The U.S. Treasury removed counter-terrorism sanctions from Iraq’s Fly Baghdad Airlines and two aircraft, citing operational changes by the carrier that resolved previous links to Iran’s Islamic Revolutionary Guard Corps Quds Force. According to a Treasury official, the decision does not signal any broader policy shift toward the Iranian government or alter ongoing regional postures.
Sanctions Lifted Following Behavioral Changes
The U.S. Department of the Treasury announced on Aug. 5 that it lifted restrictions on Fly Baghdad Airlines Co (FBA), Iraq Express, and two Boeing 737 aircraft. The action, handled through the Office of Foreign Assets Control (OFAC) Specially Designated Nationals list review process, came after the carrier demonstrated significant adjustments to its operations. A Treasury official noted that “FBA has demonstrated major changes to their operations such that their listing is no longer warranted” and confirmed they have “addressed sanctionable conduct.”
The original penalties were imposed in 2024 due to alleged material support provided to the Quds Force and its militias. Despite the delisting, officials provided no specific breakdown of the operational modifications that prompted the reversal. The Treasury official cautioned that sanctions remain a flexible tool and could be reimposed at any moment if conditions warrant.
Did you know?
The Office of Foreign Assets Control regularly reviews the Specially Designated Nationals list to reassess entries when targeted entities alter their business practices or sever illicit ties.
Clarifying U.S. Policy Boundaries in the Gulf
According to the Treasury official, the move was “not indicative of any shift in U.S. policy towards Iran’s government, the Islamic Revolutionary Guards or any organization designated as terrorist.” Furthermore, officials confirmed the administrative action bore no relation to parallel U.S. diplomatic talks regarding a potential deal to end hostilities in the Gulf.
Reporting on the announcement was managed by Daphne Psaledakis, Ismail Shakil, and David Lawder, with editing oversight provided by Sanjeev Miglani under the Thomson Reuters Trust Principles.
Frequently Asked Questions
Why were Fly Baghdad Airlines sanctions removed?
The U.S. Treasury removed the sanctions because the airline demonstrated major changes to its operations and addressed past sanctionable conduct linked to Iran’s Islamic Revolutionary Guard Corps Quds Force.
Does this decision signal a change in U.S. policy toward Iran?
Can the sanctions be reinstated?
Yes. Treasury officials confirmed that sanctions against the airline and its aircraft can be reimposed at any time.
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