EXCLUSIVE: How sanctioned airlines in Iran and Syria outfoxed the US and won

Trump To Meet With Kazakhstan's Nazarbaev At White House

On April 13 last year an unmarked wide-body passenger jet slowly climbed out of Sanford International Airport near Orlando, Florida, its four engines roaring as it set course across the Atlantic Ocean to Kazakhstan’s commercial hub, Almaty.

This seemingly straightforward delivery flight would stir up severe political turbulence, although largely out of the public eye: a reported diplomatic snafu between United States and Kazakhstan, the arrest of senior government officials in Chad, and most significantly — questions about the willingness of US President Donald Trump’s administration to enforce its own sanctions regime against Iran and Syria.

Why? Because Kazakhstan was merely a waypoint on the serpentine journey of the Airbus A340-300, owned at the time of export by an anonymous trust held in a regional Utah bank.

Almost a year later its true destination would be revealed — Damascus, Syria’s war-torn capital.

The originally US-owned jetliner now plies the skies in the fleet of Syrian Arab Airlines, a company sanctioned to the hilt by both the United States and European Union as a branch of President Bashar Al-Assad’s regime.

The US Treasury suspects the Syrian airline of ferrying “mortars, small arms, rockets, and light anti-aircraft guns” from Iran to Syria on behalf of Iran’s Revolutionary Guards Corps (IRCG), the paramilitary behemoth — designated as a terrorist organization by Trump in October — that has spearheaded Tehran’s effort to bolster embattled Syrian President Bashar Al-Assad.

Mahan Air, a privately-owned Iranian carrier with a worldwide network, was also slapped with sanctions in 2011 on similar charges, which it has denied.

Yet that airline’s fleet, too, was boosted in February 2017 when two more A340s, stored for almost a decade at Athens airport, would improbably lumber into the skies and Mahan’s ownership.

Doing business with either company is a risky proposition for US and foreign entities, who can face eye-watering civil penalties and secondary sanctions that aim to cripple their ability to do business in the US or with US citizens.

But only if they are caught.

Through government documents, industry databases, interviews and local media reports i24NEWS has pieced together how during the last two years Iran outfoxed Western sanctions to procure the three aircraft and very nearly a fourth, seemingly with the help of accomplices around the world.

Despite two of the jetliners being US-owned, and the involvement of firms registered in the United Arab Emirates — a key ally of Washington’s — there is no evidence that any action has been taken against the companies or individuals involved in the transactions.

The US has been silent on all four cases, despite the White House touting its hard-line stance on Iran and a bipartisan push to rally support for a bill that would lever new, harsher sanctions on Mahan.

A spokesman for the US Treasury said the department does not comment on “prospective actions or [Office of Foreign Asset Control] investigations, including to confirm whether or not one exists. We don’t speculate on the individual application of sanctions.”

“The US takes actions as appropriate against foreign persons providing support to designated individuals and entities,” the spokesman added, noting that in September the Treasury hit two Ukrainian carriers with sanctions over their support for sanctioned Iranian and Iraqi airlines.

The Department of Commerce’s Office of Export Enforcement (OEE) must submit an order every six months to deny export privileges to Mahan Air and associated entities, and track the airline’s ongoing plane-purchasing efforts. Yet the OEE’s last two orders make no mention of the two aircraft recently acquired by the carrier.

The Bureau of Industry and Security, which houses the OEE, did not respond to either an initial request for comment in October, nor detailed written questions submitted prior to this story’s publication.

According to Emanuele Ottolenghi, an expert on Iran sanctions at the Foundation for Defense of Democracies, a hawkish think-tank, the alarm bells of Iranian involvement in the sales should have immediately rung clear.

“This is a textbook case for Mahan sanctions evasion practices,” Ottolenghi wrote in an email to i24NEWS.

Referring to previous cases, including those in which the US dished out punishments, Ottolenghi added that “much like in previous successful procurement attempts, Mahan used small airlines in remote countries to triangulate its purchases.”

“A third party buyer makes it easier for Western sellers to transfer aircraft since technically it does not constitute a violation of US sanctions. Nevertheless, sellers should know better. None of these small regional airlines utilized by Mahan as intermediaries need the kind of aircraft they procure.”

A month before taking off for Kazakhstan, the jet that wound up in Damascus was bought by Trueaero LLC, an aviation company based in Sebastian, Florida, according to Federal Aviation Administration (FAA) filings.

Just five days later it was transferred to a trust held by the Bank of Utah, a mid-sized institution that specializes in aviation trusts, who exported it to Kazakhstan.

According to online fleet databases, the jet was supposed to be purchased by Bek Air, a Kazakh airline that owns a modest fleet of commuter aircraft that it flies exclusively to domestic locations.

Its need for and capacity to operate a gas-guzzling jet designed for intercontinental flying is unclear. Unsurprisingly, the then 16-year-old aircraft would never enter service for Bek.

Instead, on October 8 that year, the aircraft flew directly to Tehran’s Mehrabad Airport, using the flight number ZAK1.

Registration documents for the jet, published earlier this year by investigative journalist Gennady Benditsky for the Kazakh ratel.kz news portal, show that they were submitted by a British man, Melad Herfeh, on behalf of ZAK Aviation — a company with an address in Sharjah, in the United Arab Emirates.

No trace of this company could be found online, however. The address for Herfeh’s British firm, UK Airservices Ltd, is an accounting company which declined to pass on a message to their client. A spokesman for Britain’s sanctions enforcement agency said they could not comment on individual cases.

In early February 2017, the jet made its final delivery flight — to Damascus. It now bore the tail number TT-WAG, denoting registration in the impoverished North African state of Chad — a political time-bomb that would detonate several months later.

In Syria, airline officials believed their flashy new acquisition would broaden the horizons of the crippled company by opening up new routes in Asia. However flight tracking data shows it rarely leaves the Middle East, where it is allowed in the airspace of bitter Assad foes such as Saudi Arabia, Egypt and the UAE.

When approached in November, a spokesman for Trueaero, the jet’s US owner, said he was not aware of any of their formerly owned aircraft flying in Syria or Iran and asked to see further details in writing. He did not respond to emailed questions.

Michael Arsenault, the Bank of Utah executive who signed the paperwork for the jetliner’s export from the US to Kazakhstan, declined to name the beneficiary of the trust. He said the plane was sold from the trust in April, but did not disclose the buyer’s identity.

Arsenault added in an email that “as a federally regulated banking institution, Bank of Utah is fully committed to adhering to all US laws and regulations.”

Yet, even as the Syria-bound aircraft was dawdling in Kazakhstan, another such Airbus flew out of Sanford Airport. Its last registered owners were the same: Bank of Utah and Trueaero.

This time, US authorities intervened.

Unlike in the previous case, in which the Bank of Utah trust was anonymous, FAA filings revealed that the trust was in the name of Aftrans Aero DMCC, another small UAE-based firm.

The bank applied to export the aircraft to Kazakhstan, but then said it had been exported to Ukraine.

Though when the aircraft actually flew out of Florida it set course for neither country. Instead, it traversed the Pacific to the Indonesian capital, Jakarta.

Possibly alerted by the sudden change in its export destination, investigators in the Office of Export Enforcement unearthed indications that a Mahan Air acquisition was in the works. They appear to have scrambled to head off the sale.

“After multiple attempts by OEE to contact the UAE company regarding OEE’s concerns about any sale or other diversion to Mahan Airways,” their June 2017 export privileges denial order reads “[an] industry database was revised so as to indicate that the sale/transfer to Mahan had been cancelled. The timing of this revision is suspicious.”

The jet now flies for Kam Air, an Afghan airline that may be linked to Aftrans. Attempts to reach the latter firm were unsuccessful.

The Bank of Utah and Trueaero did not respond to additional requests for comment about this aircraft.

In October this year, Juda Allahoundoum, the publisher of Chadian newspaper LeVisionnaire, was arrested and charged with “pretending to be a journalist,” according to the Committee to Protect Journalists.

His crime? Writing an expose about the appearance of the Syrian-bound US jet on Chad’s aircraft registry and the entanglement of senior officials and family members of the country’s authoritarian ruler, President Zakaria Deby Itno.

The report claimed that several high-ranking officials were interrogated, including the ex-head of the civil aviation authority and the CEO of Air Inter 1, an airline with apparent connections to Iran.

Allahoundoum’s article even claimed that Chad’s response was a driving force behind Donald Trump’s unexpected decision to include Chad in his enhanced vetting order for
immigrants from several Muslim-majority countries in September 2017.

The State Department and White House did not respond to requests for comment.

Meanwhile, the role of Kazakhstan’s Civil Aviation Committee would only become murkier.

On February 2017 two further Kazakh-registered A340s flew from the Greek capital Athens directly to Tehran.

Sitting on the tarmac for almost a decade after Greece’s Olympic Airlines went belly up during the country’s financial meltdown, the jets were sold by the Greek public asset fund in June 2016 to Turboshaft, a UAE spare parts company, for a bargain $2.1 million each.

One of those jets is now in service for Mahan. The other, according to satellite imagery, is still sitting in a military area of Tehran’s Mehrabad Airport, its fate unclear.

Documents unearthed by ratel.kz show that shortly before their delivery to Iran they were registered in Kazakhstan by a second UAE company, Bright Horizon.

In a letter revealed by the outlet in July the director-general of EUROCONTROL, the agency that manages Europe’s airspace noted that “it is at present still unclear … as to who exactly owns the aircraft and who operated those flights.”

A spokesman said the organization is unable to comment on individual flights or communications with the Kazakh authorities.

Greece’s civil aviation authority did not respond to requests for documents relating to the aircraft nor to written questions. Turboshaft also did not answer emailed questions.

The findings raise questions about why the Trump administration has not, at least publicly, acted on information of which they were well appraised.

The previously mentioned journalists in Kazakhstan and Chad both wrote that US embassy officials hawkishly followed the affair.

Ottolenghi notes the aviation industry can be an opaque business, its players adept at disguising the true nature of transactions.

“Enforcing sanctions against Mahan is like a cat and mouse game,” he says, “or a game of whack-a-mole as they say in the US. Sometimes the mouse escapes.”

Jacob Atkins is a journalist and news editor for the i24NEWS English web desk.