Iraqi airline Fly Baghdad has canceled flights on all routes and suspended operations after the U.S. Treasury Department imposed sanctions against the carrier.

The U.S. Office of Foreign Assets Control (OFAC) on Jan. 22 sanctioned the airline and its CEO Basheer Abdulkadhim Alwan al-Shabanni for providing materiel support to Iranian-backed militias. The airline has denied being involved in any illegal activities, but Iraq’s government has since ordered an investigation into the allegations.

In a statement released on Jan. 25, translated from Arabic, Fly Baghdad said that “in accordance with the decision of the government and Prime Minister Mohammed al-Sudani, Fly Baghdad will cease operating flights from now until further notice.”

The statement added that the airline is unable to refund passengers for canceled flights as it is unable to access its bank accounts. It has therefore asked the Iraqi government to help to transport its customers to their destinations on other Iraqi and foreign carriers.

OAG Schedules Analyser data shows Fly Baghdad operated 32 routes prior to suspending operations, offering international flights to destinations including Beirut, Damascus, Dubai, Istanbul and Tehran. It had been scheduled to operate about 39,000 seats across its network during the week commencing Jan. 22, 2024.

OFAC alleges that Fly Baghdad has provided assistance to Iran’s Islamic Revolutionary Guard and its proxy groups in Iraq, Syria and Lebanon. This includes transporting fighters, weapons and money to Syria and Lebanon.

The U.S. sanctions came after the European Union on Nov. 30 banned Fly Baghdad from operating within its borders for not meeting international safety standards.