Expanding Iran Sanctions to Aviation

August 26, 2026 by Leave a comment

A new list of sanctioned parties in the aviation industry could be on the horizon!

There is an existing Executive Order from the first Trump Administration that authorizes the Treasury Department to identify target persons and businesses as Specially Designated Nationals (SDNs) when the Secretary finds that the targets operate in certain sectors of the Iranian economy. This has traditionally included construction, mining, manufacturing, and textiles.

In a new order, the Treasury Department is adding aviation to the list of affected sectors. The new order is expected to be published in the Federal Register, tomorrow.

“I hereby determine that section 1(a)(i) of E.O. 13902 shall apply to the aviation, digital asset, gold, shipping, and technology sectors of the Iranian economy. Any person determined to operate in these sectors shall be subject to sanctions pursuant to section 1(a)(i).”

Publication of a Determination Issued Pursuant to Executive Order 13902, Federal Register (August 27, 2026).

This does not automatically impose sanctions – instead it authorizes the Secretary of the Treasury to add people and/or businesses ot the list of Specially Designated Nationals. It is typically illegal to export goods to Iran without a license, so naming Iranians as SDNs may have relatively little practical effect for American businesses. This new determination will authorize the Secretary to name SDNs from other countries who participate in the Iranian economy, and this could allow an expansion of sanctions to include more people and more companies from third countries who are doing business with Iran, especially those supporting the Iranian aviation industry.

When a person is named as an SDN, that person (and that person’s property) is blocked. This typically prevents all transactions with the blocked person. This is not just export transactions – the SDN sanctions programs typically apply to any other sort of transactions as well. Someone in the U.S. who is holding the blocked person’s property must retain that property and must file periodic reports with the Treasury notifying them of the blocked property that is held.

We expect to see more aviation companies being added to the Treasury sanctions lists as SDNs. This action highlights the importance of checking your export business partners against the US sanctions lists on every transaction.

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The Next Round of Tariffs May Exclude Aviation

February 23, 2026 by 1 Comment

Mere hours passed between the Supreme Court ruling that the IEEPA Chapter 99 tariffs were illegal, and the President issuing executive orders establishing the next set of tariff paradigms.

The White House issued an executive order calling for the establishment of new tariffs under Section 122 of the Trade Act of 1974 (19 U.S.C. 2132). The order demands that the government establish new tariffs setting a 10% duty rate on all foreign goods imported into the United States, starting tomorrow (February 24, 2026). The HTSUS code associated with this new tariff is expected to be 9903.03.01.

There is good news for industry: many aviation parts will be exempt from this new tariff. The exemption will apply to a list of HTSUS tariff codes that are typically associated with aircraft, engines, and their parts. The list is nearly 600 codes long, so it encompasses a significant number of aircraft parts classifications. Always check your HTSUS codes against this list for each import, to assess whether the additional duty applies to your import. The tariff provision that exempts aircraft parts from the new section 122 duty rate is expected to be 9903.03.05.

Section 122 permits the President to use tariffs to deal with large and serious United States balance-of-payments deficits. The United States has the world’s largest negative balance of payments; however, this provision only permits tariffs of up to 15% for up to 150 days. After that the tariffs can only be extended by an act of Congress.

Please note: this blog article is based on the Administration’s executive order. Tariff rules can be (and have been) changed between the executive order that announces them and the formal publication in the Federal Register. So please don’t make any legal moves until you have reviewed the final published language.

UPDATE: the 10% tariff has been established as predicted, and when into effect this morning (Feb 24, 2026).

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Saying the Silent Part Out Loud: Aircraft Parts Will Continue to be Subject to Changing Tariff Rules

September 6, 2025 by Leave a comment

The White House has given the industry more guidance on their plans for import tariffs that may be applied to aircraft parts. In an Executive Order published last night, the Administration confirmed that the United States will set aircraft parts duty rates at unique levels for each trading partner.

“The list of imports for which I may be willing to provide a zero percent reciprocal tariff rate is … [description of other products]; aircraft and aircraft parts…. Given the complex, fact-specific, and sensitive nature of negotiations and the national emergency declared in Executive Order 14257, among other relevant considerations, the imports that might receive a reciprocal tariff rate of zero percent may be different for each final agreement between a foreign trading partner and the United States.”

This confirms that the Administration has no intent to honor the Agreement on Trade in Civil Aircraft provisions (including the statutory provisions that implemented that agreement) that provide for duty-free entry of aircraft and aircraft parts. Instead, the Administration expects to set varying tariff levels for imported aircraft parts, based on the country of origin. This can be very complicated to assess for some parts.

For example, an aircraft component that was produced in France might be a product of France when it sold into the aftermarket by the manufacturer. But the substantial transformation doctrine dictates that if the same part was original equipment on a Boeing aircraft produced in the United States, then it became a product of the United States because the fabrication of the complete aircraft (incorporating the component) was a complex assembly. Thus, two otherwise identical aircraft parts might actually be treated differently upon their import into the United States, with the former being a product of France subject to the EU HTSUS provisions, and the latter being a product of the United States that may eligible for duty-free return (assuming that it has not been advanced in value while abroad).

Aviation has a robust record-keeping practice, but the historical duty-free treatment of aircraft parts has meant that the record-keeping practices evolved to support airworthiness, rather than for the purpose of meeting import tariff rules. Modern aircraft parts record-keeping practices may be inadequate in some cases to support common exceptions that should otherwise apply to the U.S. import of aircraft parts.

In June, ASA published an argument to the United States government suggesting that current United States law does not permit duties on aircraft parts, because of (1) the Agreement on Trade in Civil Aircraft and also (2) statutory law that implemented the duty-free treatment of aircraft and aircraft parts. That discussion included the following text:

Any effort to impose tariff-based restrictions on commercial aviation must take into account the
Agreement on Trade in Civil Aircraft. The Agreement on Trade in Civil Aircraft requires
signatories to eliminate tariffs on aircraft and aircraft parts. The Agreement has been signed by
the United States and by many of its major aviation trading partners, including Canada, France,
and the United Kingdom

In 1979, Congress approved the ATCA. That law authorized the president to accept the final
language of the Agreement on Trade in Civil Aircraft and established that it would become
effective when the President finds that other countries have accepted the obligations of the
agreement with respect to the United States. The current implementation of this in the U.S.
Code recognizes that Congress approved the ATCA. While President Carter signed the
Agreement in 1979, it was President Reagan who issued the proclamation described in the
authorizing legislation. At least since 1984, then, the ATCA has been recognized as part of the
law of the United States. The mechanism by which Congress approved the ATCA and
authorized the President to proclaim the ATCA makes it a “congressional-executive agreement.”

Congress has passed other statutory provisions to implement ATCA. For example, the ATCA is
defined in by statute as “the Agreement on Trade in Civil Aircraft approved by the Congress
under section 2503 of [title 19 of the U.S.C.].” Congress has identified that the negotiating
objectives of the United States include eliminating tariff barriers through expanding membership
in the ATCA. General Note 6 of the HTSUS establishes which goods are eligible for duty-free
treatment under the ATCA, and the current language of that General Note was established in
1996 by Congress in the Miscellaneous Trade and Technical Corrections Act of 1996. Thus,
the duty-free treatment of aircraft is established under both the Agreement on Trade in Civil
Aircraft (an international agreement) and also by implementing domestic legislative language.
Eliminating those provisions means eliminating statutory law, as well as eliminating U.S.
obligations under an international agreement. [citations omitted]

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White House Issues Round One of the Ukraine-Russian Sanctions

February 22, 2022 by 2 Comments

The White House has announced that it will be issuing sanctions “to respond to President Putin’s action to purportedly recognize the so-called Donetsk and Luhansk People’s Republics (DNR and LNR) as “independent” states.” What does this announcement mean for ASA members who have Russian or Ukrainian business partners?

At the root of the sanctions is an Executive Order that was signed last night. It defines the “Covered Regions” as the areas covered by the Donetsk People’s Republic (DNR) and the Luhansk People’s Republic (LNR). It also authorizes the Secretary of the Treasury to identify other parts of Ukraine to be identified as a part of the Covered Regions (typically this would be accomplished through an OFAC rule, so it will be important to watch whether this scope expands to include other parts of Ukraine).

  • The Executive Order prohibits investment in the Covered Regions;
  • The Executive Order prohibits export (or other sale/supply) to the Covered Regions;
  • The Executive Order prohibits import from the Covered Regions;
  • The Executive Order prohibits participation by a United States person in a transaction by a foreign person that would have been prohibited in the United States.

The Executive Order also permits the addition of people and entities to the Specially Designated Nationals (SDN) list, so it will be important to check our business partners against this list for each export transaction (you should already be doing this).

Previously issued licenses may not cover this new Executive Order, so they may be inadequate to overcome this new Executive Order’s restrictions. Thus even a previously licensed transaction may require a new license if it is within the scope of the Executive Order.

Don’t forget that there are existing sanctions against Russia and the Crimean region. So make sure that you comply with those, as well. The White House has signaled that more sanctions may be issued, soon, against Russia; this means that keeping abreast of the changing regulations and standards is especially important.

There are special wind-down rules. If you need to engage in a wind-down operation to exit business in the Covered Regions, then make sure you consult with an attorney, and review the OFAC wind-down general license.

In summary, if you’ve been buying from or selling to a partner in a Covered Region, then you will need to assess your aircraft parts transactions to ensure that they remain in compliance with the law – full compliance may require a new license, or it may require termination of the business. I would recommend against any aircraft parts transaction that involves the Covered Regions unless you have the advice of an attorney who understand this area of the law.

Resources:

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New White House Policy on Anti-Competitive Behavior Could Affect Aviation

July 9, 2021 by Leave a comment

The President is expected to sign a new Executive Order on competition, today. Although the Order is not yet available,the Administration has already released a Fact Sheet about the planned Executive Order. The title of the new Executive Order is expected to be “Executive Order on Promoting Competition in the American Economy.”

The official purpose of this Executive Order is to promote competition. The Administration says it is taking aim at large companies that adversely impact competition. But every new policy has the potential for unintended consequences, so we will be carefully watching this Executive Order and the regulations that are generated to implement it.

Here are some highlights from the Fact Sheet of items that could potentially affect aviation businesses:

  • The Executive Order encourages DOT to issue rules requiring that air carriers offer certain ancillary fee refunds to consumers.
  • The Executive Order encourages DOT to issue rules requiring greater clarity and disclosure of ancillary fees (including baggage, change, and cancellation fees).
  • The Executive Order encourages the FTC to ban or limit non-compete clauses that affect the labor market. Such clauses are fairly normal for employees who have access to economically-sensitive confidential information in our industry. A ban on such clauses could affect existing relationships and cause companies to pursue other strategies for protecting sensitive data.
  • The Executive Order encourages the FTC and DOJ to prevent employers from sharing wage and benefit information with one another.
  • The Executive Order encourages the FTC to establish rules on surveillance and the accumulation of data. This is meant to apply to “Big-Tech” but it could easily spill-over into obligations on anyone who collects data and uses the internet (i.e. everyone).
  • The Executive Order encourages the FTC to issue rules against restrictions on using independent repair shops. This is meant to apply to cell phones, but this could set a precedent that applies to aviation repair.
  • The Executive Order calls for passage of the “Protecting the Right to Organize Act.” This Act would expand the reach of the Fair Labor Standards Act, would permit secondary strikes (under which a union can strike in support of someone else’s rights, even when it does not have a direct interest in the issue), and expanding whistleblower protection.
  • The Executive Order describes an Administration policy of greater scrutiny of mergers, including acquisition of small companies. This is meant to apply to internet service companies but it could easily be applied to other industries (including aviation).

It often takes several days after an Executive Order is announced for it to be published in the Federal Register. We will be watching carefully for this one, as well as watching the regulations and policies that are generated in its wake.

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Yes, I Read the Headlines … But Pay Your Rent, Anyway

August 10, 2020 by 1 Comment

The President has signed an Executive Order entitled “Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners.”  It was signed on Saturday (August 8).

The Administration is claiming that the President’s Executive order will put a stop to evictions.  It is being described as an eviction moratorium.  It is not an eviction moratorium.  ASA members should not use it as a basis for failure to pay rent – neither home rent nor business rent.

There are two key points for ASA members wondering about their rights under the Executive Order.  First, the Executive Order is focused only on residential rentals.  It does nothing for business rentals.  Second, the Executive Order does not actually prevent evictions – instead it directs study to see what might be done.

An eviction moratorium recently ended.  Some evictions from “covered dwellings” were temporarily prevented under the CARES Act section 4024, which prevented eviction filings (for non-payment of rent) for 120 days and also restricted charging tenants for fees or penalties related to nonpayment of rent.  That renter protection expired on or about July 25, 2020.

Unlike Congressional law which affected certain properties, this Order has no legislative effect.

The Executive Order does four things:

  • It directs HHS and CDC to consider whether the US needs to do anything to limit evictions in order to prevent the spread of COVID-19 from one State into another.
  • It directs Treasury and HUD to identify whether there are funds that could be used as rental financial assistance (interestingly, there is emergency authority under 42 U.S. Code § 5174 for the President to pay for rent but the President may need Congress to authorize funds).
  • It directs HUD to “take action” to promote the ability of renters and homeowners to avoid eviction.  But the actual action is left to the discretion of HUD.
  • It directs FHFA to “review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners resulting from hardships caused by COVID-19.”

In other words – the Executive Order directs various departments and agencies to look for solutions.  But it doesn’t actually provide any immediate solutions.

 

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