5/12/2015 Irans Mahan airline defies sanctions in shadowy aircraft deal - FT.com

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May11,20156:22pm

SamJonesinLondon,ErikaSolomoninBeirutandNajmehBozorgmehrinTehran

Iran has defied international sanctions and acquired nine large commercial aircraft worth more

than $300m.

Mahan Air, which is blacklisted by the US and Europe because of alleged links to Irans

revolutionary guard denied by the airline is suspected of spending more than a year

brokering a complex series of arrangements with apparently unwitting companies across

Europe using the small Iraqi Al-Naser Airlines as a front, according to western security officials.

Al-Naser denies the allegation.

Western diplomats fear the aircraft could be used to ferry weapons to conflicts in Yemen and

Syria, a concern that Mahan which is owned by the Kerman Molal-Movahedin Non-Profit

Institute rejects.

Hossein Marashi, a member of the institutes board of trustees, confirmed the purchase of the

nine jets but said it is really baseless to say Mahan buys modern planes to carry weapons as if

Irans Mahan airline defies sanctions in

shadowy aircraft deal

AFP

5/12/2015 Irans Mahan airline defies sanctions in shadowy aircraft deal - FT.com

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there is shortage of planes in Iran for such purposes.

Western aerospace companies are prohibited from dealing with Iran by sweeping sanctionslinked to the countrys nuclear programme and to its sponsorship of terrorist groups. Under USlaw hefty financial penalties can also be applied to non-western entities which do business withTehran. These extraterritorial rules have all but choked the Iranian aviation industry ofsupplies.

The sanctions-busting operation to acquire the nine new aircraft for Mahan, the countryssecond carrier, is the most ambitious scheme by Irans hard-hit aviation sector yet uncoveredand is believed to have involved a sprawling network of leasing arrangements and contractsacross Europe.

It comes at a particularly sensitive time for Irans relationship with the west. While landmarknuclear negotiations are poised to open up the Islamic Republics economy to the world inexchange for curbs on its atomic ambitions, there are also concerns over Tehrans role in bloodyproxy conflicts with its regional rivals.

Mahan did not disclose where it bought the planes.

The [first] company had sent those planes back to Airbus and Airbus overhauled them andsold them to [other] non-Iranian companies which then sold them to Mahan after they did notfind any interest in the Iraqi market, said Mr Marashi.

But the company has been implicated by the US Treasury in helping the Qods force theIranian Revolutionary Guard Corps extraterritorial special forces arm to ferry advisers andweaponry to both Syria and Yemen.

The airline uses regular commercial flights to disguise such activities, according to threewestern security officials. One described Mahan as the IRGCs airline of choice over Iransother carriers. However, in Iran Mahan is known for its affiliation to Akbar HashemiRafsanjani, the former president who has been at odds with the guards.

A Mahan commercial aircraft was intercepted by Saudi jets en route to Yemen earlier thismonth and turned back. On a recent visit to Dubai, Hamid Arabnejad, Mahans chief executive,was briefly detained by local security authorities.

The nine aircraft Mahan has acquired eight Airbus A340s and one Airbus A320 weremanufactured between 2001 and 2009 but had flown less than six months. They have beenstored in Iraq for several months and were all flown to Iran over the weekend.

5/12/2015 Irans Mahan airline defies sanctions in shadowy aircraft deal - FT.com

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Iranians impatient for nucleardealApr 29, 2015 - 2:14 pm

Many Iranians believe a comprehensivenuclear deal will bring a lifting of sanctionsand the return of foreign investors, inparticular Americans, who have beenabsent from Iran for over thirty years.Najmeh Bozorgmehr, reports from Tehranon their hopes for a deal.

5:44

Eyad Abdelkarim, head of marketing for Al-Naser insisted the allegations that his company hadacted as a front for Mahan were untrue.

I dont have any information about this, he said. This is some kind of propaganda. There isno truth to the information you have received.

Mr Abdelkarim was unable to give the whereabouts of Al-Nasers aircraft.

However, two senior diplomats from separate western countries said they had no doubt Al-Naser had been operating as a cut-out in acquiring the aircraft on behalf of Mahan. One saidthey had traced payments from Mahan through a series of Gulf-based companies to buy theplanes in Al-Nasers name.

Al-Naser previously owned just three aircraft, only one of which was operational. Until 2014,the company was owned by Iraqs powerful al-Khawam family, and is still listed as part of theirRiyadh Investment Group the Khawam-controlled industrial conglomerate on its officialwebsite. The Khawams sold Al-Naser in 2014.

Al-Nasers new owner is Firas al-Mayyali. Mr Mayyali, who is involved in foreign exchangetrading in Baghdad, declined on several occasions to speak to the Financial Times.

Soon after Mr Mayyalis takeover of Al-Naser the company entered into negotiations withseveral European aviation businesses. Two Airbus A340 planes were acquired outright by thecompany. Others were wet-leased seconded with crew, according to documents fromEuropean aviation authorities.

Mahan has previously circumvented sanctions bybuying spare parts and second-hand planes fromregional countries, which the company and manyIranians see as crucial for flight safety. Iranscommercial fleet is in desperate need ofmodernisation because of sanctions and has a poorsafety record. Many Iranians prefer to fly withMahan because its planes are newer and bettermaintained.

In one earlier scheme, Mahan acquired three Boeing747 aircraft through a similarly complex series ofinternational companies and tax-haven shells. In alegal case in the UK brought by some of the parties involved, Mahan was explicit about its

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intents and methods in arranging the transactions: Mahans lawyers told the court theagreements were superficial and window dressing designed to avoid sanctions and create afalse impression.

Mahan [operates] in a culture in which complex dealings are conducted at meetings and withlittle documentation other than emails and handwritten notes of the meetings, UK judgeJustice Beatson concluded in his 2009 judgment.