The US Department of the Treasury's Office of Foreign Assets Control (OFAC) says Aero Sky Aircraft Maintenance violated US sanctions during dealings with Iranian airline Mahan Air (W5, Tehran Mehrabad) in 2016.

According to an OFAC statement issued on December 12, Aero Sky, which has already been declared bankrupt and thus liquidated, violated Global Terrorism Sanctions Regulations (GTSR) when it negotiated and entered into a contract and contingent contract with Mahan Air.

On December 19, 2016, after several rounds of negotiations with the Iranian carrier's representatives, Aero Sky entered into Memorandum of Understanding (MOU) with Mahan Air and two other parties. The MOU called for the parties to make reasonable efforts to collaborate in order to provide future non-exclusive maintenance and repair services to Mahan Air and to enter into a joint venture agreement. The MOU also included an appendix that stated that the MOU was contingent, in part, upon Mahan Air being removed from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN).

Aero Sky mistakenly determined that its entry into a contingent contract with Mahan Air was authorised under the scope of the Iran General Licence I (GL I). This licence authorises certain transactions related to the negotiation of, and entry into, contingent contracts for activities eligible for authorisation under the then-Joint Comprehensive Plan of Action Statement of Licencing Policy.

In issuing its Finding of Violation to Aero Sky, OFAC said it had determined that the firm had engaged in a "reckless violation of the law" by failing to exercise minimal caution or care by negotiating and entering into a contingent contract with an entity on the SDN List.

It also determined that a senior Aero Sky executive had actual knowledge of, and participated in, conduct that led to the violations and that Aero Sky had undermined the policy objectives of the GTSR by dealing in blocked property or property interests of a high-profile entity included on the SDN List.

Mahan Air was designated by OFAC in 2011, approximately five years before its dealings with Aero Sky dealings took place.

The watchdog, which is responsible for the enforcement of US sanctions, maintains that Mahan Air supports global terrorism by providing, among other things, "financial, material and technological support to the sanctioned Islamic Revolutionary Guard Corps-Qods Force", and support to the Iranian government’s "destabilizing" activity in the Middle East.