Sale To Iran Intentionally Violated Trade Sanctions

The UK-based Balli Aviation Ltd. pleaded guilty today to two counts of criminal information in connection with its illegal export of a 747 from the United States to Iran.  Under the terms of the plea agreement, Bali agreed to pay a $2 million fine and five years of probation.

According to court documents, Balli used its subsidiaries, the Blue Sky Companies, to gain financing from Iran to purchase and export three 747s.  The jets were used for flights in and out of Iran.  The deal was a major violation of US export laws based on trade sanctions for Iran.

The case also alleged that Balli continued to conduct negotiations concerning buying, receiving, using, selling and delivering US-origin aircraft after being given a Temporary Denial Order (TDO).

The $2 million fine combined with a related $15 million civil settlement represents one of the largest fines for violations of export laws in the history of the US Department of Commerce's Bureau of Industry and Security (BIS).  BIS has agreed to waive $2 million of the fine if Balli has no further export control violations.

The five years of probation includes mandatory reporting of independent auditing of all export operations for Balli and its parent company, Balli Group PLC.  A denial of export privileges for the companies during this period will be suspended provided the companies pay their fines and obey export laws.

"Today's case should serve as further warning of Iran's continued efforts to circumvent sanctions and obtain US technology," said Adam J. Szubin, Director, Office of Foreign Assets Control (OFAC).

"As this case demonstrates, corporations that conduct business with Iran in violation of US export laws and sanctions face serious consequences," said David Kris, Assistant Attorney General for National Security.

FMI: www.commerce.gov