The U.S. Treasury Department said Wednesday that it has lifted sanctions on an Iraqi airline that it once linked to Iran’s Islamic Revolutionary Guard Corps.
The department removed all sanctions on Fly Baghdad, also known as Iraq Express, and two of its aircraft, citing a change in the carrier’s behavior. The department did not provide specifics about those changes but emphasized that there has been no shift in U.S. policy toward the Iranian government and the IRGC.
Under the sanctions, Fly Baghdad was barred from using the U.S. banking system, and U.S. citizens and corporations could not do business with it.
The sanctions relief comes as the U.S. and Iran are reportedly nearing a deal to reopen the Strait of Hormuz and end their five-month-long war. It was not immediately clear if the federal government’s decision was a part of or influenced by the negotiations between Washington and Tehran.
The Treasury Department’s Office of Foreign Assets Control first sanctioned Fly Baghdad in early 2024, alleging connections to the IRGC’s elite Quds Force, which helps support Iranian-aligned paramilitary groups across the Middle East.
The OFAC accused Fly Baghdad and its executives of laundering money for the Iraqi militia Kata’ib Hezbollah, ferrying weapons and fighters from Iran to Syria, and supporting groups such as the Syrian Arab Republican Guard and Lebanese Hezbollah. The office’s initial order listed CEO Basheer Abdulkadhim Alwan al-Shabbani as a “secondary sanctions risk.”
It is not clear if al-Shabbani is still running the airline.
