Reprinted with permission from McGill University Institute of Air & Space Law: Annals of Air and Space Law
“WE WILL PERSEVERE”:
SURVIVAL AND INGENUITY OF IRANIAN AVIATION
IN THE FACE OF POLITICAL AND ECONOMIC
ADVERSITY
by
Dayan Hochman
SYNOPSIS
SYNOPSIS .......................................................................................................221
ABSTRACT .....................................................................................................222
RÉSUMÉ ..........................................................................................................222
KEYWORDS ...................................................................................................223
I.
HISTORICAL BACKGROUND: GENERAL OVERVIEW
OF US SANCTIONS AGAINST IRAN .............................................223
II.
IRANIAN NUCLEAR ENERGY DEVELOPMENT AND
THE TEHRAN RESEARCH REACTOR PLAN .............................227
III. THE CRY HEARD AROUND THE WORLD: THE EFFECT
OF US AND INTERNATIONAL SANCTIONS ON
IRANIAN PEOPLE AND AVIATION .............................................231
IV. THE DENIGRATION OF IRANIAN AVIATION AS A
RESULT OF THE “CISADA EFFECT” .............................................236
V.
HOW THE IRANIAN AVIATION INDUSTRY HAS
COPED ..................................................................................................241
A.
THE EFFECT OF SANCTIONS ON THE IRANIAN
PEOPLE......................................................................................244
B.
WHAT PERMANENT SANCTIONS RELIEF WILL
ACCOMPLISH AS PART OF THE JCPOA ...........................247

Dayan M. Hochman, Esq. is an Associate Attorney practicing in the aviation regulatory
practice group at Eckert Seamans, Cherin & Merlott, LLC in Washington, D.C. and a Master
In Law Thesis candidate of the Institute of Air & Space Law at McGill University. Her areas
of concentration include aviation regulatory matters, public international air law and
aviation litigation, with a specific interest in aircraft safety systems and maintenance.
-221-
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ABSTRACT
In 1979, the Iranian Revolution began a pattern of strained and hostile
international relations resulting in the institution of intense, pointed
international economic sanctions affecting all aspects of life in Iran. One
area particularly hard hit was that of Iranian aviation which, once having
been the crown jewel of Middle Eastern influence, soon became the victim
of a political stymie between Western allegiances and the new Iranian
regime. After further global confrontations ensued over the status and
motivation of Iran’s nuclear energy programme, the debilitating effect of
international sanctions was strengthened yet again after promulgation of
the US Comprehensive Iran Sanctions Accountability and Divestment Act
of 2010. Forced to survive on dilapidated airframes kept aloft mostly by
mechanical ingenuity and the procurement of black market parts, Iranian
airlines have been drastically limited in their ability to expand and
maintain air services, and shut out from forging relationships or
expanding their market share with other airlines in the West.
A temporary reprisal of some sanctions became permenent after the 2014
Joint Plan of Action (JPOA) between Iran and the P5+1 States (Russia, the
United Kingdom, the United States, China and Germany) gained final
approval as the Joint Comprehensive Plan of Action (JCPOA) in July 2015.
Although currently the JCPOA does not allow for direct transactions
between U.S. parties and Iranian entities, it is noteworthy in that it sets the
stage for potential economic and cultural rehabilitation of the Iranian
aviation industry for the first time in 36 years. Despite such improvements
in international relations however, the current status of Iranian aviation
will continue to be grim until complete and permenent primary sanction
relief is achieved and Iran is allowed to fully participate as a member of
the international aviation community. Until then, Iranians and the Iranian
civil aviation industry will continue fighting to survive, despite harmful,
long-standing effects on the morale and safety of the Iranian people.
RÉSUMÉ
En 1979, la Révolution iranienne a débuté par des relations tendues et
hostiles entre les États-Unis et l'Iran, qui ont conduit à l'instauration de
sanctions économiques importantes, affectant tous les aspects de la vie en
Iran. L'un des domaines les plus affectés a été l'aviation iranienne, qui
après avoir été le joyau de l'influence du Moyen-Orient, est rapidement
devenue la victime de l'impasse politique créée entre les alliés des
Occidentaux et le nouveau régime iranien. Après plusieurs confrontations
mondiales sur le statut et la motivation du programme nucléaire iranien,
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les effets négatifs des sanctions internationales ont encore été renforcés
après la promulgation du US Comprehensive Iran Sanctions Accountability
and Divestment Act de 2010. Forcées de survivre sur d'anciens modèles
délabrés, gardés en état de marche principalement grâce à l'ingénuité des
mécaniciens iraniens et à l'achat de pièces détachées au marché noir, les
compagnies aériennes comme Iran Air ont été limitées de manière
drastique dans leur capacité à maintenir et à étendre leurs services
internationaux de transport de passagers et de fret, et ont été incapables
d'étendre leurs parts de marché en concluant des alliances avec d'autres
compagnies occidentales.
Une suspension des sanctions temporaire a été convenue au titre du Plan
d'action conjoint (JPOA) de 2014, entre l'Iran et les pays du P5+1 (Russie,
Royaume-Uni, États-Unis, Chine et Allemagne), à la condition que l'Iran
continue de respecter des règles spécifiques relatives à la surveillance de
son programme nucléaire, mis en place par la communauté internationale.
Bien que l'Iran ait honoré les conditions fixées par le JPOA et que certaines
exceptions aient été faites au profit de l'aviation iranienne, les négociations
pour la levée permanente des sanctions n'ont pas été entamées avant la
mi-2015, principalement à cause des hésitations de la part des États-Unis
et des autres nations occidentales. Jusqu'à ce qu'une telle levée soit
accordée, les Iraniens et l'industrie de l'aviation civile iranienne
continueront à faire de leur mieux pour survivre, malgré les effets à long
terme sur le peuple iranien et ses avions.
KEYWORDS
aviation sanctions, Iran, air law, aviation safety, US foreign policy, ICAO,
fleet maintenance, international economic policy.
I.
HISTORICAL BACKGROUND: GENERAL
OVERVIEW OF US SANCTIONS AGAINST
IRAN
O
n 4 November 1979 — a dark day in American/Iranian diplomatic
history — a group of Muslim Student Followers of the Iman’s Line
clambered the walls of the American Embassy in Tehran, Iran,
seizing 66 hostages and the eyes of the world while igniting the fires of the
Iranian Revolution. 1 Provoked by United States (US) President Jimmy
Carter’s allowance of then-exiled Shah Mohammad Reza Pahlavi — the
1
“Iran Hostage Crisis” History.com, online: History.com <www.history.com/topics/iranhostage-crisis>.
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former leader of Iran— to receive medical treatment in the US, the
American embassy quickly became a target of large-scale, virulent
protests against America’s “meddling” in Iranian affairs. 2 Inflamed by the
vitriol of anti-American cleric Ayatollah Ruhollah Khomeini, the founding
father of the Iranian Revolution, the captors held the Americans hostage
for a total of 444 days, oftentimes parading them down the streets of
Tehran as symbols of Iran’s supplantation of American influence in the
Middle East.3
US President Carter responded to the violence with a barrage of
retributory actions, designed to coerce the revolutionaries into releasing
the hostages and restoring stability in Tehran. To accomplish his goal,
Carter issued Executive Order 12170, freezing a total of US$ 12 billion
Iranian government assets held both in the US and in US oversees banks.4
The seizure was later expanded to a full trade embargo, under which
Carter also halted all Iranian oil exports, expelled many Iranian ex-patriots
from the US 5 and imposed strict travel restrictions on passengers
travelling to and from Iran. 6 Once the hostages were finally released on 21
January 1981, Carter signed an accord unblocking the Iranian assets and
lifting the trade embargoes, with the exception of Iranian government
property remaining within US jurisdiction, while also pledging against
further US intervention in Iranian internal affairs. 7 The accord, however,
was short-lived. After a 1983 bombing of US Marine peacekeepers by
Iranian sympathisers in Lebanon became the largest loss of US military
life in a single incident since World War II, 8 the US declared Iran a
“sponsor” of international terrorism, thus imposing an entirely new set of
sanctions.9
2
US Department of State, “Iranian Hostage Crisis”, online US Department of State, Office of
the Historian <history.state.gov/departmenthistory/short-history/iraniancrises>.
3 For images of American hostages paraded down the streets of Tehran, see ABC News, “Iran
Hostage Crisis 1979 (ABC News Report From 11/11/1979)”, ABC News (12 October 2012),
online: YouTube
<www.youtube.com/watch?v=A8bC1DEYbI4>.
4 See Executive Order 12205, Prohibiting Certain Transactions with Iran, 45 FR 24099 (7 April
1980).
5 See Executive Order 12211, Further prohibitions on transactions with Iran, 45 FR 26685 (17 April
1980); The Historyguy.com: , “The Iran-U.S. Hostage Crisis (1979-1981))”, online: The History
Guy <www.historyguy.com/iran-us_hostage_crisis.hml>.
6 Patrick Clawson, “U.S. Sanctions”, online: United States Institute of Peace
<iranprimer.usip.org/resource/us-sanctions>.
7 See “Iranian Hostage Crises”, supra note 2.
8 See Executive Order 12211, supra note 5.
9 For a complete list of sanctions, including withholding international humanitarian aid and
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As the trademark prudence of the Carter Administration gave way
to the hard-lined principles of the Reagan Presidency, additional arms
restrictions were imposed on Iran under the US Arms Export Control
Act.10 Almost immediately, Reagan took issue with World Bank loans to
Iran,11 taking advantage of the inflammatory circumstances surrounding
the Iran/Iraq war to impose restrictions on US exports of all “dual use”
items, 12 and banning all future US imports of Iranian oil.13
Upon the inauguration of William (“Bill”) Clinton in 1992,
rumoured Iranian sponsorship of global terrorist activities only added
fuel to the fire of US hostilities. Clinton pushed increased sanctions as a
“low cost alternative” to foreign military intervention, at a time when US
occupation abroad was at an all-time low. 14 Regardless of these
restrictions, US super-corporation Conoco announced a US$ 1 billion
contract to develop oil and gas fields in Iran, prompting Clinton to sign
Executive Order 12957 banning all de facto US participation in Iranian
petroleum development — a limitation subsequently expanded to include
a total trade and investment embargo in Executive Order 12959. 15 These
restrictions later became the political motivation behind Congress’
passing of the Iran and Libya Sanctions Act, (ILSA) 16 thus pressuring all
foreign companies to refrain from investing in Iran’s oil and gas industry
— the main source of Iran’s national income. 17 With the passing of the
ILSA, Iran was declared “an extraordinary threat” to the national security,
foreign policy and economy of the United States. With the ban on oil
investment also having some extraterritorial reach since US companies
were no longer allowed to facilitate activities involving any trade with
Iran, ILSA also imposed severe restrictions on the re-export of US or
other assistance imposed by the Executive Order 12211, see ibid.
10 Herman Franssen & Elaine Morton, “A Review of U.S. Unilateral Sanctions Against Iran,”
45:34 Middle East Economic Survey (26 August 2002) (citing 18 USC § 921 et seq), online:
Middle East Economic Survey <www.mafhoum.com/press3/108E16.htm>
11 Ibid.
12 A “dual use” item is defined as any item, part or tool having application in both a civilian
and military context. See e.g. US Department of State, “Overview of U.S. Export Control
System”, online: US Department of State <www.state.gov/strategictrade/overview/>.
13 See Franssen & Morton, supra note 10.
14 Ibid.
15 Ibid.Executive Order 12959, Prohibiting Certain Transactions with Respect to Iran, 60 FR 24757
(6 May 1995).
16 50 USC 35 § 1701 et seq (1996).
17 See Franssen & Morton, supra note 10.
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partial-US products back to the United States. 18
After the tragic events of 11 September 2001, Clinton’s successor,
George W. Bush, placed additional pressure on Iran as a suspected
supporter of terrorist activities. As such, the US Office of Foreign Asset
Controls (OFAC) was encouraged to vigorously enforce current sanctions
and all related restrictions against Iran, especially for military items. 19
Complimentary banking sanctions were also enforced to freeze the assets
of individuals and firms determined by the US Government to be
supporters of Iranian terrorism, so as to threaten the stability of
neighbouring Iraq and Iran’s suspected blossoming nuclear missile
programme.20
To strengthen the current sanctions regime after the election of
Barack Obama in 2008, the US Congress passed the third and most
significant collection of retributory laws against Iran in the form of the
Comprehensive Iran Sanctions Accountability and Divestment Act of 2010
(CISADA).21 The motivations behind CISADA were threefold: first, it was
a reaction to Iran’s suspected clandestine nuclear enrichment programme;
second, it was the result of Iran reneging on obligations set forth by the
Nuclear Non-Proliferation Treaty of 1968 of which Iran was a signatory;
and third, it was an answer to human rights abuses witnessed in the wake
of the botched Iranian democratic presidential election of Mahmoud
Ahmadinejad in 2009.22 However, CISADA most pointedly targeted the
supply of refined petroleum products sent to Iran by non-US firms23 and
cut off Iranian access to transactions with US or US affiliated banks.24
18
Ibid.
Ibid.
20 Ibid.
21 Comprehensive Iran Sanctions Accountability and Divestment Act, Pub L 111-195 Sec 302 (1
July 2010) [CISADA].
22 See Amal Jabdi, “Policy Memo: Barriers to Lifting US Sanctions in a Final Deal with Iran”,
National Iranian American Council (17 March 2014), online: National Iranian American
Council <www.niacouncil.org/policy-memo-barriers-to-lifting-us-sanctions-in-a-final-dealwith-iran/>.
23 This sanction was particularly effective as Iran imports roughly 30 per cent of its refined
gasoline because of the poor state of its refineries. See ibid.
24 Sec. CISADA, supra note 21, sec 102(a)(7)).
19
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Further sanctions in 2011 increased pressure on the Iranian oil
industry by tightening restrictions on supporting industries, which
subsequently led to worldwide cut-offs of refined oil to Iran in compliance
with CISADA’s terms. 25 Up to this point, however, US sanctions against
Iran had actually been a source of international friction between the US
and Europe, due to punitive measures taken against European companies
supporting the Iranian oil industry in the past. An inevitable foreign
relations crisis was averted only after the US agreed to waive ILSA
implications on European investments in Iran, thus causing the
announcement of parallel European restrictions against exports of “dualuse” items in return. 26 As a last resort, European complaints against the
effects of ILSA were also launched with the World Trade Organization. 27
II.
IRANIAN NUCLEAR ENERGY
DEVELOPMENT AND THE TEHRAN
RESEARCH REACTOR PLAN
The true catalyst for unilateral international sanctions against Iran,
however, occurred in 2007 when Iran refused to cooperate with the
international community by complying with the terms of the Tehran
Research Reactor Plan. The Tehran Nuclear Research Reactor Plan
(TNRRP) originated in 1967 as a product of the Atomic Energy
Organization of Iran (AEOI) under the watchful eye of the US Atoms for
Peace Program. 28 After the Iranian Revolution in 1979, the US cut off
supply of highly enriched uranium to Iran, thus causing the TNRRP to be
shut down. 29 After help from Argentina’s National Atomic Energy
25
For example, growing approval for increased pressure on the Iranian government from
various European governments and some Gulf Arab States led to the refusal of oil
conglomerate British Petroleum (BP) to sell petroleum to Iran Air at European airports. See
Richard Spencer, “BP stops refuelling Iranian passenger planes” The Telegraph (5 July 2010),
online: The Telegraph
<www.telegraph.co.uk/finance/newsbysector/epic/bpdot/7873654/BP-stops-refuellingIranian-passenger-planes.html>.
26 At one point, Europe was prepared to adopt “blocking legislation” designed to prevent
EU companies from complying with ILSA altogether, encouraging EU Member States to
impose their own sanctions on companies complying with ILSA demands. See Hossein
Alikhani, Sanctioning Iran: Anatomy of a Failed Policy (New York: St. Martin’s Press: 2000) at
328.
27 Ibid.
28 International Atomic Energy Agency, Iran and the United States of America Contract for the
transfer of enriched uranium and plutonium for a research reactor in Iran, 10 March, 10 May and 7
June 1967, 1967 UNTS 112 (entered into force 22 December 1967).
29 R Ramazani, “Making a U.S.-Iranian Nuclear Deal”, Payvand Iran News (9 November 2009),
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Commission, the TNRRP began a conversion from reactor fuel utilisation
of highly enriched uranium fuel to low-enriched uranium,30 leading some
members of the international community to allege Iran was in violation of
the 1968 Treaty for Non-Proliferation of Nuclear Weapons as a nonnuclear weapon State.31
However, before Iran’s refusal to cooperate with the Tehran Reactor
Plan, the International Atomic Energy Agency (IAEA) had earlier
discovered in 2003 that Iran was conducting secret nuclear activities,
subsequently leading to Iran’s refusal of mandated inspections of the
Tehran facility in 2007.32 Iran produced its first-ever fuel element at the
Tehran Research Reactor in February 2012, thus sparking concerns
throughout the international community that Iran could possibly be
preparing to enrich plutonium for its own nuclear defence programme —
a concern which was subsequently aggravated by Iran’s refusal to also
allow IAEA inspectors to conduct design verification of its nuclear energy
plans. 33 Due to “serious and deepening concerns” over Iran’s nuclear
activities and its actions with regards to the TNRRP, the Council of the
European Union significantly broadened EU restrictive measures already
in place to persuade Iran to constructively engage in negotiations with the
international community in regards to its nuclear energy activities. 34
online: Payvand Iran News <www.payvand.com/news/09/nov/1140.html>.
30 “Foreign Supplies to Iran’s Nuclear Development”, James Martin Center for
Nonproliferation Studies, online: James Martin Center for Nonproliferation Studies
<cns.miis.edu/wmdme/flow/iran/reactor.htm>.
31 See Treaty for the Non-Proliferation of Nuclear Weapons, 1 July 1968, 729 UNTS 161, [1973]
ATS 3, 7 ILM 8809 (1968).) (entered into force 5 March 1970). For more information on the
exact terms of the treaty, including specific non-proliferation requirements of Non-Nuclear
Weapons States such as Iran, see Nuclear Threat Initiative, “Treaty on the Non-Proliferation
of Nuclear Weapons”, online: Nuclear Threat Initiative <www.nti.org/treaties-andregimes/treaty-on-the-non-proliferation-of-nuclear-weapons/>.
32 “Iran nuclear crisis: Can talks succeed?”, BBC News (25 November, 2014), online: BBC
News <www.bbc.com/news/world-middle-east-11709428>.
33 IAEA, Implementation of the NPT Safeguards Agreement and relevant provisions of Security
Council resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1835 (2008) in the Islamic Republic
of Iran” International Atomic Energy Agency, GOV/2009/35 (19 February 2009) at 3-4, online:
IAEA <www.iaea.org/sites/default/files/gov2009-35.pdf>.
34 Amir Paivar, “EU imposes new sanctions on Iran”, BBC News (15 October 2012), online:
BBC News <www.bbc.com/news/world-middle-east-19947507>; for a complete list of
sanctions imposed by the European Union, see European Union Restrictive measures (sanctions)
in force (updated 15 January 2016), online: European External Action Service
<eeas.europa.eu/cfsp/sanctions/docs/measures_en.pdf.>.
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Iran’s refusal to comply with IAEA‘s demands also resulted in the
United Nations Security Council passing four resolutions demanding
Iran’s suspension of all uranium enrichment and heavy water activities. 35
It also restricted Iran’s acquisition of nuclear and ballistic materials. 36
Again, such measures were specifically designed to induce Iran to engage
in international negotiations constructively, by facilitating discussions
between Iran and the United States, China, France, Germany, the United
Kingdom (UK) and Russia, in what was deemed the “E3+3 Process”. 37
Such negotiations were undertaken in hopes of persuading Iran to fulfill
its non-proliferation obligations via the 1968 Non-Proliferation Treaty.38
The E3+3 negotiations subsequently gave way to the assembly of
the “P5+1 campaign,” an international working group consisting of the
UN Security Council (the United Kingdom, the US, France, China and
Russia) plus Germany to dissuade Iran from continuing the use of highly
enriched uranium as part of its nuclear programme.39 In November 2013,
the P5+1 successfully negotiated the first international accord committing
Iran to curbing its sensitive nuclear activities in exchange for temporary
international sanctions relief. 40 On 24 November 2014, a “Joint Plan of
Action” (JPOA) commemorating the agreement between the P5+1 and
Iran was reached, providing for very limited and reversible sanctions
relief for Iran in exchange for its commitment to take specific steps
towards halting the progress of its nuclear weapons programme and
allowing for increased transparency and monitoring by the International
Atomic Energy Agency. 41 Although such measures provided Iran with
35
For a complete list of UN Security Council sanctions against Iran see Global Policy,
“Resolutions on Iran,” online: Global Policy
<www.globalpolicy.org/security-council/index-of-countries-on-the-security-councilagenda/iran/49102.html>.
36 Ibid.
37 Steven Blockmans, “Diplomatic Spin: EU-3 talks on Iran’s nuclear file”, CEPS Commentary
(21 November 2014), online: Centre for European Policy Studies
<www.ceps.eu/system/files/CEPS%20Commentary%20on%20Iran%20S%20Blockmans.p
df>.
38 Ibid.
39 Lee Smith, “Understanding the P5+1 Nuclear Negotiations With Iran”, The Weekly Standard
(13 November 2014), online: Weekly Standard
<www.weeklystandard.com/blogs/understanding-p51-nuclear-negotiationsiran_818963.html>.
40 See Franssen & Morton, supra note 10.
41 “Sanctions Update: U.S. and EU Ease Sanctions against Iran,” Covington & Burling, LLP
E-Alert International Trade Controls (22 January 2014), online: Covington & Burling LLP
<www.cov.com/files/Publication/dd7f0e41-af6d-4d7b-bcb0-
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US$ 7 billion worth of sanctions relief, under the JPOA a majority of the
US and European sanctions regimes still remained in place, including key
oil, energy, banking, insurance, and financial sanctions, as well as
restrictions on energy, shipping, and port sectors. 42
Relying on various waiver authorities in Section 1245(d)(1) of the
National Defense Authorization Act and Section 302 of the Iran Threat
Reduction and Syria Human Rights Act of 2012, the JPOA specifically
allowed for the lifting of sanctions against non-US persons not otherwise
subject to US limitations that engaged in specified dealings with Iran —
such as Airbus Industrie and various international oil companies which
provide Iranian national airlines with aviation fuel.43 More importantly, it
also allowed for the easing of sanctions to implement favourable licensing
policies under which US persons, US-owned or controlled entities, and
non-US persons involved in the export of items subject to US jurisdiction
can request authorisation from the Office of Foreign Assets Control
(OFAC) to engage in transactions to ensure the safe operation of Iranian
commercial passenger aircraft.44
f5e958ba4f05/Presentation/PublicationAttachment/133086b9-35cd-4314-a1faf6671bd19d90/Sanctions_Update_US_and_EU_Ease_Sanctions_Against_Iran.pdf>.
42 Ibid.
43 Ibid.
44 Iran Joint Plan of Action, signed between the United Kingdom, the United States, China,
Russia and Germany at Geneva, (24 November, 2013) at 3, online: European External Action
Service <eeas.europa.eu/statements/docs/2013/131124_03_en.pdf>.
According to OFAC’s Statement of Licensing Policy on Activities Related to the
Safety of Iran’s Civil Aviation Industry, the activities that may be licensed include, but are
not limited to, the exportation and re-exportation of services related to the inspection of
commercial aircraft and parts in Iran or a third country; services related to the repair or
servicing of commercial aircraft in Iran or a third country; and exports or re-exports of goods
or technology, including spare parts, to Iran or a third country. However, the range of civil
aircraft parts that OFAC may license under this new policy may be restricted to non-sensitive
parts classified as “EAR99” under the Export Administration Regulations, as evaluated
under the standards of the Iran-Iraq Arms Nonproliferation Act of 1992 (Iran-Iraq Act, Pub L
102-484, 106 Stat 2571 (23 October 1992)), which contains a provision that has historically
been construed to require the denial of license applications for exports or re-exports to Iran
of US-origin good listed on the Export Administration Regulations’ Commerce Control List.
Although the Iran-Iraq Act does have a provision allowing the President to waive
such restrictions, it is not clear that he has done so or would be prepared to do so. The US
Government will also not impose retaliatory sanctions on non-US financial institutions that
conduct or facilitate financial transactions relating to the type of activities covered under
OFAC’s Licensing Policy, or on non-US persons who “materially assist, sponsor, or provide
financial, material, or technological support for, or goods or services to or in support of” Iran
Air in connection with activities intended to ensure the safe operation of commercial
passenger aircraft.
This is in stark contrast to the actions taken by the US in 2011, at which time Iran Air
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Led by US representatives in Vienna, Austria, the P5+1 reached a
final “Joint Comprehensive Plan of Action” (or JCPOA) in July 2015, in
which decisive limitations on Iran’s nuclear programme were exchanged
for permanent, comprehensive international sanctions relief. 45 Although
the JCPOA raised the possibility of a permanent repeal of US sanctions for
the first time since the Iranian Revolution began, it also extended the
conventional arms embargo for five years and restrictions on ballistic
missile technology for an additional eight. It also provided for an
automatic “snap-back” of repealed sanctions against Iran within 65 days
of any potential failure to meet the JCPOA’s terms. 46 Such threats were
defeated, however, when Iran was found to be in full compliance of the
terms of the JCPOA for the scale back of its nuclear energy programme by
IAEA investigators and permeant sanctions relief was granted on 16
January 2016.
III.
THE CRY HEARD AROUND THE WORLD: THE
EFFECT OF US AND INTERNATIONAL
SANCTIONS ON IRANIAN PEOPLE AND
AVIATION
Although the debilitating effect of international sanctions was felt
for years throughout Iran predating permanent sanctions relief, such
restrictions were particularly devastating to the exuberance and wellbeing
of Iran’s aviation industry. As justification for employing past sanctions
directly affecting Iran Air, or Homa (IR), as Iran’s official national airline,
the US has claimed that IR provided “material support and services” to
and other Iranian carriers were named “Specially Designated Persons” under Executive
Order 13382 (Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters,
70 FR 38567 (28 June 2005) and the Weapons of Mass Destruction Proliferators Sanctions
Regulations” (31 CFR Part 544) which prohibited US persons from engaging in any
transactions with those designated as such and any property thereof within jurisdiction of
the US, despite whatever effects such designations could have on aviation safety in Iran at
the time. See 76 FR 40772 (11 July 2011).
45 For more information on the terms of the JCPOA see Julian Borger, “Iran nuclear deal
reached in Vienna”, The Guardian (14 July 2015), online: The Guardian
<www.theguardian.com/world/2015/jul/14/iran-nuclear-deal-expected-to-beannounced-in-vienna>.
46 Ibid. Although consensus for the JCPOA was reached amongst members of the P5+1, the
agreement facedstill faces extreme political opposition by opponents in both Israel, and the
US. See also, James Fallows, “What if Barack and Bibi Are Both Right?”, The Atlantic (13
August 2015), online: The Atlantic
<www.theatlantic.com/international/archive/2015/08/israel-opposition-irandeal/401129/>.
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the Iranian Revolutionary Guard (IRG),47 making allegations that the IRG
had taken control of IR passenger jets to transport rockets and missiles as
special cargo —some of which to neighbouring and openly hostile Syria.48
A majority of sanctions effecting Iranian aviation, however, were
first promulgated by Executive Order 12959, which states that US
manufacturers or firms cannot sell and export aircraft, engines and spare
parts, or communication, navigation and surveillance (CNS) equipment to
Iranian air carriers, companies or agencies, regardless of whether it was
new or used. 49 Nor could firms in Europe, the Middle East or other
countries worldwide re-sell (or re-export) most US-origin equipment to
Iranian air carriers. 50 Similarly, firms (including European airlines)
providing maintenance for Iranian air carriers could not provide such
services if it involved the installation or replacement of US origin parts.51
An exception to such restrictions, however, was established for items or
services crucial to “aircraft safety,” permitting equipment, engines, parts
and support to be sold to Iranian air carriers and aviation-related entities
in the interest of civil aviation safety, allowing for the provision of
“specific licenses” issued on a case-by-case basis for the exportation of
goods, services and technology. 52 Such exception allowed for US-origin
parts and components to be exported to Iran directly or via third parties.
The exception applies not only for Boeing aircraft, but also for non-USassembled aircraft, such as commercial airplanes manufactured by Airbus
Industrie of France, but only after “consideration” of such exceptions by
the Office of Foreign Assets Control (OFAC), which— according to
various Iranian authorities —failed to grant few, if any, exceptions at all.53
47
Kim Ghattas, “US imposed economic sanctions on Iran Air”, BBC News (23 June 2011),
online: BBC News <www.bbc.com/news/world-us-canada-13897272>.
48 Ibid.
49 See Executive Order 12959, supra note 15. For additional specific sanctions affecting Iranian
civil aviation industries see Iran Sanctions Act, 50 US . § 1701 Sec 5(a)(2)(B) (1996).
50 Ibid.
51 Islamic Republic of Iran, Continuity of the United States Trade Embargo on the Civil Aviation
of the Islamic Republic of Iran and the Safety Deficiencies Arising Out of It, ICAO Informational
Paper, Theme 2 Topic 2.3: Improving aviation safety, unified strategy to resolve Safetyrelated deficiencies, ICAO Doc DGCA/06-IP/31 (15 March 2006) at 3.
52 Ibid (citing 31 CFR § 560.528 (2005)).
53 Ibid at 4. Conversely, although Iran has often complained that the US has not allowed Iran
Air exemptions to buy spare parts for its aging fleet, in fact, the Bush Administration issued
a license for such exports, however it was Boeing that was unable to make the sale. See
Clawson, supra note 6.
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Before the institution of such sanctions, the Iranian aviation
industry — IR in particular — was considered to be a prominent member
of the global aviation industry elite. Before the Iranian Revolution
occurred in 1979, IR was at the top of its game, becoming the launch
customer of the then-ground-breaking extended range Boeing 747 SP
(Special Performance)54 and starting negotiations to begin Middle Eastern
service of the prestigious Concorde supersonic jet. 55 It connected a
network of travellers in the United States, Europe, Asia and elsewhere
with Tehran and other destinations in the Middle East, allowing it to
amass a strong reputation that it “stood with a select group of airlines at
the industry’s pinnacle.”56
Now conversely, after 36 years of sanctions before permanent
sanctions relief was granted, Iranian airlines were simply struggling to
keep their planes — and their passengers — alive. Desperate for new
airplanes and crucial parts, decisive quantitative data confirmed that the
various international trade embargoes and sanctions affecting Iran made
air travel in Iran more dangerous. More than 1000 people have died in at
least 15 plane crashes in Iran between 2001 and 2011,57roughly equating to
about 15% of all aviation-related fatalities for aircraft seating 19 people or
more for that period of time. 58 After several protests from the Iranian
Delegation to the International Civil Aviation Organization (ICAO) about
the effect of these policies on Iranian aviation, ICAO recommended that
industry experts look into the sanctions’ rumoured effects. 59
In a 2005 working paper submitted to the ICAO Secretary Generate
and the General Assembly, the Iranian delegation expounded upon the
deadly effect of the sanctions in myriad ways. The report found that such
restrictions prevent Iran from having free access to aviation markets
54
For more information and technical specification for the 747 SP see “B747SP Website”,
www.747sp.com.
55 Aaron S Goldblatt & Roozbeh Aliabadi, “How sanctions relief will impact Iran’s civil
aviation industry”, The Hill (5 June 2014), online: The Hill <thehill.com/blogs/congressblog/foreign-policy/208085-how-sanctions-relief-will-impact-irans-civil-aviation>.
56 Ibid.
57 Matt O’Sullivan, “The plot to take three Qantas jumbos to Iran”, The Sydney Morning Herald
(9 March 2013), online: Sydney Morning Herald
<www.smh.com.au/business/the-plot-to-take-three-qantas-jumbos-to-iran-201303082frbs.html>.
58 See “Statistics, Causes of Fatal Accidents by Decade”, Planecrashinfo.com, online:
<www.planecrashinfo.com/cause.htm>. The total number of aviation-related fatalities
between 2001 and 2011 worldwide is approximately 7,130 deaths.
59 Ibid.
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worldwide, keeping them from fulfilling safety requirements for the
orderly growth and preservation of civil aviation in Iran. 60 Unable to
modernise its carriers’ fleets, the 2005 study and other various inquiries —
such as the 2010 ICAO Universal Safety Audit — confirm that Iranian
carriers are unable at present to fulfill most requisite ICAO aviation safety
and maintenance standards and recommended practices (SARPs) under
the Annexes of the Chicago Convention because they were denied access
to updated aircraft and aircraft spare parts and post-sale services around
the world.61
Some of the most significant safety issues noted in the report as
being prevalent in Iranian aviation were, but are not specifically limited
to:
(1) the lack of adequately educated and qualified safety inspectors
commiserate with the level of civil aviation activities in Iran;62
(2) an inadequate process to verify that all Air Operating Certificate
(AOC) holders and foreign air operators comply with national
regulations, international standards, AOCs and corresponding
operations specifications;63
(3) the absence of any revised acceptable procedure for the issuance
and renewal of certificates of airworthiness, specifically the review
and retention of all essential documents during the related
procedure;64
(4) institution of proper surveillance activities for detailed oversight
procedures as part of requisite airframe inspection programmes; 65
(5) no proper programme for the rectification of any such
deficiencies discovered during the requisite inspection
programme;66
(6) no established programme to achieve an acceptable level of
safety in the provision of Air Traffic Services (ATS);67 and
60
Islamic Republic of Iran, Adverse Effects of U.S. Trade Embargo on Civil Aviation Activities of
the Islamic Republic of Iran, ICAO Legal Committee, 35th Sess, Agenda Item 27, Working Paper,
ICAO Doc A35-WP/297 (10 February 2004) at 1. [Working Paper 297].
61 Thomas Whalen, “Lift the sanctions,” Airline Business (October 2006) at 90.
62 ICAO Universal Safety Oversight Audit Program, Final Report on the Safety Oversight Audit
of the Civil Aviation System of the Islamic Republic of Iran (October 2011)), Appendix 1-2-01.
63 Ibid, Appendix 1-2-02.
64 Ibid, Appendix 1-5-02
65 Ibid, Appendix 1-5-03
66 Ibid, Appendix 1-5-04
67 Ibid, Appendix 1-7-03
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(7) Iran’s failure to apply for formal certification of its eight major
international aerodromes, which currently do not comply with
international requirements established by ICAO standards ICAR
114 and ICAS 114.68
Furthermore, as a result of these deficiencies, Iran and its carriers were
additionally unable to meet the steady demand in growth of local and
global air traffic due to access issues to state-of-the-art CNS equipment. 69
With regards to legal ramifications of the sanctions, ICAO found
that the US and other international restrictions were specifically contrary
to participating ICAO Member States’ responsibilities as established by
Article 44 of the Chicago Convention. 70 The Chicago Convention
established ICAO in 1944 as an agreement by all Member States to abide
by a single, unified code of international laws applicable only to civil
aviation.71 The Chicago Convention requires Member States to carry out
the “aims and objectives” of international civil aviation as established in
the Convention, including the avoidance of discrimination, the promotion
of safety, and the development of all aspects of international civil
aeronautics. 72 Article 4 of the Chicago Convention specifically requires
signatories to refrain from using civil aviation for any purpose
inconsistent with the primary aims of the Chicago Convention. 73 Citing
the deleterious effects of US sanctions on Iranian civil aviation, Iran and
its supporters argued that the US sanctions violated Article 4 of the
Chicago Convention. 74 Thus, because Article 43 of the Chicago
Convention established ICAO to carry out the ‘aims and objectives’ of the
Chicago Convention as set forth in Article 44, Iranian advocates argued
that ICAO is uniquely situated to effectively renounce the US sanctions
and declare the US in violation of the bedrock principle of safety in the
68
Ibid, Appendix 1-8-01
See Working Paper 297, supra note 60at 3.
70 See Convention on International Civil Aviation, 7 December 1944, 61 Stat 1180, TIAS No 1591,
15 UNTS 295, Can TS 1944 No 36, ICAO Doc 7300/9, art 44 [Chicago Convention].
71 See Paul S Dempsey, Public International Air Law (Montreal: McGill University Press, 2008)
at 34.
72 Islamic Republic of Iran, “The Safety Deficiencies Arising Out of the United States
Sanctions Against the Civil Aviation of the Islamic Republic of Iran,” ICAO Economic
Commission, 36th Sess, Agenda Item 40: Regulation of international air transport services,
Working Paper, ICAO Doc A36-WP/275 (20 September 2007) at 3.
73 See Chicago Convention, supra note 70, art 4.
74 Article 4 of the Chicago Convention provides:
Each controlling State agrees not to use civil aviation for any purpose inconsistent
with the aims of this Convention
69
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Chicago Convention.75 Indeed, as stated by Jamalodin Zavichi, Iran Air’s
General Manager in Frankfurt, “This is a human rights violation;
passengers are being forced to suffer from inconveniences despite the fact
that they have nothing to do with the political conflict”.76
Although ICAO did make a finding denouncing US foreign policy
with respect to Iran, stating that political differences existing between the
US and Iran at that time as parties to the Chicago Convention should not
be used as instruments of foreign policy, 77 ICAO’s efforts were largely
unsuccessful in persuading the US to change its approach until
negotiations for the JCPOA were undertaken in mid-2015.
IV.
THE DENIGRATION OF IRANIAN AVIATION
AS A RESULT OF THE “CISADA EFFECT”
As a direct result of US, European, and other international sanctions
targeting Iran, there are numerous critical safety and technical deficiencies
prevalent within Iranian airplanes, aerodromes, and CNS. One of the most
detrimental impacts of the sanctions, however, was the limitation of Iran’s
access to fuel.78 According to the German Ministry for Economic Affairs,
German oil companies were technically permitted to sell kerosene to IR
under current European regulations, with sanctions only becoming
applicable once sales volumes exceeded US$ 5 million per year. However,
no major oil company was willing to conduct such sales, fearing they
would adversely affect their business operations in the United States.79
Consequently, such actions caused a chain reaction, convincing other
multinational firms to abandon business pursuits in Iran due to potential
economic and political implications, causing companies such as
Caterpillar and General Electric (plus their foreign affiliates who would
not normally be covered by US sanctions) to pull completely out of Iran. 80
75
See Working Paper 297, supra note 60 at 4.
Gerald Traufetter, “The Geopolitics of Jet Fuel: Sanctions Create Headaches for Iran Air in
Europe”, Spiegel (1 October 2012), online: Spiegel
<www.spiegel.de/international/world/sanctions-create-problems-for-iran-air-in-europea-858886.html?>.
77 See Working Paper 297, supra note 60 at 5.
78 See , supra note 49, Sec 5(a)).
79 See Traufetter, supra note 76.
80 See Clawson, supra note 6.6. Siemens and Toyota Motorcars closely followed suit to the
Caterpillar and GE withdrawals.
76
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Due to such fuel access issues, Iran’s oil ministry, the revenue of
which dwindled after EU oil sanctions imposed in 2011, raised the price
of aircraft fuel by three-and-a-half times for domestic flights and enforced
international market rates for overseas destinations. 81 To make matters
worse, the oil ministry refused to provide Iranian airlines with any
additional aviation fuel until an outstanding debt of US$ 285 million as a
result of the price surges was completely paid off.82 This dispute led to an
unprecedented one-day halt in domestic flights from Iran to the EU in
February 2013.83 The Central Bank of Iran, which was also affected by US
sanctions in 2011, faced difficulties in transferring US hard currency into
Iran, and was thus unable to consistently supply the airlines with US
dollars at the normally-subsidised rate (which was higher than the official
rate, but lower than the open market rate), resulting in Iranian airlines
running up additional debts with airports and aviation corporations
overseas.84
In an effort to help Iranian airlines meet their increasing costs,
however, the newly-installed government of Mahmoud Ahmadinejad in
2005 allowed Iran’s 17 airlines to increase ticket fares by 65 per cent for
domestic flights and almost double the original fare for overseas
destinations.85 High inflation, which is currently set at 28.7 percent, but
believed to be far higher in actuality, coupled with the fall of the Iranian
rial, which has dropped by over 60 per cent over the course of 2013, also
adversely affected passenger numbers, leading aviation industry analysts
to fear that the financial crisis in Iran, in conjunction with existing
sanctions, may have further eroded the poor quality of Iranian aviation. 86
Despite Ahmadinejad’s efforts to resuscitate the airlines, President
Obama delivered another fatal blow in the wake of Congressional
approval of CISADA in 2010, specifically warning large oil companies to
abandon their business relations with Iran. Although the Obama
Administration later recanted the statement, claiming the warning was
really only applicable to oil production projects already in Iran, the
damage was already done, causing the oil industry to heed the warning
81
Najmeh Bozorgmehr, “Sanctions buffet Iranian airlines”, Financial Times (21 February
2013), online: Financial Times <www.ft.com/intl/cms/s/0/eccdecfe-79c4-11e2-901500144feabdc0.html#axzz3WZl2lLEU>.
82 Ibid.
83 Ibid.
84 Ibid.
85 Ibid
86 Ibid.
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and cancel all contracts for the delivery of jet fuel to all Iranian airlines,
even including those to privately-owned Mahan Air. 87 Similarly, fuel
corporations in 13 European destinations followed suit, refusing to supply
fuel to Iranian airliners after CISADA came into effect, 88 causing IR and
other Iranian airlines to subsequently adopt several fuel saving measures,
including flying at slower speeds to save fuel.89
Another significant, yet more obscure effect of CISADA was the
subsequent denial of simulator access and other crucial flight training
resources to Iranian airlines.90 The installation of additional US sanctions
in 2011 also caused another subsequent closure of European airspace to IR
planes for four days. 91 This ban was later permanently extended to
exclude all IR Airbus A320, Boeing 727 and 747 airplanes — two thirds of
IR’s entire fleet — from European airspace. However, the EU justified its
actions by claiming the ban was for safety reasons and unrelated to Iran’s
political status.92
Additional restrictions on airframe movements due to CISADA
resulted in the increase of voluntary contractual obligations imposed on
aircraft vendors, requiring them to take added precautions to ensure
second-hand planes did not end up in Iran in use by sanctioned airlines. 93
Limitations on airport infrastructure and investment capital for
expansions due to increases in volume and heightened security also
became unintentional results, prompting concern over the poor state of
Khomeini International Airport in Tehran (IKA), which had been strained
to the breaking point due to steady increases in air traffic and the demands
of increased security measures put in place after 9/11.94 Furthermore, such
deficiencies caused IKA to fail to meet requisite standards of aerodrome
safety and security as established in Annex 14 of the Chicago
Convention, 95 and were subsequently identified as lacking in the ICAO
87
Ibid.
“Iran Air Bypasses IATA Sanctions”, Payvand Iran News (28 November 2011), online:
Payvand Iran News <www.payvand.com/news/11/nov/1296.html>.
89 Ibid.
90 See Working Paper 297, supra note 60at 5.
91 See “Iran Air Bypasses IATA Sanctions”, supra note 88.
92 “EU imposes flight ban on Iran Air over safety”, BBC News (6 July 2010), online: BBC News
<www.bbc.com/news/10529236>.
93 See “Iran Air Bypasses IATA Sanctions”, supra note 88.
94 See Goldblatt & Aliabadi, supra note 55.
95 For more information on ICAO safety and security requirements as promulgated by
Annex 14, see ICAO, Annex 14 to the Convention on International Civil Aviation, Aerodromes, 10th
ed (July 2010) [Annex 14].
88
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Universal Safety Audit as well.96 Such deficiencies also led authorities in
the United Kingdom and Canada to advise travellers not to use the airport
due to significant safety concerns with IKA’s runways and other crucial
infrastructure, highly discouraging foreign airlines from operating flights
to and from IKA due to higher than normal liability risks. 97 In addition to
taking on such risks, airlines willing to maintain operations at IKA had to
do so despite the applicability of immensely complicated sanctions to nonUS companies, heavy limitations on the exchange of Iranian currency and
other financial transactions, and intense international scrutiny of
corporations willing to do business with or in Iran.
Lastly, another far-reaching consequence of CISADA was the
International Air Transport Association’s (IATA)’s decision to suspend IR
from its Billing and Settlement Plan (BSP), due to IATA’s interpretation of
US sanctions as applying to all IATA membership. 98 IATA is an
international trade association of the world’s airlines that supports many
key areas of aviation activity to help formulate industry policy on critical
aviation issues. 99 One key way in which IATA supports its member
airlines is through its Division of Financial and Distribution Services
(FDS), which provides services such as the BSP. The BSP is a system
designed to facilitate and simplify the selling, reporting and remitting
procedures of IATA Accredited Passenger Sales Agents 100 as well as
96
See ICAO Universal Safety Oversight Audit Program, supra note 62, Appendix 1-8-01-06. Such
deficiencies identified at IKA include, but are not limited to: the lack of aerodrome
certification per ICAO standards, the failure to produce aeronautical data related to
navigational standards utilised as part of the approach path utilised at IKA, the poor state of
marking throughout the permanent and temporary movement areas, and the complete
absence of a safety management system.
97 “Imam Khomeini International Airport opens despite safety concerns”, The Free
Library(2014), online: The Free Library
<www.thefreelibrary.com/Imam+Khomeini+International+Airport+opens+despite+safety
+concerns.-a0132060751</a>.
98 For more information on the International Air Transport Association’s Billing and
Settlement Plan see www.iata.org/SERVICES/FINANCE/BSP/Pages/index.aspx.IATA,
“Billing and Settlement Plan (BSP)”, online: IATA
<www.iata.org/SERVICES/FINANCE/BSP/Pages/index.aspx>.
However, Iranian officials have called into question the application of UUS sanctions
to IATA, a Canadian corporation incorporated under Canadian law. See “Sanctions make
IATA stop clearing funds for Iran Air”, Iran Times (2011), online: Iran Times <irantimes.com/sanctions-make-iata-stop-clearing-funds-for-iran-air/>.
99 See IATA, “About Us”, online: IATA <www.iata.org/about/pages/index.aspx>.
100 For more information on IATA accredited passenger sales agents, see IATA, “Fact sheet
— IATA Agency Program”, online: IATA
<www.iata.org/pressroom/facts_figures/fact_sheets/pages/agency.aspx>.
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improve financial control and cash flow for BSP Airlines.101 Because of the
international nature of commercial civil aviation, the collection and
settlement of revenue through various services such as ticket sales can be
difficult, given the variation of international taxation requirements,
currency values, and geographical distances amongst airlines. The BSP
simplifies revenue reporting and collection requirements for member
airlines by centralizing them into a single, unified service overseen by
IATA. As a consequence, Iranian airlines such as IR were left to navigate
the complex task of international revenue collection and reporting
requirements on their own. This incidentally impacted IR’s ability to
expand global services to carry passengers and cargo, and engage in
interline or code-sharing arrangements with other airlines unwilling to
negotiate agreements with IR without the collection of revenue through a
centralised source such as the BSP. To make matters worse, banking
sanctions restricting the flow of Iranian currency and transactional access
to other US or US-affiliated banks further crippled IR’s ability to engage
in external business arrangements, such as fee collection arrangements
with other airlines — essentially isolating IR and its ability to grow its
market share through joint partnerships or other external agreements.102
Despite the realistic consequences of sanctions restraining IR and
other Iranian airlines from pursuing advantageous agreements with other
airlines, this did not specifically equate to a de facto prohibition against
approval of international scheduled service on the part of Iran or any other
destination State unless specifically prohibited by law — as was the case
at one time between Iran and the United States. Currently, Iran has
bilateral air service agreements permitting international air service to and
from Iran in force with several major destinations, such as the United Arab
Emirates 103 and India. 104 However, this does not mean that previous
banking, oil and other significant economic sanctions already did not have
a secondary chilling effect upon specific States’ willingness to engage with
Iran in the negotiations necessary to approve and maintain scheduled
commercial routes. For example, direct travel from Iran to the United
States and other North American countries, or vice versa, has been mostly
101
“Billing and Settlement Plan (BSP)”, supra note 98.
See Sec.CISADA, supra note 21, sec 102(a)(7)); and ”Sanctions buffet Iranian airlines”,
supra note 81, respectively.
103 See “Infrastructural Development — Aviation Agreements, UAE inks air transport
relation agreement with Iran, UAEinteract (15 January 2015), online: UAEinteract
<www.uaeinteract.com/news/default3.asp?ID=361>.
104 See India, “Bilateral Air Services Agreements” at 86, online: Directorate General of Civil
Aviation <dgca.nic.in/bilateral/Bilateral.pdf>.
102
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unavailable since the Iranian Revolution. 105 Similarly, travel from Iran to
and from the Europe has equally been restricted at times due to European
sanctions, however, such bans have only applied to specifically named
individuals, and were not applicable to international travel at large.106
V.
HOW THE IRANIAN AVIATION INDUSTRY
HAS COPED
Despite the deleterious effects of 36 years of targeted sanctions on
IR and its Iranian counterparts, Iranian airlines continued to conduct their
scheduled flights on a routine basis, notwithstanding the state of its
overworked and dilapidated fleet. According to aviation information
website Airliners.net, the average age of a Boeing 747-200 before
retirement has been between 25 to 30 years, accumulating approximately
100,000 flight hours and 30,000 to 40,000 cycles before being taken out of
the air.107 In comparison, the average age of IR’s 747s still in active service
was between 38 to 40 years, with an estimated 120,000+ flight hours and
41,000 to 43,000 cycles — however, the exact figures are not known. 108 Due
to the current state of IR’s fleet and the cumulative effect of international
sanctions, Iranian airlines are eager to acquire Western aircraft now that
the sanctions have been lifted due to their superior safety records and
reputations for being inherently robust.109 A spattering of deadly accidents
and incidents involving Russian-made aircraft occurring in 2009 and 2010
only increased that desire.110
105
See Clawson, supra note 6.
Cornelius Adebahr, “Easing EU Sanctions on Iran”, Carnegie Endowment for
International Peace, Atlantic Council (16 June 2014), online: Carnegie Endowment for
International Peace
<carnegieendowment.org/2014/06/16/easing-eu-sanctions-on-iran>.
107 See Airliners.net forum Discussion, “Average Life Expectancy of a Boeing 747”, online:
Airliners.net <www.airliners.net/aviation-forums/general_aviation/read.main/666480/>.
108 See “747 Production List—Iran Air,”, online: Planespotters.net
<www.planespotters.net/Production_List/Boeing/747/?p=14&sort=airline>.
The approximated total flight hours and cycles of IRsIR’s Boeing 747s listed is an
approximation by the author based upon reported flight hours as indicated by IR timetables
listed on the official company website, <www.iranair.ir/timetable>.
109 See O’Sullivan, supra note 57.
110 See Goldblatt & Aliabadi, supra note 55.
106
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After 11 September 2001, the second-hand plane market became
“the greatest buyers’ market of all time” due to the sudden and
exaggerated decline in air travel due to public fear of subsequent terrorist
attacks.111 American aircraft, which had historically been sought after by
second-hand buyers due to their reputation for being well-maintained,
became the most desired aircraft in the Middle East. 112 In an attempt to
bypass sanctions in force at the time on such aircraft, many Iranian airlines
drastically re-wrote international aircraft purchase agreements and other
contracts in order to surreptitiously remove them from the scope of US
sanctions, preventing Iranian airlines from acquiring new aircraft
altogether.113 As 99 per cent114 of all aircraft are bought and traded in US
dollars, however, it was almost impossible for Iranian airlines to escape
the world’s largest economy (and thus, application of US sanctions) when
negotiating acquisition contracts for all new planes while sanctions were
in place.115
To get around prior restrictions, Iran’s airlines bought and rented
spare parts and second-hand aircraft through surreptitious “middlemen”,
mostly based in countries such as Turkey, but also the United Arab
Emirates, Ukraine and the central Asian States.116 Whenever aircraft were
purchased by Iranian airlines, sellers had to carry out “due diligence”
exercises and include strict, specific clauses in the sales agreement
reinforcing the buyer’s obligation to comply with relevant international
export controls and regulations.117 Thus, many of these sellers had to set
up “clean” companies in countries unaffected by sanctions solely for the
purpose of facilitating transfers of aircraft to Iran. 118
To solve limitations on access to aviation fuel, IR representatives
were quoted as being “prepared” to export jet fuel to neighbouring states
unaffected by US sanctions to fuel its own jets. 119 To solve shortages of
fuel in Europe, Iran managed to find smaller kerosene dealers willing to
111
Ibid.
Ibid.
113Ibid.
114Ibid.
115 See O’Sullivan, supra note 57.
116 Ibid.
117 Ibid.
118 For a particular example of the lengths some Iranian airlines must go to in order to acquire
additional aircraft, see ibid.
119 Statement from Alireza Zeighami, Deputy Oil Minister and former Head of the National
Iranian Oil Refining and Districtuion Company, ibid.
112
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sell to Iranian airlines, for which they had to pay a large premium.
Sometimes, Iranian pilots were even forced to settle fuel bills with their
own cash.120
Although sanctions inevitably increased costs and threatened
safety, an unexpected perk of the western pressures put on Iranian airlines
caused a boost in the capability of the country’s aviation specialists to do
whatever it took to keep Iranian planes in the air. Of IR’s 250 total
commercial frames, about 150 are flying while the rest are “not functional”
due to lack of spare parts. 121 Due to the loss of a 40-year maintenance
contract with Lufthansa Technik in Germany, IR was forced to complete
maintenance, including heavy maintenance, on all aircraft themselves,122
paying a premium sometimes of up to 30 percent more for parts than nonIranian airlines. 123 Because of the sanctions, IR was also forced to draw
spare parts with increasing difficulty from the black market. 124 If
appropriate spare parts could not be located, IR mechanics were
oftentimes forced to substitute parts from other aircraft types or, in
extreme cases, even fashion parts replacements themselves.
After the implementation of the P5+1/Iran Joint Plan of Action and
subsequent discussions of permanent sanctions relief in the JCPOA in
2015, Ali Reza Jahangirian, Head of Iran’s Civil Aviation Organization,
asserted that Iranian airlines were ready to buy at least 40 new passenger
planes every year for the next ten years once all applicable sanctions were
lifted, to begin replacing airframes in Iran’s overworked and undermaintained fleet.125 Right now, the average age of IR’s fleet is above 22
120
See Traufetter, supra note 76.
Ibid.
122
See Goldblatt & Aliabadi, supra note 55 (“The lack of available spare parts has been a
persistent challenge for Iran Air’s engineers and technicians, who have done a remarkable
job keeping these aircraft in the air given these circumstances”).
123 Ibid.
124 Thomas Erdbrinkjuly, “Iran’s Aging Airliner Fleet Seen as Faltering Under U.S.
Sanctions”, New York Times (13 July 2012), online: New York Times
<www.nytimes.com/2012/07/14/world/middleeast/irans-airliners-falter-undersanctions.html?_r=0>. (“Our planes are completely worn out,” Captain Shahbazi said,
emphasizing that mechanics were doing what they could to keep the planes flying safely.
That was getting harder and harder, he said. “In reality, each flight can be our last.” The
Captain continues, “It doesn’t have to be like this,” he said, citing Iran’s oil wealth. “The U.S.
can allow us to buy the planes”).
125 Parisha Hafezi, “Iran to buy 400 airliners if sanctions lifted, top official says”, Reuters (1
May 2014), online: Reuters <www.reuters.com/article/2014/05/01/us-iran-sanctionsaviation-idUSBREA400CF20140501>.
121
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years old,126 with the average age of its long-range Boeing 747 fleet being
over 35 years, making it the seventh-oldest 747 fleet in the world. 127 IR’s
Airbus fleet is not much younger, as several of the airline’s A300s were
acquired in the 1980s and 1990s, in addition to some second-hand A320s
acquired in the early 2000s.128
After the consummation of the JPOA agreement in 2015, Iranian
aviation officials received “positive signals” from Western companies
such as Boeing and General Electric about the potential for receiving spare
parts and other aircraft support once the JCPOA agreement was
consummated — guaranteeing that IR will now gain additional access to
spare parts and new airframes in 2016. 129 Such signals were decisively
confirmed when the US Government issued temporary licenses to Boeing
to sell spare parts to Iran in early 2015. 130 Such licenses included the
preliminary sale of limited commercial plane parts and services for IR’s
vintage Boeing 747 classic and Airbus A300 and A310 international
fleets.131 Similarly, General Electric won US Treasury approval in 2015 to
service 18 jet engines sold to IR in the late 1970s, which will be completed
at facilities owned by GE or Germany’s MTU Aero Engines.132
A.
THE EFFECT OF SANCTIONS ON THE IRANIAN
PEOPLE
Notwithstanding the promise for a better future with the lifting of
sanctions, the current state of affairs leaves ordinary Iranians angry and
afraid to fly. Although quick to blame their leaders for the state of US-Iran
relations, a survey of Iranian citizens reveals that many Iranians are upset
over prior American measures taken against Iran, and the unintended
effect such measures have had on the safety of ordinary Iranians. “I
support the pressure on our leaders,” said Janet, a 54 year-old homemaker
quoted in Thomas Erdbrinkjuly’s article “Iran’s Aging Airliner Fleet Seen
as Faltering Under US Sanctions” in the New York Times — who did not
want to give her full name for fear of the authorities. “But I don’t
understand why the US wants to hurt us, normal people. Don’t we have
126
Ibid.
See Goldblatt & Aliabadi, supra note 55.
128 Ibid.
129 Ibid.
130 See Hafezi, supra note 125.
131 Ibid. For a complete listing of Iranian airlines current fleet see Airfleets, online:
<www.airfleets.net/iran>.
132 See Hafezi, supra note 125
127
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the right to travel safely?”133
Arguments for permanently lifting US and other economic
sanctions continued to gain popularity before implementation of the
JCPOA in 2015 as a result of Iran’s recent capitulation to the IAEA’s
observation demands with regards to their nuclear programme and the
initial success of JPOA sanctions relief. With regards to the cumulative
effect of US and other international foreign policy on Iranian civil aviation,
however, it has become strikingly obvious that the sanctions issue has not
just been a policy issue, but also a humanitarian one.
From an economic perspective, sanctions have contributed to a
significant drop in Iranian oil exports—from 2.5 million barrels per day in
2011 to about 1 million barrels per day in 2013. 134 As a result, Iran’s
revenue from oil exports has declined 55 per cent from its peak in 2011,
causing a massive decline in the Iranian gross domestic product and a
subsequent blow to the Iranian economy. 135 85 per cent of Iranians say that
sanctions have hurt their personal livelihoods, including 50 per cent who
say the sanctions have hurt them personally a great deal. 136 Half of
Iranians have not had enough money to pay for adequate food or shelter
within the past year, and 34 per cent say that their standard of living is
deteriorating.137
With regards to civil aviation specifically, half of Iran’s population
has concerns about reaching their destinations while traveling on Iranian
airlines138 — citing old airplanes with technical deficiencies as a result of
long-term sanctions as the main reasons why they feel unsafe to fly. 139
Although civil aviation is the fastest and most convenient mode of
transport in Iran, its popularity amongst the general population has
recently declined as a result of several major accidents. 140 Between 1980
133
See Erdbrinkjuly, supra note 124.
Sabrina M Peterson, “Iran’s Deteriorating Economy: An Analysis of the Economic Impact
of Western Sanctions” International Affairs Review, online: International Affairs Review
<www.iar-gwu.org/node/428>.
135 “Sanctions”, Iran Matters: Best Analysis and Facts on the Iranian Nuclear Challenge from
Harvard’s Belfer Center, Harvard University, online: Harvard University
<iranmatters.belfercenter.org/sanctions>.
136 Ibid (citing Gallup poll, 16 November 2013).
137 Ibid (citing Gallup poll, 13 July 2013).
138 Azam Majidi, et al, “Impact of sanctions on Iranian airlines: How people in Iran feel about
air travel safety?” (2014) 10 Int’l J of Disaster Reduction 67 at 67.
139 Ibid.
140 Ibid at 68.
134
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and 2010, there were approximately 1,800 casualties related to Iranian
airline accidents, 59 per cent of which took place between 2000 and 2010
alone, costing 736 civilian lives.141 21.1 per cent of Iranians surveyed in a
Gallup poll commissioned in 2013 had unpleasant memories of an air
accident that had either happened to them, their family members, relatives
or friends. 142 Only 19.3 per cent were completely confident that they
would safely reach their destination were they to fly on an Iranian airline
affected by sanctions, with 41.7 per cent responding that they were
somewhat confident, 27.98 percent were reasonably confident, 22.02 per
cent were somewhat concerned, and 26.49 per cent were very concerned
about reaching their final destination were they to travel on an Iranian
airline.143
In comparison, 72 per cent of Americans surveyed in a comparable
survey felt very or somewhat confident about the safety standards of
major commercial airlines, whereas only 26 per cent felt not too, or not at
all confident.144 However, only 47 per cent felt much more, or somewhat
more confident about the safety of flying on airlines compared to prior
years, and 49 per cent felt somewhat less or much less confident after the
well-publicised crash of an Alaskan Airlines jet in 2000. 145 In general, 18
per cent of Americans are “very afraid” of flying (even after the events of
September 11), while 26 per cent of “somewhat afraid”, which goes down
significantly amongst frequent flyers. 146 Thus, these numbers prove that
the occurrence of major airline crashes — notwithstanding previous
perceptions — has negative influences on public perceptions of airline
safety, regardless of in Iran or other first-world countries such as the
United States. Also of note, of those Iranians surveyed, 40 per cent had
never travelled by air, citing economic restrictions and high-ticket prices
as the main reasons why.147 Of those who had flown, 11 per cent of the
participants mentioned the expensive costs of air travel, whereas 10 per
cent cited fear of old planes as the major cause as to their reservations to
travel by air. 148 When comparing Iranian airlines to their foreign
counterparts, Iranians considered Iranian national airlines to be less safe,
141
Ibid.
Ibid at 69.
143 Ibid at 70.
144 George Gallup Jr., The Gallup Poll: Public Opinion, 2000 (Wilmington, DE: Scholarly
Resources, Inc., 2000) at 52-53.
145 Ibid.
146 Ibid at 42.
147 Ibid at 72.
148 Ibid.
142
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although wealthier Iranians overall felt safer when they travelled by air,
citing their ability to afford to travel with foreign airlines. 149
B.
WHAT PERMANENT SANCTIONS RELIEF WILL
ACCOMPLISH AS PART OF THE JCPOA
Because US and international sanctions have had such a devastating
effect on Iran and its once-bustling aviation industry, permanent sanctions
relief brings the hope of a better life to many Iranians in several different
ways. First and foremost, the lifting of sanctions against the Iranian oil
industry opens up vast oil and gas reserves and fuel various business
opportunities around the world.150 It also will encourage Iran’s battered
economy to recuperate by reversing the devastating blow sanctions have
dealt against the Iranian rial in relation to the US dollar, which has
suffered drastic increases in inflation and the consumer price index over
the years since the Iranian Revolution began.151 Encouragingly, since the
election of new Iranian President Hassan Rouhani in 2013, the rial has
strengthened by 20 per cent against the dollar and Tehran’s stock market
has increased in value by 65 per cent due to a more “competent”
leadership approach than that undertaken by Mahmoud Ahmadinejad
and Rouhani’s other predecessors — showing that improvement is on the
rise.152
Elimination of sanctions will also allow for Iran to adjust to the
continued expansion of global air travel without sacrificing safety
standards. More specifically, elimination of sanctions allows for the
expansion of Imam Khomeini International Airport in Tehran and
upgrades to air traffic control systems to improve airport efficiency and
reduce congestion and lower accident risks in Iranian airspace. It will also
allow for financing of new security systems mitigating threats to
international civil aviation originating within Iran.153 Lifting sanctions will
additionally boost immediate capital investment into an underserved
market of 76 million people with some of the world’s biggest oil
reserves. 154 Iran is in need of an immediate and diverse array of new
149
Ibid at 73.
See Hafezi, supra note 125.
151 See “Iran Matters,” supra note 135.
152 Ibid.
153 See Goldblatt & Aliabadi, supra note 55.
154 Tim Hepher, “Iran airline eyes fleet growth plans post-sanctions”, Reuters (7 June 2014),
online: Reuters
<www.reuters.com/article/2014/06/07/us-iranair-jets-idUSKBN0EI0IY20140607>.
150
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aircraft and technology, thus potentiating a capital outlay of hundreds of
millions of dollars to global aviation aircraft and technology
manufacturers — with an immediate need of 30 new aircraft, and a need
for an additional 40 more each year for the next ten years. 155 Lastly, the
lifting of sanctions will increase overall origin and destination traffic to
and from the Middle East, as well as encourage the utilisation of Iranian
airports as connection points to other destinations around the world.
Although temporary sanctions relief measures have somewhat
eased economic and political pressures,156 Iranians and Iran’s civil aviation
industry will continue to be affected both directly and indirectly until
complete and total multilateral sanctions relief is achieved. Before the
repeal of US sanctions on Iran on 16 January 2016, the longstanding effect
of such economic restrictions had motivated some Iranians to take matters
into their own hands. One such Iranian is Captain Houshang Shahbazi,
who started an independent campaign to persuade the Obama
Administration before the JCPOA to lift sanctions on spare parts and new
planes, amassing nearly 125,0000 Iranian signatures overall. 157 The
155
See Hafezi, supra note 125. Although this particular source quotes 30 aircraft are needed
immediately, other sources have quoted Farhad Parvaresh, Chairman and Managing
Director of Iran Air as saying up to 100 narrow and wide body aircraft are needed
immediately should sanctions be lifted. See Hepher, supra note 154. Specific narrow body
aircraft of interest to IR according to this source are the Airbus A320, Boeing 737-800, and
wide body aircraft such as the Airbus A330, A350, Boeing 777, Boeing 787 and Boeing 747800. IR is also interested in small business jets manufactured by Bombardier and Embraer SA
in order to compete for routes departing to and from fast-growing Middle Eastern hubs. But
see note 156, infra.
156 On 24 March 2016, the US Office of Foreign Assets Control (OFAC) took an incremental
step towards liberalising aviation-related commercial trade between the US and Iran by
issuing a general license intended to provide US citizens greater flexibility to enter into
certain preliminary contractual agreements related to the export or re-export to Iran of
commercial passenger aircraft and related parts and services. Under General License GL-I,
the general prohibition on US citizens from entering into contracts—contingent or
otherwise— involving Iran or the Government of Iran has been modified to allow citizens to
engage in activities “that are ordinarily incident to the negotiation of or entry into a contract
involving Iran or the Government of Iran” related to the export/re-export of commercial
aircraft and related parts and services. The General License does not authorise US entities to
export aviation-related materials to Iran; under current law, OFAC requires a specific license
to contract with Iran and the General License also does not permit US citizens to contract
with persons or entities on the Specially Designated Nationals list. The General License does,
however, authorise US citizens to negotiate “executory contracts, executory pro forma
invoices, agreements in principle, executory offers capable of acceptance such as bids or
proposals in response to public tenders, binding memoranda of understanding, or any other
similar agreement” that are preliminary in nature and do not consummate any particular
transaction. See US Department of Treasury, Office of Foreign Assets Control (OFAC),
“Terrorism and Financial Intelligence” (26 February 2016), online:
US Department of Treasury
<www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-ForeignAssets-Control.aspx>.
157 See Erdbrinkjuly, supra note 124.
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petition’s opening words were poignant, perhaps adequately reflecting
the sentiments of many Iranians by stating, “I ask President Obama to take
responsibility and think of us, the Iranian people. We should not lose our
lives over politics”.158
Thus, Iran and its people would have continued to suffer if the
terms and conditions of the JCPOA had not been fulfilled, proving Iran’s
ability to permanently comply with the agreement’s limitation of Iranian
nuclear energy development. Fulfillment of the JCPOA’s terms and repeal
of sanctions notwithstanding, however, when asked about the future of
Iranian aviation, Farhad Parvaresh, Chairman and Managing Director of
Iran Air, was steadfast in his belief that his airline and the industry as a
whole will continue to survive. “Regardless of the state of world politics
in which we must operate, with a little ingenuity and a lot of hard work,
Iranian aviation will continue its mission to provide air travel to the
people of Iran”. He said, “We will persevere”.159
158
159
Ibid.
See Traufetter, supra note 76.
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