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IATA: Sanction threat forced Iran Air billing suspension

16:46 20 Oct 2011

IATA has justified its suspension of Iran Air from the services of its Clearing House payment system, arguing that the organisation could have been affected by US sanctions without the measure.

While it stresses that Iran Air has not had its membership of IATA revoked, the US government's tightening of restrictions on the carrier meant that, for the first time, a member carrier became the direct target of international sanctions.

"In light of this unprecedented development, IATA immediately initiated a review process whereby it sought to determine whether the processing of funds relating to Iran Air in the IATA Clearing House and Settlement Systems was likely to trigger the application of the US sanctions," said a spokesman for the airline organisation.

"This process included a detailed legal analysis of the effect of the US sanctions, including their potential extraterritorial reach to IATA as a Canadian entity, as well as an assessment of the mechanics of the IATA Settlement Systems as they relate to Iran Air."

The spokesman said that IATA concluded it could be "under serious risk" by providing services to Iran Air through the Clearing House.

"As a result, IATA determined that it had no other option but to suspend Iran Air from the IATA Clearing House and Settlement Systems with immediate effect," he added.

Tighter US sanctions have also been imposed on privately-owned Iranian operator Mahan Air, which is also an IATA member carrier.