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New OFAC License Allows Foreign Airlines to Fly U.S.-Made Planes to Iran

Tuesday, August 02, 2016
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control has issued a general license authorizing non-U.S. persons to reexport eligible aircraft to Iran on temporary sojourn. According to press sources, this general license will allow foreign airlines to fly U.S.-made aircraft, or planes with U.S. parts, to Iran but does not allows sales to that country. U.S.-registered aircraft are not covered by this license.

Under this license, “eligible aircraft” means a U.S.-origin fixed-wing civil aircraft or non-U.S.-origin fixed-wing civil aircraft of which U.S-controlled content constitutes ten percent or more of the total value and that is (a) classified under ECCN 9A991.b and (b) registered in a jurisdiction other than the U.S. or any country in Country Group E:1 of Supplement No. 1 to Part 740 of the Export Administration Regulations.

In addition, the license requires a number of criteria to be met. For example, certain rights must remain with the non-U.S. person reexporter, the place of the aircraft’s registration must not be changed to Iran, and there must be no transfer of technology to an Iranian national ordinarily resident in Iran. In addition, the aircraft must not bear the color, livery or logo of, or carry a flight number issued to, an Iranian air carrier; must not be equipped with or used to transport arms or related materiel, certain controlled items, or items used to facilitate the development or production of a weapon of mass destruction; and must not remain in Iran for more than 72 hours per trip.

The license also allows (a) eligible aircraft to carry usual and reasonable quantities of industry standard onboard supplies of civil aircraft equipment, spare parts, components and technology for permanent use on the aircraft, provided certain conditions are met, and (b) the reexportation to Iran of technology for purposes of emergency maintenance and/or repairs to an eligible aircraft. Transactions related to non-emergency and/or line maintenance in Iran of eligible aircraft in Iran pursuant to this license will require separate authorization.

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