The Treasury Department (search) added a Peruvian airline Wednesday to the U.S. government's list of entities suspected of links to drug trafficking.

The action applies to Aero Continente, which is now known as Nuevo Continente (search). Treasury said the company is a passenger and cargo airline based in Lima, Peru.

In June, the U.S. government ordered, pending further investigation, the freezing of any U.S. assets belonging to the airline. That followed President Bush's decision to designate the airline's founder, Fernando Zevallos Gonzales (search), as a significant foreign narcotics trafficker, subject to U.S. economic penalties.

Since that step in June, "the airline underwent various alleged changes in ownership and changed its name to Nuevo Continente. Despite the ostensible ownership changes, the airline was unable to demonstrate to the satisfaction of the Treasury Department that all ties with the airline's former owners had been severed," the department said.

Wednesday's action reaffirms that Americans are prohibited from doing business with the airline and maintains the blocking of the airline's assets in this country, Treasury said.