Iranians used Malta to buy planes and bypass US sanctions

An Iranian airline that is under US sanctions for supporting Syrian president Bashar al-Assad and the Lebanese militant group Hezbollah, used a Maltese leasing company as part of its strategy to acquire four planes.

According to various testimonies to the US Congress from an American think tank, Mahan Air used Malta to circumvent US sanctions.

Mahan Air, a private airline with ties to the Islamic Revolutionary Guard Corps, has been hit with US sanctions three times since the Syrian civil war broke out in 2011, in an attempt to discourage it from transporting troops and weapons to Syria’s battlefield. 

However, the Foundation for Defence of Democracies (FDD), a US-based think-tank, warned in a recent report to Congress that Mahan Air had found a way to circumvent these sanctions through a network of front companies in various jurisdictions. 

The report states that Hi Fly Malta – a Maltese subsidiary of the Portuguese charter airline Hi Fly – had purchased four Airbus planes from British airline leasing companies between 2013 and 2015. The subsidiary was incorporated in Malta in January 2013.

Shortly afterwards, they were transferred to Al-Naser Airlines – an Iraqi regional airline that effectively acted as an intermediary for Mahan Air. 

Indeed on 8 May, 2015, Al-Naser sold these four planes – along with five others – to Mahan Air, allowing the Iranian airline to acquire aircraft in violation of US sanctions. 

According to the report, there is no indication that Airbus, Hi Fly Malta, or any other European companies that had owned or leased the planes prior to their sale to Al-Naser were aware of the Iraqi airline’s intention to sell the planes to Mahan Air. 

The US Treasury Department sanctioned Al-Naser a few weeks after it sold the planes to Mahan Air, but the FDD warned that this action came too late as Mahan is currently operating all nine aircraft on both European and Asian routes. Attempts by the US to curb Mahan Air’s commercial operations outside Iran, including in friendly Nato countries, Gulf states and Asian partners, have not succeeded.

New laws are now being proposed in the US senate to crack down on Mahan Air, by requiring that Congress is provided with a list of all airports where the commercial carrier has landed. It comes at a time when national flag carrier Iran Air is in the process of hammering down multi-billion dollar deals with Boeing and other major plane builders.

Irisl hide-and-seek

Malta was once the Mediterranean transit hub of Iranian national shipping line Irisl en route to Europe before trade was cut due to intensified sanctions in 2010.

When sanctions hit the shipping line, Iran used the Hafiz Darya Shipping Lines (HDS) to take over the Islamic Republic of Iran Shipping Lines’ operations, by privatizing the ships and changing their names in a bid to circumvent sanctions from the UK, the USA and the EU against it.

Malta became the centre of a network of shell companies that Irisl used to stash its vessels, with at least 20 companies registered at various Maltese addresses whose principals were actually Irisl officials.

Using HDS as the shipping line managing the fleet, the Irisl vessels became Malta-flagged under ownership of different Malta-resident companies, and their names were changed from their Iranian appellations into English-sounding names.

The sanctions were lifted in January 2015 when the EU General Court annulled the restrictive measures.