US Treasury lifts sanctions on Iran Guards-linked Iraqi airline Fly Baghdad; maintains sanctions on its previously identified owner

The U.S. Treasury on Wednesday lifted sanctions on Fly Baghdad, an Iraqi carrier, and two of its aircraft, while sanctions against the company’s owner, Basheer Abdulkadhim Alwan al-Shabbani, remain in place. The airline and owner were originally designated in January 2024 over allegations that Fly Baghdad provided support to the IRGC's Quds Force and its proxy groups in Iraq, Syria and Lebanon. In a statement, a Treasury official cited that 'FBA (Fly Baghdad Airlines) has demonstrated major changes to their operations such that their listing is no longer warranted,' signaling a narrowed risk assessment rather than a shift in policy.¹

A Treasury official, speaking to AFP on condition of anonymity, said the removal followed the department's administrative reconsideration process, a routine mechanism that re-evaluates sanctions listings based on changes in designation criteria and party conduct.

The official also stressed that the action is 'not indicative of any shift in US policy toward the Government of Iran, the Islamic Revolutionary Guard Corps-Qods Force, any designated terrorist organisation, or any person who supports or acts on behalf of any of these.' It was described as a narrow, case-by-case adjustment rather than a signal of broader strategy toward Tehran.

News of the update appeared on the Treasury's website, with sanctions on Fly Baghdad removed and the airline's two aircraft unblocked, while the owner’s designation remained. The move is framed as a procedural improvement in the department's sanctions program, not a broader withdrawal of pressure on Iran or its proxies.