Fly Baghdad, CEO, and Aircraft as “Specially Designated Global Terrorists”

Author: Hdeel Abdelhady

The United States sanctioned Fly Baghdad, a privately owned commercial airline based in Iraq. The sanctions designation is pursuant to Executive order 13224 as amended by EO 13886 and renders Fly Baghdad a Specially Designated Global Terrorist (SDGT) whose property and interests in property are blocked. The 50% rule applies.

Fly Baghdad’s CEO was designated an SDGT, for owning or controlling the airline, as were two Iraq-based aircraft owned by Fly Baghdad having tail numbers YI-BAF and YI-BAN.

According to Treasury/OFAC, Fly Baghdad, among other things, “provid[ed] assistance to the Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF) and its proxy groups in Iraq, Syria, and #Lebanon,” including “delivering materiel and personnel throughout the region” and “shipments of weapons to Damascus International Airport in Syria for transfer to members of the IRGC-QF and Iran-aligned militia groups on the ground in #Syria.” The IRGC-QF was separately designated an SDGT.

#OFAC also issued General License No. 27 that authorizes until 12:01 a.m. (eastern) on March 22, 2024 all otherwise prohibited transactions that are “ordinarily incident and necessary to” provide, export, or reexport goods, technology, or services to ensure “the safety of civil aviation involving Fly Baghdad” so long as the same are “for use only on aircraft operated solely for civil aviation purposes.”

GL No. 27 also authorizes, through 12:01 a.m. (eastern) on March 22, transactions “ordinarily incident” to the winding down of “any transaction involving Fly Baghdad,” so long as any related payment is made into a blocked account.

There will likely be questions about whether transactions “ordinarily incident to travel” are exempt from the Fly Baghdad sanctions actions. It is unlikely the exemption applies. Although the International Emergency Economic Powers Act (IEEPA), on which Executive order 13224 partly relies, does not authorize the president to, e.g., block property, where “ordinarily incident to travel,” OFAC’s position is that the travel and related IEEPA exemptions do not apply to SDGTs or under the GTSR. (See Hdeel Abdelhady‘s Law360 article on OFAC’s SITA enforcement inc. the travel issue).

Relatedly, sanctions were also imposed today on Kata’ib Hizballah leaders.

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Related Links:

Hdeel Abdelhady, Penalty Shows OFAC Authority May Extend To Use Of US Tech, Law360, at https://lnkd.in/evwTdx34 (paywall)

MassPoint Legal and Strategy Advisory PLLC, OFAC Jurisdiction Over U.S. Origin Software and Telecommunications Hardware (travel exemption), at https://lnkd.in/dtNwtyt