[Federal Register Volume 80, Number 144 (Tuesday, July 28, 2015)]
[Notices]
[Pages 44930-44936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18316]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Order Renewing Order Temporarily Denying Export Privileges

Washington, DC 20230.

Mahan Airways, Mahan Tower, No. 21, Azadegan St., M.A. Jenah Exp. 
Way, Tehran, Iran
Pejman Mahmood Kosarayanifard, a/k/a Kosarian Fard, P.O. Box 52404, 
Dubai, United Arab Emirates;
Mahmoud Amini, G#22 Dubai Airport Free Zone, P.O. Box 393754, Dubai, 
United Arab Emirates, and P.O. Box 52404, Dubai, United Arab 
Emirates, and Mohamed Abdulla Alqaz Building, Al Maktoum Street, Al 
Rigga, Dubai, United Arab Emirates;
Kerman Aviation, a/k/a GIE Kerman Aviation, 42 Avenue Montaigne 
75008, Paris, France;
Sirjanco Trading LLC, P.O. Box 8709, Dubai, United Arab Emirates;
Ali Eslamian, 33 Cavendish Square, 4th Floor, London, W1G0PW, United 
Kingdom, and 2 Bentinck Close, Prince Albert Road St. Johns Wood, 
London NW87RY, United Kingdom;
Mahan Air General Trading LLC, 19th Floor Al Moosa Tower One, Sheik 
Zayed Road, Dubai 40594, United Arab Emirates;
Skyco (UK) Ltd., 33 Cavendish Square, 4th Floor, London, W1G 0PV, 
United Kingdom;
Equipco (UK) Ltd., 2 Bentinck Close, Prince Albert Road, London, NW8 
7RY, United Kingdom;
Mehdi Bahrami, Mahan Airways-Istanbul Office, Cumhuriye Cad. Sibil 
Apt No: 101 D:6, 34374 Emadad, Sisli Istanbul, Turkey;
Al Naser Airlines, a/k/a al-Naser Airlines, a/k/a Alnaser Airlines 
and, Air Freight Ltd., Home 46, Al-Karrada, Babil Region, District 
929, St 21, Beside Al Jadirya Private Hospital, Baghdad, Iraq, and 
Al Amirat Street, Section 309, St. 3/H.20, Al Mansour, Baghdad, 
Iraq, and P.O. Box 28360, Dubai, United Arab Emirates, and P.O. Box 
911399, Amman 11191, Jordan;
Ali Abdullah Alhay, a/k/a Ali Alhay, a/k/a Ali Abdullah Ahmed Alhay, 
Home 46, Al-Karrada, Babil Region, District 929, St 21, Beside Al 
Jadirya Private Hospital, Baghdad, Iraq, and, Anak Street, Qatif, 
Saudi Arabia 61177;
Bahar Safwa General Trading, PO Box 113212, Citadel Tower, Floor-5, 
Office #504, Business Bay, Dubai, United Arab Emirates, and, PO Box 
8709, Citadel Tower, Business Bay, Dubai, United Arab Emirates;
Sky Blue Bird Group, a/k/a Sky Blue Bird Aviation, a/k/a Sky Blue 
Bird Ltd, a/k/a Sky Blue Bird FZC), P.O. Box 16111, Ras Al Khaimah 
Trade Zone, United Arab Emirates;
Issam Shammout, a/k/a Muhammad Isam Muhammad Anwar Nur Shammout, a/
k/a Issam Anwar, Philips Building, 4th Floor, Al Fardous Street, 
Damascus, Syria, and Al Kolaa, Beirut, Lebanon 151515, and 17-18 
Margaret Street, 4th Floor, London, W1W 8RP, United Kingdom, and 
Cumhuriyet Mah. Kavakli San St. Fulya, Cad. Hazar Sok. No.14/A 
Silivri, Istanbul, Turkey.

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730 through 774 (2015) (``EAR'' or the 
``Regulations''),\1\ I hereby

[[Page 44931]]

grant the request of the Office of Export Enforcement (``OEE'') to 
renew the January 16, 2015 Temporary Denial Order, as modified on May 
21, 2015 (the ``TDO''). The January 16, 2015 Order denied the export 
privileges of Mahan Airways, Pejman Mahmood Kosarayanifard, Mahmoud 
Amini, Kerman Aviation, Sirjanco Trading LLC, Ali Eslamian, Mahan Air 
General Trading LLC, Skyco (UK) Ltd., Equipco (UK) Ltd., and Mehdi 
Bahrami.\2\ The May 21, 2015 modification order added Al Naser 
Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading to the 
TDO as additional respondents. I find that renewal of the TDO is 
necessary in the public interest to prevent an imminent violation of 
the EAR. Additionally, pursuant to Section 766.23 of the Regulations, 
including the provisions on notice and an opportunity to respond, I 
find it necessary to add the following persons as related persons in 
order to prevent evasion of the TDO:
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    \1\ The Regulations, currently codified at 15 CFR parts 730-774 
(2015), originally issued pursuant to the Export Administration Act 
of 1979, as amended (50 U.S.C. app. Sec. Sec.  2401-2420 (2000)). 
Since August 21, 2001, the Act has been in lapse and the President, 
through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp. 
783 (2002)), which has been extended by successive Presidential 
Notices, the most recent being that of August 7, 2014 (79 FR 46,959 
(Aug. 11, 2014)), has continued the Regulations in effect under the 
International Emergency Economic Powers Act (50 U.S.C. 1701, et seq. 
(2006 & Supp. IV 2010)).
    \2\ See note 3, infra.

Sky Blue Bird Group, a/k/a Sky Blue Bird Aviation, a/k/a Sky Blue 
Bird Ltd, a/k/a Sky Blue Bird FZC, P.O. Box 16111, Ras Al Khaimah 
Trade Zone, United Arab Emirates;
Issam Shammout, a/k/a Muhammad Isam Muhammad Anwar Nur Shammout, a/
k/a Issam Anwar, Philips Building, 4th Floor, Al Fardous Street, 
Damascus, Syria, and Al Kolaa, Beirut, Lebanon 151515, and 17-18 
Margaret Street, 4th Floor, London, W1W 8RP, United Kingdom, and 
Cumhuriyet Mah. Kavakli San St. Fulya, Cad. Hazar Sok. No.14/A 
Silivri, Istanbul, Turkey.

I. Procedural History

    On March 17, 2008, Darryl W. Jackson, the then-Assistant Secretary 
of Commerce for Export Enforcement (``Assistant Secretary''), signed a 
TDO denying Mahan Airways' export privileges for a period of 180 days 
on the grounds that its issuance was necessary in the public interest 
to prevent an imminent violation of the Regulations. The TDO also named 
as denied persons Blue Airways, of Yerevan, Armenia (``Blue Airways of 
Armenia''), as well as the ``Balli Group Respondents,'' namely, Balli 
Group PLC, Balli Aviation, Balli Holdings, Vahid Alaghband, Hassan 
Alaghband, Blue Sky One Ltd., Blue Sky Two Ltd., Blue Sky Three Ltd., 
Blue Sky Four Ltd., Blue Sky Five Ltd., and Blue Sky Six Ltd., all of 
the United Kingdom. The TDO was issued ex parte pursuant to Section 
766.24(a), and went into effect on March 21, 2008, the date it was 
published in the Federal Register.
    The TDO subsequently has been renewed in accordance with Section 
766.24(d), including most recently on January 16, 2015.\3\ As of March 
9, 2010, the Balli Group Respondents and Blue Airways were no longer 
subject to the TDO. As part of the February 25, 2011 TDO renewal, 
Gatewick LLC (a/k/a Gatewick Freight and Cargo Services, a/k/a Gatewick 
Aviation Services), Mahmoud Amini, and Pejman Mahmood Kosarayanifard 
(``Kosarian Fard'') were added as related persons in accordance with 
Section 766.23 of the Regulations.\4\ On July 1, 2011, the TDO was 
modified by adding Zarand Aviation as a respondent in order to prevent 
an imminent violation.\5\ As part of the August 24, 2011 renewal, 
Kerman Aviation, Sirjanco Trading LLC, and Ali Eslamian were added to 
the TDO as related persons. Mahan Air General Trading LLC, Skyco (UK) 
Ltd., and Equipco (UK) Ltd. were added as related persons on April 9, 
2012. Mehdi Bahrami was added to the TDO as a related person as part of 
the February 4, 2013 renewal order.
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    \3\ The January 16, 2015 Order was published in the Federal 
Register on January 23, 2015 (80 Fed Reg. 3552, Jan. 23, 2015). The 
January 16, 2015 Order was modified on May 21, 2015, adding Al Naser 
Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading as 
additional respondents. See 80 Fed Reg. 30435 (May 28, 2015). The 
TDO previously had been renewed on September 17, 2008, March 16, 
2009, September 11, 2009, March 9, 2010, September 3, 2010, February 
25, 2011, August 24, 2011, February 15, 2012, August 9, 2012, 
February 4, 2013, July 31, 2013, January 24, 2014, and July 22, 
2014. The August 24, 2011 renewal followed the modification of the 
TDO on July 1, 2011, which added Zarand Aviation as a respondent. 
Each renewal or modification order was published in the Federal 
Register.
    \4\ On August 13, 2014, BIS and Gatewick LLC resolved 
administrative charges against Gatewick, including a charge for 
acting contrary to the terms of a BIS denial order (15 CFR 
764.2(k)). In addition to the payment of a civil penalty, the 
settlement includes a seven-year denial order. The first two years 
of the denial period are active, with the remaining five years 
suspended on condition that Gatewick LLC pays the civil penalty in 
full and timely fashion and commits no further violation of the 
Regulations during the seven-year denial period. The Gatewick LLC 
Final Order was published in the Federal Register on August 20, 
2014. See 79 FR 49283 (Aug. 20, 2014).
    \5\ As of July 22, 2014, Zarand Aviation was no longer subject 
to the TDO.
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    On June 19, 2015, BIS, through its Office of Export Enforcement 
(``OEE''), submitted a written request for renewal of the TDO. The 
written request was made more than 20 days before the scheduled 
expiration of the current TDO, which issued on January 16, 2015.\6\ 
Notice of the renewal request also was provided to Mahan Airways, Al 
Naser Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading in 
accordance with Sections 766.5 and 766.24(d) of the Regulations. No 
opposition to the renewal of the TDO has been received. Furthermore, no 
appeal of the related person determinations Assistant Secretary David 
W. Mills made as part of the September 3, 2010, February 25, 2011, 
August 24, 2011, April 9, 2012, and February 4, 2013 renewal or 
modification orders has been made by Kosarian Fard, Mahmoud Amini, 
Kerman Aviation, Sirjanco Trading LLC, Ali Eslamian, Mahan Air General 
Trading LLC, Skyco (UK) Ltd., Equipco (UK) Ltd., or Mehdi Bahrami.\7\ 
Additionally, OEE is requesting that Sky Blue Bird Group and its chief 
executive officer Issam Shammout be added to the TDO as related persons 
in accordance with Section 766.23 of the Regulations.
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    \6\ The May 21, 2015 modification order did not affect the 
expiration date of the January 16, 2015 Order.
    \7\ A party named or added as a related person may not oppose 
the issuance or renewal of the underlying temporary denial order, 
but may file an appeal of the related person determination in 
accordance with Section 766.23(c).
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II. Renewal of the TDO

A. Legal Standard

    Pursuant to Section 766.24, BIS may issue or renew an order 
temporarily denying a respondent's export privileges upon a showing 
that the order is necessary in the public interest to prevent an 
``imminent violation'' of the Regulations. 15 CFR 766.24(b)(1) and 
776.24(d). ``A violation may be `imminent' either in time or degree of 
likelihood.'' 15 CFR 766.24(b)(3). BIS may show ``either that a 
violation is about to occur, or that the general circumstances of the 
matter under investigation or case under criminal or administrative 
charges demonstrate a likelihood of future violations.'' Id. As to the 
likelihood of future violations, BIS may show that the violation under 
investigation or charge ``is significant, deliberate, covert and/or 
likely to occur again, rather than technical or negligent [.]'' Id. A 
``lack of information establishing the precise time a violation may 
occur does not preclude a finding that a violation is imminent, so long 
as there is sufficient reason to believe the likelihood of a 
violation.'' Id.

B. The TDO and BIS's Request for Renewal

    OEE's request for renewal is based upon the facts underlying the 
issuance of the initial TDO and the TDO renewals in this matter and the 
evidence developed over the course of this investigation indicating a 
blatant disregard of U.S. export controls and the TDO. The initial TDO 
was issued as a

[[Page 44932]]

result of evidence that showed that Mahan Airways and other parties 
engaged in conduct prohibited by the EAR by knowingly re-exporting to 
Iran three U.S.-origin aircraft, specifically Boeing 747s (``Aircraft 
1-3''), items subject to the EAR and classified under Export Control 
Classification Number (``ECCN'') 9A991.b, without the required U.S. 
Government authorization. Further evidence submitted by BIS indicated 
that Mahan Airways was involved in the attempted re-export of three 
additional U.S.-origin Boeing 747s (``Aircraft 4-6'') to Iran.
    As discussed in the September 17, 2008 renewal order, evidence 
presented by BIS indicated that Aircraft 1-3 continued to be flown on 
Mahan Airways' routes after issuance of the TDO, in violation of the 
Regulations and the TDO itself.\8\ It also showed that Aircraft 1-3 had 
been flown in further violation of the Regulations and the TDO on the 
routes of Iran Air, an Iranian Government airline. Moreover, as 
discussed in the March 16, 2009, September 11, 2009 and March 9, 2010 
Renewal Orders, Mahan Airways registered Aircraft 1-3 in Iran, obtained 
Iranian tail numbers for them (EP-MNA, EP-MNB, and EP-MNE, 
respectively), and continued to operate at least two of them in 
violation of the Regulations and the TDO,\9\ while also committing an 
additional knowing and willful violation when it negotiated for and 
acquired an additional U.S.-origin aircraft. The additional acquired 
aircraft was an MD-82 aircraft, which subsequently was painted in Mahan 
Airways' livery and flown on multiple Mahan Airways' routes under tail 
number TC-TUA.
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    \8\ Engaging in conduct prohibited by a denial order violates 
the Regulations. 15 CFR 764.2(a) and (k).
    \9\ The third Boeing 747 appeared to have undergone significant 
service maintenance and may not have been operational at the time of 
the March 9, 2010 renewal order.
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    The March 9, 2010 Renewal Order also noted that a court in the 
United Kingdom (``U.K.'') had found Mahan Airways in contempt of court 
on February 1, 2010, for failing to comply with that court's December 
21, 2009 and January 12, 2010 orders compelling Mahan Airways to remove 
the Boeing 747s from Iran and ground them in the Netherlands. Mahan 
Airways and the Balli Group Respondents had been litigating before the 
U.K. court concerning ownership and control of Aircraft 1-3. In a 
letter to the U.K. court dated January 12, 2010, Mahan Airways' 
Chairman indicated, inter alia, that Mahan Airways opposes U.S. 
Government actions against Iran, that it continued to operate the 
aircraft on its routes in and out of Tehran (and had 158,000 ``forward 
bookings'' for these aircraft), and that it wished to continue to do so 
and would pay damages if required by that court, rather than ground the 
aircraft.
    The September 3, 2010 renewal order discussed the fact that Mahan 
Airways' violations of the TDO extended beyond operating U.S.-origin 
aircraft and attempting to acquire additional U.S.-origin aircraft. In 
February 2009, while subject to the TDO, Mahan Airways participated in 
the export of computer motherboards, items subject to the Regulations 
and designated as EAR99, from the United States to Iran, via the United 
Arab Emirates (``UAE''), in violation of both the TDO and the 
Regulations, by transporting and/or forwarding the computer 
motherboards from the UAE to Iran. Mahan Airways' violations were 
facilitated by Gatewick LLC, which not only participated in the 
transaction, but also has stated to BIS that it acted as Mahan Airways' 
sole booking agent for cargo and freight forwarding services in the 
UAE.
    Moreover, in a January 24, 2011 filing in the U.K. court, Mahan 
Airways asserted that Aircraft 1-3 were not being used, but stated in 
pertinent part that the aircraft were being maintained in Iran 
especially ``in an airworthy condition'' and that, depending on the 
outcome of its U.K. court appeal, the aircraft ``could immediately go 
back into service . . . on international routes into and out of Iran.'' 
Mahan Airways' January 24, 2011 submission to U.K. Court of Appeal, at 
p. 25, ]] 108, 110. This clearly stated intent, both on its own and in 
conjunction with Mahan Airways' prior misconduct and statements, 
demonstrated the need to renew the TDO in order to prevent imminent 
future violations. Two of these three 747s subsequently were removed 
from Iran and are no longer in Mahan Airway's possession. The third of 
these 747s, with Manufacturer's Serial Number (``MSN'') 23480 and 
Iranian tail number EP-MNE, remained in Iran under Mahan's control. 
Pursuant to Executive Order 13324, it was designated a Specially 
Designated Global Terrorist (``SDGT'') by the U.S. Department of the 
Treasury's Office of Foreign Assets Control (``OFAC'') on September 19, 
2012.\10\ Furthermore, as discussed in the February 4, 2013 Order, open 
source information indicated that this 747, painted in the livery and 
logo of Mahan Airways, had been flown between Iran and Syria, and was 
suspected of ferrying weapons and/or other equipment to the Syrian 
Government from Iran's Islamic Revolutionary Guard Corps. Open source 
information showed that this aircraft had flown from Iran to Syria as 
recently as June 30, 2013, and continues to show that it remains in 
active operation in Mahan Airways' fleet.
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    \10\ See http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/pages/20120919.aspx.
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    In addition, as first detailed in the July 1, 2011 and August 24, 
2011 orders, and discussed in subsequent renewal orders in this matter, 
Mahan Airways also continued to evade U.S. export control laws by 
operating two Airbus A310 aircraft, bearing Mahan Airways' livery and 
logo, on flights into and out of Iran.\11\ At the time of the July 1, 
2011 and August 24, 2011 Orders, these Airbus A310s were registered in 
France, with tail numbers F-OJHH and F-OJHI, respectively.\12\
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    \11\ The Airbus A310s are powered with U.S.-origin engines. The 
engines are subject to the EAR and classified under Export Control 
Classification (``ECCN'') 9A991.d. The Airbus A310s contain 
controlled U.S.-origin items valued at more than 10 percent of the 
total value of the aircraft and as a result are subject to the EAR. 
They are classified under ECCN 9A991.b. The reexport of these 
aircraft to Iran requires U.S. Government authorization pursuant to 
Sections 742.8 and 746.7 of the Regulations.
    \12\ OEE subsequently presented evidence that after the August 
24, 2011 renewal, Mahan Airways worked along with Kerman Aviation 
and others to de-register the two Airbus A310 aircraft in France and 
to register both aircraft in Iran (with, respectively, Iranian tail 
numbers EP-MHH and EP-MHI). It was determined subsequent to the 
February 15, 2012 renewal order that the registration switch for 
these A310s was cancelled and that Mahan Airways then continued to 
fly the aircraft under the original French tail numbers (F-OJHH and 
F-OJHI, respectively). Both aircraft apparently remain in Mahan 
Airways' possession.
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    The August 2012 renewal order also found that Mahan Airways had 
acquired another Airbus A310 aircraft subject to the Regulations, with 
MSN 499 and Iranian tail number EP-VIP, in violation of the TDO and the 
Regulations.\13\ On September 19, 2012, all three Airbus A310 aircraft 
(tail numbers F-OJHH, F-OJHI, and EP-VIP) were designated as SDGTs.\14\
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    \13\ See note 11, supra.
    \14\ See http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/pages/20120919.aspx. Mahan Airways was previously 
designated by OFAC as a SDGT on October 18, 2011. 77 FR 64,427 
(October 18, 2011).
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    The February 4, 2013 Order laid out further evidence of continued 
and additional efforts by Mahan Airways and other persons acting in 
concert with Mahan, including Kral Aviation and another Turkish 
company, to procure U.S.-origin engines--two GE CF6-50C2 engines, with 
MSNs 517621 and 517738, respectively--and other aircraft parts in 
violation of the TDO and the

[[Page 44933]]

Regulations.\15\ The February 4, 2013 renewal order also added Mehdi 
Bahrami as a related person in accordance with Section 766.23 of the 
Regulations. Bahrami, a Mahan Vice-President and the head of Mahan's 
Istanbul Office, also was involved in Mahan's acquisition of the 
original three Boeing 747s (Aircraft 1-3) that resulted in the original 
TDO, and has had a business relationship with Mahan dating back to 
1997.
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    \15\ Kral Aviation was referenced in the February 4, 2013 Order 
as ``Turkish Company No. 1.'' Kral Aviation purchased a GE CF6-50C2 
aircraft engine (MSN 517621) from the United States in July 2012, on 
behalf of Mahan Airways. OEE was able to prevent this engine from 
reaching Mahan by issuing a redelivery order to the freight 
forwarder in accordance with Section 758.8 of the Regulations. OEE 
also issued Kral Aviation a redelivery order for the second CF6-50C2 
engine (MSN 517738) on July 30, 2012. The owner of the second engine 
subsequently cancelled the item's sale to Kral Aviation. In 
September 2012, OEE was alerted by a U.S. exporter that another 
Turkish company (``Turkish Company No. 2'') was attempting to 
purchase aircraft spare parts intended for re-export by Turkish 
Company No. 2 to Mahan Airways. See February 4, 2013 Order.
    On December 31, 2013, Kral Aviation was added to BIS's Entity 
List, Supplement No. 4 to Part 744 of the Regulations. See 78 
FR75458 (Dec. 12, 2013). Companies and individuals are added to the 
Entity List for engaging in activities contrary to the national 
security or foreign policy interests of the United States. See 15 
CFR 744.11.
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    The July 31, 2013 Order detailed additional evidence obtained by 
OEE showing efforts by Mahan Airways to obtain another GE CF6-50C2 
aircraft engine (MSN 528350) from the United States via Turkey. 
Multiple Mahan employees, including Mehdi Bahrami, were involved in or 
aware of matters related to the engine's arrival in Turkey from the 
United States, plans to visually inspect the engine, and prepare it for 
shipment from Turkey.
    Mahan sought to obtain this U.S.-origin engine through Pioneer 
Logistics Havacilik Turizm Yonetim Danismanlik (``Pioneer Logistics''), 
an aircraft parts supplier located in Turkey, and its director/
operator, Gulnihal Yegane, a Turkish national who previously had 
conducted Mahan related business with Mehdi Bahrami and Ali Eslamian. 
Moreover, as referenced in the July 31, 2013 Order, a sworn affidavit 
by Kosol Surinanda, also known as Kosol Surinandha, Managing Director 
of Mahan's General Sales Agent in Thailand, stated that the shares of 
Pioneer Logistics for which he was the listed owner were ``actually the 
property of and owned by Mahan.'' He further stated that he held 
``legal title to the shares until otherwise required by Mahan'' but 
would ``exercise the rights granted to [him] exactly and only as 
instructed by Mahan and [his] vote and/or decisions [would] only and 
exclusively reflect the wills and demands of Mahan[.]'' \16\
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    \16\ Pioneer Logistics, Gulnihal Yegane, and Kosol Surinanda 
also were added to the Entity List on December 12, 2013. See 78 FR 
75458 (Dec. 12, 2013).
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    The January 24, 2014 Order outlined OEE's continued investigation 
of Mahan Airways' activities and detailed an attempt by Mahan, which 
OEE thwarted, to obtain, via an Indonesian aircraft parts supplier, two 
U.S.-origin Honeywell ALF-502R-5 aircraft engines (MSNs LF5660 and 
LF5325), items subject to the Regulations, from a U.S. company located 
in Texas. An invoice of the Indonesian aircraft parts supplier dated 
March 27, 2013, listed Mahan Airways as the purchaser of the engines 
and included a Mahan ship-to address. OEE also obtained a Mahan air 
waybill dated March 12, 2013, listing numerous U.S.-origin aircraft 
parts subject to the Regulations--including, among other items, a 
vertical navigation gyroscope, a transmitter, and a power control 
unit--being transported by Mahan from Turkey to Iran in violation of 
the TDO.
    The July 22, 2014 Order discusses open source evidence from the 
March-June 2014 time period regarding two BAE regional jets, items 
subject to the Regulations, that were painted in the livery and logo of 
Mahan Airways and operating under Iranian tail numbers EP-MOK and EP-
MOI, respectively. In addition, aviation industry resources indicated 
that these aircraft were obtained by Mahan Airways in late November 
2013 and June 2014, from Ukrainian Mediterranean Airline, a Ukrainian 
airline that was added to BIS's Entity List (Supplement No. 4 to Part 
744 of the Regulations) on August 15, 2011, for acting contrary to the 
national security and foreign policy interests of the United 
States.\17\ OEE's on-going investigation indicates that both BAE 
regional jets remain active in Mahan's fleet, with open source 
information showing EP-MOI being used on flights into and out of Iran 
as recently as January 12, 2015. The continued operation of these 
aircraft by Mahan Airways violates the TDO.
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    \17\ See 76 FR 50407 (Aug. 15, 2011). The July 22, 2014 TDO 
renewal order also referenced two Airbus A320 aircraft painted in 
the livery and logo of Mahan Airways and operating under Iranian 
tail numbers EP-MMK and EP-MML, respectively. OEE's investigation 
also showed that Mahan obtained these aircraft in November 2013, 
from Khors Air Company, another Ukrainian airline that, like 
Ukrainian Mediterranean Airlines, was added to BIS's Entity List on 
August 15, 2011. Open source evidence indicates the two Airbus A320 
aircraft may be been transferred by Mahan Airways to another Iranian 
airline in October 2014, and issued Iranian tail numbers EP-APE and 
EP-APF, respectively.
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    The January 16, 2015 Order details evidence of additional attempts 
by Mahan Airways to acquire items subject the Regulations in further 
violation of the TDO. Specifically, in March 2014, OEE became aware of 
an inertial reference unit bearing serial number 1231 (``the IRU'') 
that had been sent to the United States for repair. The IRU is subject 
to the Regulations, classified under ECCN 7A103, and controlled for 
missile technology reasons. Upon closer inspection, it was determined 
that IRU came from or had been installed on an Airbus A340 aircraft 
bearing MSN 056. Further investigation revealed that as of 
approximately February 2014, this aircraft was registered under Iranian 
tail number EP-MMB and had been painted in the livery and logo of Mahan 
Airways.
    The January 16, 2015 Order described related efforts by the 
Departments of Justice and Treasury to further thwart Mahan's illicit 
procurement efforts. Specifically, on August 14, 2014, the United 
States Attorney's Office for the District of Maryland filed a civil 
forfeiture complaint for the IRU pursuant to 22 U.S.C. 401(b) that 
resulted in the court issuing an Order of Forfeiture on December 2, 
2014. EP-MMB remains listed as active in Mahan Airways' fleet.
    Additionally, on August 29, 2014, OFAC blocked the property and 
interests in property of Asian Aviation Logistics of Thailand, a Mahan 
Airways affiliate or front company, pursuant to Executive Order 13224. 
In doing so, OFAC described Mahan Airway's use of Asian Aviation 
Logistics to evade sanctions by making payments on behalf of Mahan for 
the purchase of engines and other equipment.\18\
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    \18\ See http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20140829.aspx. See 79 FR 55073 (Sep. 15, 2014). 
OFAC also blocked the property and property interests of Pioneer 
Logistics of Turkey on August 29, 2014. Id. Mahan Airways' use of 
Pioneer Logistics in an effort to evade the TDO and the Regulations 
was discussed in a prior renewal order, as summarized, supra, at 13-
14. BIS added both Asian Aviation Logistics and Pioneer Logistics to 
the Entity List on December 12, 2013. See 78 FR 75458 (Dec. 12, 
2013).
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    The May 21, 2015 modification order detailed the acquisition of two 
aircraft, specifically an Airbus A340 bearing MSN 164 and an Airbus 
A321 bearing MSN 550, that were purchased by Al Naser Airlines in late 
2014/early 2015 and are currently located in Iran under the possession, 
control, and/or ownership of Mahan Airways.\19\ The

[[Page 44934]]

sales agreements for these two aircraft were signed by Ali Abdullah 
Alhay for Al Naser Airlines.\20\ Payment information reveals that 
multiple electronic funds transfers (``EFT'') were made by Ali Abdullah 
Alhay and Bahar Safwa General Trading in order to acquire MSNs 164 and 
550. The May 21, 2015 modification order also laid out evidence showing 
the respondents' attempts to obtain other controlled aircraft, 
including aircraft physically located in the United States in 
similarly-patterned transactions during the same recent time period. 
Transactional documents involving two Airbus A320s bearing MSNs 82 and 
99, respectively, again showed Ali Abdullah Alhay signing sales 
agreements for Al Naser Airlines.\21\ A review of the payment 
information for these aircraft similarly revealed EFTs from Ali 
Abdullah Alhay and Bahar Safwa General Trading that follow the pattern 
described for MSNs 164 and 150, supra. MSNs 82 and 99 were detained by 
OEE Special Agents prior to their planned export from the United 
States.
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    \19\ Both of these aircraft are powered by U.S.-origin engines 
that are subject to the Regulations and classified under ECCN 
9A991.d. Both aircraft contain controlled U.S.-origin items valued 
at more than 10 percent of the total value of the aircraft and as a 
result are subject to the EAR regardless of their location. The 
aircraft are classified under ECCN 9A991.b. The export or re-export 
of these aircraft to Iran requires U.S. Government authorization 
pursuant to Sections 742.8 and 746.7 of the Regulations.
    \20\ Ali Abdullah Alhay is a 25% owner of Al Naser Airlines.
    \21\ Both aircraft were physically located in the United States 
and therefore are subject to the Regulations pursuant to Section 
734.3(a)(1). Moreover, these Airbus A320s are powered by U.S.-origin 
engines that are subject to the Regulations and classified under 
Export Control Classification Number ECCN 9A991.d. The Airbus A320s 
contain controlled U.S.-origin items valued at more than 10 percent 
of the total value of the aircraft and as a result are subject to 
the EAR regardless of the their location. The aircraft are 
classified under ECCN 9A991.b. The export or re-export of these 
aircraft to Iran requires U.S. Government authorization pursuant to 
Sections 742.8 and 746.7 of the Regulations.
---------------------------------------------------------------------------

    The June 19, 2015 renewal request demonstrates that Al Naser 
Airlines' attempts to acquire aircraft on behalf of Mahan Airways 
extend beyond MSNs 164 and 550. BIS obtained a press release dated May 
9, 2015, that appeared on Mahan's Web site and stated that Mahan 
``added 9 modern aircraft to its air fleet.'' \22\ Specifically the 
press release states the newly acquired aircraft include eight Airbus 
A340s and one Airbus A321. Mahan's press release corroborates publicly 
available aviation databases showing nine additional aircraft recently 
acquired by Mahan from Al Naser Airlines in May 2015, including MSNs 
164 and 550. Evidence presented by OEE further shows that four of the 
aircraft, all of which are subject to the Regulations and were obtained 
from Al Naser Airlines, were issued the following Iranian tail numbers: 
EP-MMD (MSN 164), EP-MMG (MSN 383) EP-MMH (MSN 391) and EP-MMR (MSN 
416), respectively.\23\ Publicly available flight tracking information 
provides evidence that two of the recently acquired aircraft, EP-MMH 
and EP-MMR, are actively being flown on routes into and out of Iran as 
recently as July 10, 2015, in further violation of the TDO and 
Regulations.
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    \22\ http://www.mahan.aero/en/mahan-air/press-room/44. The press 
release was subsequently removed from Mahan Airways' Web site.
    \23\ These Airbus A340s are powered by U.S.-origin engines that 
are subject to the Regulations and classified under ECCN 9A991.d. 
The Airbus A340s contain controlled U.S.-origin items valued at more 
than 10 percent of the total value of the aircraft and as a result 
are subject to the EAR regardless of the their location. The 
aircraft are classified under ECCN 9A991.b. The export or re-export 
of these aircraft to Iran requires U.S. Government authorization 
pursuant to Sections 742.8 and 746.7 of the Regulations.
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C. Findings

    Under the applicable standard set forth in Section 766.24 of the 
Regulations and my review of the entire record, I find that the 
evidence presented by BIS convincingly demonstrates that Mahan Airways 
has repeatedly violated the EAR and the TDO, that such knowing 
violations have been significant, deliberate and covert, and that there 
is a likelihood of future violations. OEE's on-going investigation 
continues to reveal or discover additional attempts involving Al Naser 
Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading to 
acquire items subject to the Regulations as part of or through Mahan 
Airways' extensive network of agents and affiliates in third countries. 
Therefore, renewal of the TDO is necessary to prevent imminent 
violation of the EAR and to give notice to companies and individuals in 
the United States and abroad that they should continue to cease dealing 
with Mahan Airways and the other denied persons under the TDO in 
connection with export transactions involving items subject to the EAR.

III. Addition of Related Persons

    Pursuant to Sections 766.23 and 766.24(c) of the Regulations, OEE 
has requested that Sky Blue Bird Group and Issam Shammout be added to 
the TDO as related persons to Mahan Airways, Al Naser Airlines, and/or 
Ali Abdullah Alhay in order to prevent evasion of the TDO.

A. Legal Standard

    Section 766.23 of the Regulations provides that ``[i]n order to 
prevent evasion, certain types of orders under this part may be made 
applicable not only to the respondent, but also to other persons then 
or thereafter related to the respondent by ownership, control, position 
of responsibility, affiliation, or other connection in the conduct of 
trade or business. Orders that may be made applicable to related 
persons include those that deny or affect export privileges, including 
temporary denial orders . . . .'' 15 CFR 766.23(a). See also 15 CFR 
766.24(c) (``A temporary denial order may be made applicable to related 
persons in accordance with Sec.  766.23 of this part.'').

B. Analysis and Findings

    Via notice letters sent in accordance with Section 766.23 of the 
Regulations on June 2, 2015, OEE provided Sky Blue Bird Group and its 
chief executive officer Issam Shammout with notice of its intent to 
seek an order adding them to the TDO as related persons to Mahan 
Airways, Al Naser Airlines, and/or Ali Abdullah Alhay in order to 
prevent evasion. No response has been received from Sky Blue Bird or 
Issam Shammout.
    OEE has presented evidence that Sky Blue Bird Group, via Mr. 
Shammout, was actively involved in Al Naser Airlines' acquisition of 
MSNs 164 and 550, and the attempted acquisition of MSNs 82 and 99 
(which were detained by OEE). Moreover, on May 21, 2015, OFAC 
designated Sky Blue Bird and Issam Shammout as SDGTs pursuant to 
Executive Order 13324 for ``providing support to Iran's Mahan Air.'' 
\24\
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    \24\ http://www.treasury.gov/press-center/press-releases/Pages/jl10061.aspx. See 80 FR 30762 (May 29, 2015).
---------------------------------------------------------------------------

    In sum, I find pursuant to Section 766.23 that Sky Blue Bird Group 
and Issam Shammout are connected to Mahan Airways, Al Naser Airlines, 
and/or Ali Abdullah Alhay in the conduct of trade or business and that 
their addition to the TDO as related persons is necessary to prevent 
evasion of the TDO.

IV. Order

    IT IS THEREFORE ORDERED:
    FIRST, that MAHAN AIRWAYS, Mahan Tower, No. 21, Azadegan St., M.A. 
Jenah Exp. Way, Tehran, Iran; PEJMAN MAHMOOD KOSARAYANIFARD A/K/A 
KOSARIAN FARD, P.O. Box 52404, Dubai, United Arab Emirates; MAHMOUD 
AMINI, G#22 Dubai Airport Free Zone, P.O. Box 393754, Dubai, United 
Arab Emirates, and P.O.

[[Page 44935]]

Box 52404, Dubai, United Arab Emirates, and Mohamed Abdulla Alqaz 
Building, Al Maktoum Street, Al Rigga, Dubai, United Arab Emirates; 
KERMAN AVIATION A/K/A GIE KERMAN AVIATION, 42 Avenue Montaigne 75008, 
Paris, France; SIRJANCO TRADING LLC, P.O. Box 8709, Dubai, United Arab 
Emirates; ALI ESLAMIAN, 33 Cavendish Square, 4th Floor, London W1G0PW, 
United Kingdom, and 2 Bentinck Close, Prince Albert Road St. Johns 
Wood, London NW87RY, United Kingdom; MAHAN AIR GENERAL TRADING LLC, 
19th Floor Al Moosa Tower One, Sheik Zayed Road, Dubai 40594, United 
Arab Emirates; SKYCO (UK) LTD., 33 Cavendish Square, 4th Floor, London, 
W1G 0PV, United Kingdom; EQUIPCO (UK) LTD., 2 Bentinck Close, Prince 
Albert Road, London, NW8 7RY, United Kingdom; and MEHDI BAHRAMI, Mahan 
Airways--Istanbul Office, Cumhuriye Cad. Sibil Apt No: 101 D:6, 34374 
Emadad, Sisli Istanbul, Turkey; AL NASER AIRLINES A/K/A AL-NASER 
AIRLINES A/K/A ALNASER AIRLINES AND AIR FREIGHT LTD., Home 46, Al-
Karrada, Babil Region, District 929, St 21, Beside Al Jadirya Private 
Hospital, Baghdad, Iraq, and Al Amirat Street, Section 309, St. 3/H.20, 
Al Mansour, Baghdad, Iraq, and P.O. Box 28360, Dubai, United Arab 
Emirates, and P.O. Box 911399, Amman 11191, Jordan; ALI ABDULLAH ALHAY 
A/K/A ALI ALHAY A/K/A ALI ABDULLAH AHMED ALHAY, Home 46, Al-Karrada, 
Babil Region, District 929, St 21, Beside Al Jadirya Private Hospital, 
Baghdad, Iraq, and Anak Street, Qatif, Saudi Arabia 61177; BAHAR SAFWA 
GENERAL TRADING, P.O. Box 113212, Citadel Tower, Floor-5, Office #504, 
Business Bay, Dubai, United Arab Emirates, and P.O. Box 8709, Citadel 
Tower, Business Bay, Dubai, United Arab Emirates; SKY BLUE BIRD GROUP 
A/K/A SKY BLUE BIRD AVIATION A/K/A SKY BLUE BIRD LTD A/K/A SKY BLUE 
BIRD FZC, P.O. Box 16111, Ras Al Khaimah Trade Zone, United Arab 
Emirates; and ISSAM SHAMMOUT A/K/A MUHAMMAD ISAM MUHAMMAD ANWAR NUR 
SHAMMOUT A/K/A ISSAM ANWAR, Philips Building, 4th Floor, Al Fardous 
Street, Damascus, Syria, and Al Kolaa, Beirut, Lebanon 151515, and 17-
18 Margaret Street, 4th Floor, London, W1W 8RP, United Kingdom, and 
Cumhuriyet Mah. Kavakli San St. Fulya, Cad. Hazar Sok. No.14/A Silivri, 
Istanbul, Turkey, and when acting for or on their behalf, any 
successors or assigns, agents, or employees (each a ``Denied Person'' 
and collectively the ``Denied Persons'') may not, directly or 
indirectly, participate in any way in any transaction involving any 
commodity, software or technology (hereinafter collectively referred to 
as ``item'') exported or to be exported from the United States that is 
subject to the Export Administration Regulations (``EAR''), or in any 
other activity subject to the EAR including, but not limited to:
    A. Applying for, obtaining, or using any license, License 
Exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the EAR, or in any other activity 
subject to the EAR; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the EAR, or in any other activity subject to the EAR.
    SECOND, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of a Denied Person any item 
subject to the EAR;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a Denied Person of the ownership, possession, or control 
of any item subject to the EAR that has been or will be exported from 
the United States, including financing or other support activities 
related to a transaction whereby a Denied Person acquires or attempts 
to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from a Denied Person of any item subject to 
the EAR that has been exported from the United States;
    D. Obtain from a Denied Person in the United States any item 
subject to the EAR with knowledge or reason to know that the item will 
be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the EAR 
that has been or will be exported from the United States and which is 
owned, possessed or controlled by a Denied Person, or service any item, 
of whatever origin, that is owned, possessed or controlled by a Denied 
Person if such service involves the use of any item subject to the EAR 
that has been or will be exported from the United States. For purposes 
of this paragraph, servicing means installation, maintenance, repair, 
modification or testing.
    THIRD, that, after notice and opportunity for comment as provided 
in section 766.23 of the EAR, any other person, firm, corporation, or 
business organization related to a Denied Person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
this Order.
    FOURTH, that this Order does not prohibit any export, reexport, or 
other transaction subject to the EAR where the only items involved that 
are subject to the EAR are the foreign-produced direct product of U.S.-
origin technology.
    In accordance with the provisions of Sections 766.24(e) of the EAR, 
Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and/or Bahar 
Safwa General Trading may, at any time, appeal this Order by filing a 
full written statement in support of the appeal with the Office of the 
Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 
South Gay Street, Baltimore, Maryland 21202-4022. In accordance with 
the provisions of Sections 766.23(c)(2) and 766.24(e)(3) of the EAR, 
Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation, Sirjanco 
Trading LLC, Ali Eslamian, Mahan Air General Trading LLC, Skyco (UK) 
Ltd., Equipco (UK) Ltd., Mehdi Bahrami, Sky Blue Bird Group, and/or 
Issam Shammout may, at any time, appeal their inclusion as a related 
person by filing a full written statement in support of the appeal with 
the Office of the Administrative Law Judge, U.S. Coast Guard ALJ 
Docketing Center, 40 South Gay Street, Baltimore, Maryland 21202-4022.
    In accordance with the provisions of Section 766.24(d) of the EAR, 
BIS may seek renewal of this Order by filing a written request not 
later than 20 days before the expiration date. A renewal request may be 
opposed by Mahan Airways, Al Naser Airlines, Ali Abdullah Alhay, and/or 
Bahar Safwa General Trading as provided in Section 766.24(d), by filing 
a written submission with the Assistant Secretary of Commerce for 
Export Enforcement, which must be received not later than seven days 
before the expiration date of the Order.
    A copy of this Order shall be provided to Mahan Airways, Al Naser 
Airlines, Ali Abdullah Alhay, and Bahar Safwa General Trading and each 
related person, and shall be published in the Federal Register. This 
Order is effective

[[Page 44936]]

immediately and shall remain in effect for 180 days.\25\
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    \25\ Review and consideration of this matter have been delegated 
to the Deputy Assistant Secretary for Export Enforcement.

    Dated: July 13, 2015.
Richard R. Majauskas,
Deputy Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2015-18316 Filed 7-27-15; 8:45 a.m.]
BILLING CODE P