By Grace Kim

The U.S. Treasury designated all 27 Iranian airlines on September 8, 2026, placing third States on a direct collision course between OFAC compliance and their duty under common Article 1 of the Geneva Conventions. The designations, issued under Executive Order 13902, suspend three Iran-related aviation authorizations, including overflight rights and permission for non-U.S. carriers to fly U.S.-origin aircraft into Iran.

What did the Treasury decide?

The move forms part of "Operation Economic Outcast," announced on August 24, 2026. Treasury Secretary Scott Bessent framed the campaign bluntly: "Those who stand with the United States will reap the rewards of our partnership. Those who tether themselves to Tehran should expect to share in the isolation of a withering regime." The Treasury statement added: "Every country will be given a defined timeline to shut down the Iran-related activity we have identified. If they fail to act, Treasury will act."

In a CNBC interview, Bessent set a deadline of September 23 and described the enforcement mechanism in concrete terms: "If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets, or you will be knocked out of the dollar system." He also said on X that "teams were dispatched across the globe to engage with countries and demand action against the Iranian regime."

The scale is total. Iran's active fleet stands at 75 aircraft operated by 23 airlines under the Civil Aviation Authority. Every one of those airlines appears on the OFAC list. The entire Iranian civil aviation system is now sanctioned.

The takeaway: this is not a targeted measure but a system-wide designation enforced through third-country conduct.

Why do ground handling services matter legally?

The services Bessent listed — fueling, landing services, ticketing — fall within "ground handling" as defined by IATA. Passenger handling, baggage handling, aircraft servicing and airside safety oversight all count.

Ground handling providers are not always private actors. Airports and handling services may be run by private companies, public-private entities, or State organs exercising governmental authority. A prohibition on serving Iranian aircraft can therefore constrain a third State's own governmental functions where the airport or provider sits inside the State apparatus.

The takeaway: the sanctions reach directly into the governmental infrastructure of non-U.S. States.

What does international humanitarian law require?

The analysis changes because an international armed conflict is ongoing between the United States and Iran. Alongside general norms, including non-intervention and human rights law, IHL rules governing IACs apply.

Article 33 of the fourth Geneva Convention prohibits collective penalties. The ICRC interprets this broadly: penalties of "any kind imposed by the authorities of a Party to the conflict on multiple persons or entire groups of persons," including "administrative measures, and other forms of harassment."

The ICRC identifies punitive purpose as the decisive criterion and holds that official statements by the sanctioning party serve as an indicator of that purpose. The authors note that such statements appear repeatedly from senior U.S. officials, including the President. On that basis, they argue that characterizing these measures as collective punishment "would not appear particularly difficult from a legal perspective." Collective punishment, while not a listed grave breach, constitutes a war crime under customary international law, per the ICRC commentary (paras. 2551–2552).

The takeaway: if the punitive purpose test is met, severity thresholds do not matter.

What must third States do under common Article 1?

Common Article 1 requires all States Parties to ensure respect for the Conventions. The ICJ reaffirmed this in its July 19, 2024 advisory opinion (para. 279). States must take reasonable measures to bring violations to an end and must refrain from encouraging, aiding or assisting them.

The ICRC commentary is explicit that this obligation operates independently of ARSIWA attribution rules. Support given "in the knowledge that such support will be used to commit violations of humanitarian law" would violate common Article 1 even if it does not amount to aiding or assisting a wrongful act under State responsibility law.

That matters here. Where private companies run ground handling, the State may still be obliged to use its available influence and control to prevent those entities from conduct that would violate the Conventions. Attribution is not the test. Influence is.

The takeaway: every Geneva Convention State Party now faces a choice between the dollar system and its treaty obligations.

What are the practical consequences for practitioners?

Counsel advising airports, fuel suppliers and handling agents must now assess two regimes at once. OFAC exposure threatens exclusion from dollar clearing. Common Article 1 exposure, if the collective punishment characterization holds, threatens complicity in a customary war crime. Aviation counsel, sanctions specialists and government legal advisers in third States should map which entities within their jurisdiction touch Iranian carriers and evaluate both risk tracks before the compliance deadlines expire.