf of Mahan Air.

On Tuesday, Treasury designated 27 Iranian airlines, as well as several firms based in Turkey and the United Arab Emirates, for helping Mahan Air secure at least three Boeing B-777 aircraft this summer that had been retired elsewhere.

It also hit UAE-based Egyptian citizen Ibrahim Ali Mohamed Mohamed Mahran, the chief executive of ECT Aviation Support, as well as the British unit of the firm.

OFAC also imposed sanctions on two firms based in Turkey and Malaysia that it said had serviced Mahan Air's international flights and coordinated cargo shipments.

As a result of the sanctions, all property and interests of the designated firms and individuals that are in the U.S. will be blocked and must be reported to OFAC. Violations of sanctions can result in criminal and civil penalties.