The U.S. Treasury Department removed counter-terrorism sanctions on the Iraqi airline Fly Baghdad and two of its aircraft on Wednesday [1], [2].
The decision marks a significant shift in U.S. diplomatic and security oversight in Iraq. By lifting these restrictions, the U.S. acknowledges a change in the airline's operational ties, potentially easing regional transport and signaling a move toward normalizing the carrier's business activities.
The Treasury said it had removed counter-terrorism sanctions from Iraq's Fly Baghdad [3]. The airline was previously sanctioned for providing assistance for the IRGC and its proxy groups in Iraq, Syria, and Lebanon [4]. This assistance had linked the carrier to the activities of Iran's Islamic Revolutionary Guard Corps, leading to the initial U.S. restrictions.
According to the U.S. Treasury, the carrier has changed its conduct and no longer supports IRGC activities, so the sanctions have been lifted [5]. The removal includes the specific delisting of two aircraft [1].
Fly Baghdad is one of three IRGC-linked entities that have seen sanctions lifted in this recent wave [6]. The move comes as the U.S. monitors the influence of Iranian-backed groups across the Middle East. The Treasury issued the decision from Washington, D.C., regarding the Baghdad-based airline [7].
U.S. officials have not detailed the specific evidence used to verify the change in conduct. However, the removal of these sanctions allows the airline to operate without the legal and financial hurdles associated with U.S. counter-terrorism designations. This includes the ability to engage in transactions and partnerships that were previously prohibited under federal law.
“The carrier has changed its conduct and no longer supports IRGC activities, so the sanctions have been lifted.”
The lifting of sanctions on Fly Baghdad suggests a tactical recalibration by the U.S. Treasury to reward behavioral changes in regional entities. By delisting the airline and two of its aircraft, the U.S. is leveraging economic incentives to decouple Iraqi infrastructure from Iranian military influence. This move may serve as a blueprint for other regional entities to distance themselves from the IRGC in exchange for reintegration into the global financial system.
