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February 4, 2016

BIS Denies Export Privileges of UK-Based Company for Attempted Reexport of Aircraft to Iran

*On March 9, 2016, BIS published in the Federal Register an amended order removing AF-Aviation Limited and Andy Farmer from the scope of the January 19, 2016 temporary denial order and adding moreJet Ltd, Stefan Piotr Kondak, and AC AVIATIE UK Limited. BIS amended the order a second time on June 15, 2016, to remove moreJet Ltd. and Stefan Piotr Kondak.

On January 19, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) temporarily denied the export privileges of, among others, AF-Aviation Limited, a ferry flight service provider headquartered in the UK, based on evidence of an imminent violation of the Export Administration Regulations (EAR) involving the reexport of two Boeing 737 aircraft from Romania to Iran without the required U.S. government authorization. The aircraft are subject to the EAR and controlled for anti-terrorism reasons.

BIS may issue a temporary denial order upon a showing that the order is necessary in the public interest to prevent an imminent violation of the EAR. In addition to BIS’ evidence supporting that AF-Aviation had imminent plans to reexport the aircraft, BIS noted that “publically available aviation databases” also corroborated that the aircraft were destined to Caspian Airlines, a Specially Designated Global Terrorist,[1] in Iran. The aircraft are currently registered in Gambia and owned by a Gambian company, Ribway Airlines Company Limited. Ribway is also subject to the denial order. U.S. and foreign companies are prohibited from engaging in any transactions with AF-Aviation, Ribway, and three UK individuals (Andy Farmer, John Edward Meadows, and Jeffrey John James) involving items subject to the EAR for 180 days from the date of the order.

It is worth noting that, even after the recent easing of certain U.S. sanctions on Iran, all persons, regardless of nationality, continue to be prohibited from reexporting from a third country items containing 10% or more U.S.-controlled content if undertaken with knowledge or reason to know that the reexportation is intended specifically for Iran or the Government of Iran. In addition, U.S. sanctions on Iran continue to prohibit U.S. and foreign persons from conducting transactions with any Iranian or Iran-related individuals and entities who, like Caspian Airlines, remain on the SDN List.

[1] The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Caspian Airlines to its Specially Designated Nationals and Blocked Persons List (SDN List) in August 2014.