Washington Delists Iraqi Airline With Alleged Iran Guards Links From Sanctions

The United States on Wednesday lifted sanctions on Iraqi airline Fly Baghdad, removing the carrier and two of its aircraft from the US sanctions list more than two years after it was designated over alleged links to Iran's Islamic Revolutionary Guard Corps (IRGC). The decision follows an administrative review conducted by the US Treasury Department, although sanctions remain in place against Basheer Abdulkadhim Alwan al-Shabbani, the individual previously identified by Washington as the airline's owner. The move marks a significant development for the Iraqi carrier, which had faced restrictions on its international operations since being sanctioned in January 2024.

In an update to its sanctions database, the US Treasury confirmed that Fly Baghdad and two of its aircraft had been removed from the sanctions list. However, the department maintained sanctions against al-Shabbani, indicating that the decision applied specifically to the airline rather than to all individuals previously associated with it. The Treasury did not announce any broader changes to its sanctions regime targeting Iran or organisations linked to the IRGC. As a result, existing restrictions against the IRGC, its Quds Force and numerous affiliated entities remain fully in force despite the latest action involving the Iraqi airline.

The United States had originally designated Fly Baghdad, its aircraft and al-Shabbani in January 2024, alleging that the airline had provided support to the IRGC's Quds Force and Iran-backed proxy groups operating in Iraq, Syria and Lebanon. According to US authorities at the time, the airline was accused of facilitating the movement of personnel, weapons and other logistical support for groups aligned with Iran. Those allegations formed the basis for the sanctions, which effectively cut the airline off from the US financial system and imposed restrictions on entities conducting business with it. The airline had denied wrongdoing following the designation.

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A US Treasury official, speaking to AFP on condition of anonymity, said the sanctions were lifted after Fly Baghdad completed the department's administrative reconsideration process. Under US sanctions regulations, designated companies and individuals have the right to request a review of their designation by submitting evidence or demonstrating that circumstances have changed since the original decision. Following such a review, the Treasury Department can decide to uphold, amend or remove sanctions if it determines that the legal criteria for designation are no longer met. The official did not elaborate on the specific reasons that led to Fly Baghdad's removal from the sanctions list.

The decision is expected to provide relief for Fly Baghdad by easing restrictions that had complicated its commercial operations and international business activities. Sanctions imposed by the United States can have far-reaching consequences beyond direct dealings with American institutions, as international banks, insurers and aviation service providers often avoid transactions involving sanctioned entities to minimise legal and financial risks. Removal from the sanctions list could therefore improve the airline's ability to access financial services, secure commercial partnerships and expand its operations, although challenges may remain depending on the policies of individual countries and companies.

The United States continues to maintain extensive sanctions targeting Iran's Islamic Revolutionary Guard Corps and its Quds Force, which Washington accuses of supporting armed groups and militant organisations across the Middle East. The latest action concerning Fly Baghdad does not represent a broader shift in US policy towards Iran or its regional allies but reflects the outcome of a specific administrative review concerning the Iraqi carrier. While the airline has now been removed from the sanctions list, the continued designation of al-Shabbani underscores that the Treasury Department has not lifted restrictions on all parties previously linked to the case. The development nevertheless highlights that entities placed under US sanctions can seek reconsideration through established legal procedures, with outcomes determined on the basis of evidence and compliance with the department's regulatory framework.

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