What sanctions?

Photographer: Mohammed Huwais/AFP/Getty Images

With Plane Delivery, Iran Sanctions Collapsing Already

Eli Lake is a Bloomberg View columnist. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.
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With a deadline to end nuclear negotiations less than two months away, the crippling sanctions against Iran are already beginning to collapse. The latest evidence came over the weekend when nine used commercial airliners arrived in Iran to bolster the fleet of Mahan Air.

The U.S. has threatened to sanction western companies that sell planes to Iran, although a prohibition against Iran acquiring airplane spare parts was lifted in an interim agreement signed with Iran at the end of 2013. U.S. officials have also said that sanctions to punish Iran's support of terrorism and human rights violations will remain in place if the nuclear sanctions are lifted.

Mahan Air has been singled out before -- not for its support for Iran's nuclear program, but for its role in providing weapons and crowd control equipment to the Syrian regime in its brutal suppression of popular unrest. The delivery of the used airplanes comes at a moment when Iran is seeking to rejoin the international economy, even before it signs a final deal. Last month Russia's president Vladimir Putin announced he would resume the sale of a sophisticated air defense system, known as the S300, to Iran. Western oil companies are already meeting with Iranian officials to discuss how to get back into the country's lucrative oil and gas markets.

Abbas Akhoundi, Iran's transportation minister, said Sunday that 15 planes had been acquired by Iran since February, with nine arriving over the weekend. Other Iranian media reported that the planes -- which used to be part of the Virgin Atlantic fleet -- were headed to Mahan Air. On Monday, the Financial Times reported that Western governments suspect Iraq's Al-Naser Airlines to have been a front for Mahan to acquire the planes.

The airline, a private company based in Tehran, has come under scrutiny from the U.S. government before. In 2011, it was sanctioned by Treasury for supporting Iran's Revolutionary Guard Corps and its ballistic missile program. A 2012 press release from Treasury says, "Iran used Iran Air and Mahan Air flights between Tehran and Damascus to send military and crowd control equipment to the Syrian regime." Those flights were then coordinated with Hezbollah, according to the press release, to re-supply Bashar al-Assad's government during his attacks against civilians and his opposition that summer.

In 2008, according to a diplomatic cable declassified by Wikileaks, the State Department attempted to ground three Mahan Air planes that were receiving maintenance in South Korea. Eventually, the U.S. was able to recall those planes to the U.S. bases where they were manufactured   The U.S. also collected $15 million in fines from the British company that sold the aircraft to Mahan Air.

A Treasury Department spokeswoman declined to comment on the news Monday about the delivery of airplanes to Iran. Some analysts, however, said the transaction showed how the sanctions against Iran were collapsing ahead of the June 30 deadline for a nuclear deal.

“Mahan Air’s case shows that U.S. sanctions no longer deter Western companies from doing big business with Iran – even with a company like Mahan Air, which Treasury targeted for its support of the Iran’s Revolutionary Guards’ Corps," said Emanuele Ottolenghi, a senior fellow at the Foundation for Defense of Democracies, a Washington think tank that has advocated for tough sanctions on Iran.

"To preserve the credibility of its sanctions’ regime, the administration must move quickly to punish those companies involved in this blatant breach of U.S. sanctions," Ottolenghi said. "Otherwise," he added, "the argument that sanctions are still largely intact and can always be snapped back in the future loses all credibility."

Avi Jorisch, a former Treasury Department official who has worked on mapping Iran's illicit activities, said the purchase of the airplanes was a "gross violation" of the interim agreement reached by Iran, the United States and five other great powers at the end of 2013. "Such moves weaken the U.S. government's ability to negotiate and make a credible case that if a good deal is not signed, Iran's economy will continue to suffer," added Jorisch, now a senior fellow at the American Foreign Policy Council. 

Despite the announcement last month of an agreed framework for a nuclear deal, much negotiation remains. Iran's supreme leader has insisted that all sanctions on Iran must be lifted upon the signing of an agreement, and Iranian military leaders have pledged no international inspectors will be given access to military sites. President Obama and other western leaders have hoped that the burden of existing sanctions on Iran might give the U.S. some leverage to pressure Iran on these remaining issues. But it appears that leverage is weakening.  

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Eli Lake at elake1@bloomberg.net

To contact the editor on this story:
Philip Gray at philipgray@bloomberg.net