The U.S. has placed sanctions on Iraq's Fly Baghdad and its CEO, Basheer Abdulkadhim Alwan al-Shabbani, for assisting Iran-backed militant groups across the Middle East. The sanctions were announced on January 23, alongside a fifth round of sanctions on Hamas for using cryptocurrency to finance their operations. According to the U.S. Treasury Department (USDT), Fly Baghdad and its CEO have worked with the Islamic Revolutionary Guard Corps (IRGC) and Iranian proxy groups in Iraq, Syria, and Lebanon.

Why Did Fly Baghdad Receive U.S. Sanctions?

The U.S. has accused Fly Baghdad of providing military equipment and hundreds of personnel to the IRGC's Quds Force and Iran-backed militant groups across the region. These groups have played a role in multiple major events across the Middle East over the years, including the Syrian Civil War and the October 7 attacks in Israel. The Kuds Force used Fly Baghdad to deliver weapons to its partners in Syria. Meanwhile, Kataib Hezbollah used the airline to transfer personnel, weapons, and funds to Syria and Lebanon. Many of the Iran-backed groups, including the IRGC, are designated as terrorist organizations by the U.S. 

The USDT's Office of Foreign Assets Control released this statement about Fly Baghdad's involvement in the currently escalating tensions across the Middle East:

"In October 2023, following Hamas's horrific terrorist attack on Israeli civilians, Fly Baghdad was involved in the transfer of hundreds of Iraqi fighters, including fighters affiliated with U.S.-designated terrorist organization and Iranian proxy militia Asa'ib Ahl al-Haq (AAH) in support of the Iranian proxies' attacks on Israel."

Fly Baghdad's operations in Syria have occurred over several years, including support for the Syrian Civil War that has been ongoing since 2011. The airline's flights have shipped weapons to Damascus International Airport (DAM) for use by Iran-backed militant groups. Many of these entities are involved in the Syrian Civil War, which has killed over 300,000 civilians and created over 13 million refugees. The Iranian-made weapons were used to keep Syrian President Bashar al-Assad's regime in power during the war. Iranian groups also used Fly Baghdad for their operations in Lebanon.

The USDT said about Fly Baghdad's involvement in Syria:

"KH has been using Fly Baghdad to transport fighters, weapons, and money to Syria and Lebanon to prop up the Syrian regime. KH leaders used Fly Baghdad flights on multiple occasions to transport bags of U.S. currency and U.S.-made weapons obtained through battlefield collection from Iraq to Lebanon."

How Do Sanctions Affect Fly Baghdad's Operations?

The U.S. has listed two Iraq-registered aircraft owned by Fly Baghdad as blocked property for their involvement in illicit activities. The sanctioned planes are a Bombardier CRJ-200ER and Boeing 737-700 with registration numbers YI-BAF and YI-BAN, respectively. Fly Baghdad's other fleet comprises five Boeing 737-800s, one Boeing 737-900ER, and one Bombardier CRJ-900. How the U.S. identified the two specific aircraft and what will happen to the other planes is unclear.

Fly Baghdad reacted angrily to the U.S. sanctions, releasing this statement:

"The company will resort to the legal method to demand material and moral compensation. It is clear that the decision was based on misleading and unreal information that cannot stand up to the law." 

The sanctions ban Fly Baghdad from doing business with American entities and block them from accessing U.S. property and bank accounts. This announcement comes after the airline was banned from flying in European Union (EU) airspace in November for safety reasons. Due to Fly Baghdad's ban from working with American or European entities, Western passengers visiting Iraq must fly with a non-Western carrier. Iraqi Airways is also banned in the EU due to its poor safety record, with a recent incident involving a bear escaping its cage on a Boeing 737-800 at Baghdad International Airport (BGW).