Sanctions screening for aviation: lessors, operators, MROs and brokers

• Ownership through special purpose vehicles: aircraft are commonly owned and leased through SPVs, trusts and holding companies, so the party named on a lease is rarely the party that ultimately owns or controls it.
• Lessees you did not choose: an aircraft leased to one operator can be sub-leased, wet-leased or chartered onward to a party nobody screened.
• Parts and services are targeted too: sanctions measures against some countries and parties restrict the sale, supply, leasing, maintenance and insurance of aircraft and parts, which puts MROs and parts brokers in scope, not only lessors.
• Mobile assets: an aircraft can be flown into a restricted jurisdiction, so who operates it matters as much as who signed for it.
• Brokers and intermediaries: aircraft and parts often change hands through brokers, which hides the end user behind the counterparty.
• Private aviation: charter and private aircraft clients can include politically exposed persons and wealthy individuals whose ownership structures deserve a closer look.

1. 1

   Identify every party

   Lessor, lessee, sub-lessee, operator, guarantor, financier, maintenance customer, parts buyer and broker, recorded for each transaction rather than assumed from the contract.

2. 2

   Screen the parties and their owners

   Sanctions and PEP screening of each party, and ownership screening that looks through SPVs and holding companies to the people and companies that control them.

3. 3

   Check before the commitment

   Screen before a lease, sale, maintenance slot or parts shipment is agreed, not after the aircraft or the part has been delivered.

4. 4

   Monitor for the life of the contract

   Re-screen when lists change, because a lessee that was clean at signing can be designated during a long lease.

5. 5

   Record and escalate

   Keep the evidence of every check and decision, and send true matches to legal for the blocking, licensing or reporting decision.

Airlines, lessors, maintenance providers and parts brokers are generally not obliged entities under anti-money laundering law, which names banks, payment firms and a list of designated businesses and professions. Some aircraft finance and leasing activity can fall within financial services rules in some jurisdictions, so firms should check their own position. Sanctions law, however, applies to everyone: it prohibits dealing with designated persons and making funds or economic resources available to them, and an aircraft is an economic resource.

The FATF Recommendations require countries to implement targeted financial sanctions related to terrorism (Recommendation 6) and proliferation (Recommendation 7). Businesses apply them through the regimes of the places they operate, such as UN Security Council measures, the EU's restrictive measures, the US programmes administered by OFAC and the UK's financial sanctions administered by OFSI. EU and UK measures against some countries go further and prohibit the sale, supply, leasing and servicing of aircraft and parts to them. Under the OFAC 50 Percent Rule, a company owned by blocked persons can itself be blocked without appearing on any list.

Aircraft and many aerospace parts are also subject to export controls, such as the US Export Administration Regulations, which can follow US-origin items after they have left the United States. Export control compliance, from classification to licences and end-use checks, is the firm's own obligation, and screening a party against a list is only one part of it. on8.ai screening also covers US export-control and debarment lists, including the Consolidated Screening List with the BIS Entity List, the BIS Denied Persons List and ITAR debarments, and the Japanese and Taiwanese end-user lists. It holds no UK or EU export-control list, and classification, licensing and end-use checks remain the firm's own.

• Ownership screening: it should look through SPVs and holding companies and apply ownership rules such as the OFAC 50 Percent Rule, rather than screening only the name on the lease.
• Fuzzy matching: operator, lessee and supplier names arrive in many spellings, transliterations and trading names, and the matcher has to handle them.
• Clear scope: ask which lists are covered and whether aircraft identifiers published in sanctions records are matched. Check whether the export-control lists that matter to you are included.
• API and batch: screen a single lessee or parts buyer at deal time, and re-screen the whole lessee and supplier base in one run.
• Ongoing monitoring: long leases need re-screening when lists change, with alerts only when something changes.
• Explainable matches and evidence: every alert shows why it fired, and every check is recorded so the decision can be explained to a financier, insurer or regulator.