U.S. Expands Aviation Sanctions on Iran, Targeting Foreign Entities Supporting Mahan Air

The aviation sanctions form a significant part of the Trump Administration's "Operation Economic Outcast," which the White House has described as "an unprecedented campaign to sever every remaining economic lifeline sustaining the Islamic Republic of Iran." As negotiations have stalled, and with the U.S. and Iran engaged in active hostilities once more, the economic pressure is intended to push Tehran into a deal to end the war.

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 27 Iranian airlines, accusing them of having "long supported the Iranian regime’s destabilizing activities." The sweeping measures were largely focused on grounding Mahan Air, which was first sanctioned by the U.S. in 2011 and is also subject to E.U. sanctions. The carrier has long been accused of transporting personnel, equipment, and funds for Iran’s Islamic Revolutionary Guards Corps (IRGC).

The U.S. also designated firms based outside of Iran that it said had helped Mahan Air maintain operations by providing goods or services. This action specifically targets "covert front companies, foreign intermediaries, and deceptive transshipment routes that Iran relies on to obtain U.S.-origin aircraft and sensitive technology," according to the Treasury.

The sanctions, and their international reach, are intended to "intensify Iran's economic isolation, to further degrade their military capability, and push them to some kind of a concession or settlement that favors the United States," Jack Roush, a PhD candidate affiliated with the Iranian History Initiative at the London School of Economics, tells TIME.

The U.S. Treasury has accused Iran of using front companies and other pass-through entities in third countries in an attempt to evade aviation links back to Tehran and has extended sanctions to nine internationally-based entities it alleges have aided these efforts.

Four cargo providers and general sales agents were also sanctioned, accused of servicing Mahan Air and coordinating shipments on behalf of the airline. Two are based in Turkey, one in Kazakhstan, and one in Malaysia.

With the reliance on foreign entities to maintain Iran’s aging fleet, the measures targeting companies outside of Iran will likely damage Tehran’s aviation capabilities, she says, as it will "restrict Iran's ability to rely on those regional hubs" and could prompt "international carriers [to] further reduce or suspend Iranian services."

The U.S. Treasury has vowed to isolate any international entity that continues to show support to Mahan Air. "Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned," Bessent said. "You are at risk of being cut off from the global financial system."

On. Aug. 28, the U.S. moved to cut off Egyptian Banque Misr's UAE-located branches from the dollar-based financial system. Banque Misr said it is reviewing the notice from the U.S. Treasury and will communicate with the department "to obtain further information and maintain ongoing cooperation."

The charges—referred to by Turkish President Recep Tayyip Erdoğan as "ugly"—dragged on for years, before a settlement was reached in March. Halkbank was barred from entering transactions that benefit Iran and had to hire a compliance monitor to review its sanctions and anti-money-laundering programs.

Republican Sen. Rick Scott of Florida earlier this week said "Turkey is not our friend" as he showed support for the sanctions targeting firms in the country. "Bessent had to crack down on them for actively funding Iranian terrorists," he claimed.

How corporations in other countries respond to the U.S. measures "is an important test" for the Trump Administration, Roush says, noting that despite Washington’s crackdown on international entities supporting the Iranian economy, some have shown they’re willing to continue doing business with Tehran.

"A lot of these smaller, more boutique firms… They're more informal. They tend to continue their trade ties or banking ties with Iran. The UAE has done, or well, they're trying to do a good job of severing these ties with Iran, but other states in the region, like Iraq and Azerbaijan and Turkey, are continuing to trade with Iran," says Roush. "Iran is an important trading partner for them, and I think it's going to take a significant amount of diplomatic pressure to impose some kind of a full blockade of Iran."

"After 47 years of sanctions, the U.S. went to war with Iran on behalf of Israel. The fallout has been disastrous for America, including its standing worldwide," he said Tuesday. "After failing to achieve its aims through sanctions or war, Washington’s ‘novel’ solution is… more sanctions. Seriously?"