The U.S. Treasury Department has removed Fly Baghdad, also known as Iraq Express, from its sanctions list, along with two Boeing 737s registered in Iraq, after concluding the airline had made major operational changes and addressed the conduct that led to its designation. The action, published on 5 August 2026, restores the carrier’s ability to transact normally with banks, lessors, insurers, maintenance providers, fuel suppliers and distribution systems.
Fly Baghdad was placed under counterterrorism sanctions in January 2024 over alleged support for the IRGC Quds Force and allied groups. Treasury said the delisting followed an administrative reconsideration, but gave no details on the specific changes behind the reversal.
The decision covers aircraft YI-BAF and YI-BAN, both Boeing 737s previously treated as blocked property. Treasury also stressed that the move does not signal any broader change in U.S. policy toward Iran, the IRGC or other designated terrorist organisations.
Fly Baghdad has described the outcome as the end of a two-year compliance overhaul and the return of normal commercial operations. The carrier remains subject to other restrictions, including inclusion on the EU Air Safety List, which still bars it from flying in the European Union because of safety deficiencies.