OFAC Sanctions Malaysia’s Mahan Travel for Iran Business, Specially Designated National Status
The Treasury Department’s Office of Foreign Assets Control (OFAC) today sanctioned, as a counter-terrorism designation, Malaysia-based Mahan Travel and Tourism Sdn Bhd (“Mahan Travel“) pursuant to Executive Order 13,224 of September 23, 2001, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism” (EO 13224).
As a result, Mahan Travel is now a “blocked” person (as Specially Designated National). Mahan Travel’s property and interests in property now or in the future located in the United States or in the possession of a U.S. person is or must be blocked (i.e., frozen). U.S. persons are prohibited from doing business with Mahan Travel and U.S. financial institutions (including their foreign branches) are required to, in addition to blocking any property of Mahan Travel in their possession, reject transactions with Mahan Travel and report them to OFAC within 10 business days.
Link Between Mahan Travel and Iran’s Mahan Air (per Treasury Dept.)
According to the Treasury Department, Mahan Travel is a “General Sales Agent” “acting for or on behalf of Mahan Air, an Iranian airline previously designated in connection with Iran’s support for international terrorism.” Per Treasury Secretary Mnuchin, “Mahan Air is the airline of choice for the Islamic Revolutionary Guard Corps-Qods Force, facilitating its support to terrorism across the Middle East. Mahan’s regular flights to Syria are used to prop up the Assad regime and deliver weapons, foreign fighters, and Iranian operatives who sow violence and unrest across the region.”
Treasury Department Appears to Put Other Agents of Mahan Air on Notice; Potentially Affected Parties Should Assess Legal and Commercial Risk and Compliance
Along with the press release announcing the Mahan Travel action, the Treasury Department posted an “Overview of Mahan Air’s travel destinations,” which include cities in Europe, the Middle East and Far East and Central Asia. The provision by the Treasury Department of the Mahan Air travel destinations overview should not be viewed as merely informational. Rather, the information should be taken as a prompt to other travel agencies, vendors or other parties that directly or indirectly transact business with Mahan Air, or “act for or on behalf of Mahan Air,” to disassociate from the airline.
Such other travel agencies or vendors should, at minimum, review and understand today’s Mahan Travel action, assess their sanctions and related risk (legal, commercial, etc.) and take defensive compliance steps that are appropriate to their sanctions/legal exposure and commercial position.
Reminder: The Arm of U.S. Law is Long
The broader takeaway from today’s OFAC action against Mahan Travel is that it reinforces the fact that U.S. sanctions and other laws are global in reach. Accordingly, non-U.S. parties should take note of their potential exposure to U.S. sanctions or other legal enforcement actions.