Today the Office of Foreign Assets Control cryptically announced a change in its FAQs relating to foreign aircraft that overfly or make emergency landings in Iran. The agency merely stated that it had revised FAQ 417 without describing the difference between the old and new FAQ or why the change was made. Of course, you might assume that OFAC wanted to make it clear that if your plane was about to fall out of the sky it was okay to make an unscheduled landing in Iran — passenger safety, and all that. But you would be wrong.

The old FAQ, which you can find here, said that non-U.S. airlines could overfly Iran and make emergency landings there as long as no payments were made to or through any of the specifically designated banks in Iran (like Bank Melli) or any entities on the SDN list (other than, of course, agencies and instrumentalities of the Iranian government). The new FAQ, however, adds a new wrinkle: the payments now cannot involve the U.S. financial system if a foreign carrier is involved; the U.S. financial system may only be used for U.S. carriers, which, under 31 C.F.R. § 560.522, are permitted  to overfly and make emergency landings in Iran.

This policy change comes on the heels of news reports (like this one and this one) that foreign carrier overflights over Iran have recently increased. Why? Because no one wants to get blown out of the sky while flying over Iraq or Ukraine. Both Air France and Virgin Atlantic have suspended flights over Iraq.

Of course, you may say, certainly foreign carriers can find non-U.S. financial institutions to handle the payments to Iran. That, of course, may be the case, although given all the recent huge fine on foreign banks for Iran transactions, many of these banks may simply be unwilling to run the risk of further penalties given the small amounts they are likely to make handling these payments.

One of the possibly unintended consequences of the heavy fines imposed on banks by the Office of Foreign Assets Control (“OFAC”) for violations of the vaguely and confusingly written Iran sanctions regulations is that banks overreact, exhibiting a Pavlovian response to anything with the word Iran involved and blindly blocking everything in sight. As a result, Iranian-Americans often have a difficult and unpredictable relationship with their own banks here in the United States. As recently reported by the Arizona Republic, Neda Tavassoli, an Iranian-American, had difficulty closing her purchase of a condominium when one of the banks involved needlessly blocked the account holding her funds for the down payment.

The story begins, improbably enough, when her ex-husband, who is also a U.S. citizen, was visiting his family in Iran and checked their joint account from a computer in Iran. The bank then froze that account. Subsequently the bank even froze an unrelated escrow account to which Ms. Tavassoli’s parents, also U.S. citizens, wired the down payment for the condo in issue. Neither Ms. Tavassoli, her ex-husband,  her parents nor the U.S. bank from which the parents wired the funds are on the SDN list, so there is no conceivable reason for these accounts to be blocked. None of these parties are even in Iran so there was not even a reason to reject the wire transfer to the escrow account, much less to block it.

Most importantly, checking the account from Iran, which got the whole business started, would not serve as a basis for blocking the account. Whether the bank broke any rules by providing the information back to Iran in response to the account query depends on whether that communication was “incident to the exchange of personal communications over the Internet” and therefore permitted by section 560.540 of the Iran regulations. But even if the exception in section 560.540 for Internet communications does not apply, the proper response by the bank was simply not to respond to the request, not to block the account.