On March 17, 2008, the Bureau of Industry and Security (“BIS”) issued a temporary denial order (“TDO”) against Iran’s Mahan Airways based on leases of three 747s to Mahan by Balli Aviation. The TDO has been renewed ever since, and Balli agreed to pay BIS a penalty of $15 million in connection with the leases. (BIS recently fined Balli $2 million for a late payment under the settlement agreement.)

BIS has now added Paris-based Zarand Aviation to the TDO based on a lease of an Airbus 310 by Zarand to Mahan. The Airbus 310 in question is now grounded for the forseeable at the Birmingham Airport in the United Kingdom. Although the aircraft was manufactured in and exported from France, BIS claims jurisdiction over the aircraft because it has U.S.-origin G.E. engines which are classified as ECCN 9A991.d and which constitute more than 10 percent of the value of the aircraft. Information on the leased 310-304 can be found here, including confirmation that the aircraft has two GE CF6-80C2A2 engines.

A Google search for Zarand Aviation suggests that it has little other business activity than the Mahan lease in question. The major effect, then, of this TDO will be to keep the aircraft grounded in the United Kingdom.

Mahan is supposed to have eight Airbus aircraft in its fleet.

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