Baghdad (IraqiNews.com) – The United States has lifted Iraqi carrier Fly Baghdad from its sanctions list after deciding that the airline has made substantial operational adjustments, overturning limitations originally imposed due to suspected connections to Iran’s Islamic Revolutionary Guard Corps (IRGC).

Following an administrative review, the US Treasury withdrew two of the airline’s planes off the sanctions list but maintained sanctions on Basheer Abdulkadhim Alwan al-Shabbani, the company’s previously acknowledged owner.

Fly Baghdad was sanctioned in January 2024 after US officials accused it of aiding the IRGC’s Quds Force by transferring men and supplies to Iran-backed militias in Iraq, Syria, and Lebanon.

A US Treasury official told AFP that the airline had made significant changes to its business; thus, its categorization was no longer justifiable. The person emphasized that the move does not represent a shift in US policy toward Iran, the IRGC, or Tehran-backed extremist organizations.

The ruling benefits Iraq’s aviation industry, since sanctions have hampered Fly Baghdad’s access to international banking, insurance, and aircraft leasing while restricting its potential to grow abroad operations.

It also comes as Baghdad strives to enhance economic connections with Washington after a slew of large investment deals announced with US corporations in recent weeks in energy, banking, technology, and infrastructure.

While the airline has been removed off the sanctions list, the US has said that it would continue to target firms that assist Iran’s regional network of armed organizations, emphasizing that Fly Baghdad’s delisting was the consequence of operational adjustments rather than a reduction in pressure on Tehran.

For Iraq, the move is expected to boost confidence in the country’s aviation industry and potentially expand international air connectivity as the government works to boost tourism, business travel, and foreign investment.