May 19, 2020
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating China-based Shanghai Saint Logistics Limited for acting as a general sales agent (GSA) for or on behalf of Iranian airline Mahan Air. This is the seventh designation of a GSA to Mahan Air since 2018. Mahan Air is designated under counterterrorism authorities for providing support to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), as well as under a counter proliferation authority that targets weapons of mass destruction proliferators and their supporters.
“The Iranian regime is using Mahan Air to support an illegitimate and corrupt regime in Venezuela, just as it has done for the regime in Syria and for terrorist proxy groups throughout the Middle East,” said Secretary Steven T. Mnuchin. “We will not hesitate to target those entities that continue to maintain commercial relationships with Mahan Air.”
For years, Mahan Air flights have transported terrorists and lethal cargo throughout the Middle East, including to Syria to prop up the murderous Assad regime. Mahan Air is currently operating charter flights to Venezuela for Iranian technicians and technical equipment, using materials sourced from China. This scheme supports the illegitimate Maduro regime’s efforts to revive its energy production, languished by its corruption and mismanagement. The Government of Venezuela is reportedly paying for this support with gold bars directly from the Central Bank of Venezuela — gold that belongs to the Venezuelan people.
Mahan Air was designated in October 2011 pursuant to Executive Order (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 the regime’s atrocities and displacement of civilians. In December 2019, the Department of State designated Mahan Air pursuant to E.O. 13382, a counter proliferation authority targeting weapons of mass destruction proliferators and their supporters.
SHANGHAI SAINT LOGISTICS LIMITED
Shanghai Saint Logistics Limited is Mahan Air’s cargo GSA in Shanghai, providing services such as freight booking for Mahan Air flights between China and Iran. GSAs are third parties that provide services to an airline. These services range from sales, financial, administrative, and marketing support to freight reception and handling.
Shanghai Saint Logistics Limited is being designated pursuant to E.O. 13224, as amended, for having acted or purported to act for or on behalf of, directly or indirectly, Mahan Air.
Today’s action marks OFAC’s seventh designation of a Mahan Air GSA, following previous designations in 2018 and 2019, and provides 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. Those in the airline industry should conduct due diligence to avoid performing services, including GSA services, for or on behalf of a designated person, which may be sanctionable. Such activities may include freight booking, 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 or for designated Iranian airlines, many of which, including Mahan Air, are involved in facilitating the Iranian regime’s support to proxy militias and groups it supports.
As a result of today’s action, all property and interests in property of Shanghai Saint Logistics Limited 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 property or interest in property of blocked or designated persons.
In addition, persons that engage in certain transactions with Shanghai Saint Logistics Limited 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.