Is Boeing-Iran Air Deal at Risk? - Global Trade Magazine
  November 17th, 2017 | Written by

Is Boeing-Iran Air Deal at Risk?

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  • Charges: Islamic Revolutionary Guards may use Boeing jets in its operations.
  • Trump's Iran policy puts US aircraft maker’s deal with Iran Air at risk.
  • Trump: “I don’t know what’s going to happen with the [Boeing-Iran Air] deal.”

US President Donald Trump’s October 13 refusal to certify the Joint Comprehensive Plan of Action (JCPOA), will push the sale of 80 passenger jets signed from Boeing to Iran Air into uncertainty, according to a report on Al-Monitor, a news website that covers the Middle East.

This is the case, according to to the report, despite the confidence trying to be displayed by both sides.

Trump has said he has not made up his mind about the future of the contract. “I don’t know what’s going to happen with the deal,” he said in an October 22 interview. Trump has given the US Congress two months to decide whether to reimpose sanctions lifted under JCPOA.

The state-owned Iran Air negotiated the aircraft order after Iran and six world powers concluded the 2015 accord to impose restrictions on the Iranian nuclear program. In exchange, Iran was granted relief from nuclear-related sanctions. Sales of aircraft to Iran was specifically part of JCPOA. The order for 50 narrow-body Boeing 737 passenger jets and 30 wide-body 777 aircraft was secured in December 2016.

Iran Air has also ordered 100 passenger aircraft from European company Airbus and 20 turboprop regional planes from the Franco-Italian company ATR. Those companies have delivered nine aircraft, including three Airbus and six ATR planes.

The Office of Foreign Assets Control (OFAC) then issued licenses to assure the sale would proceed. US law mandates that aircraft manufacturers must obtain an OFAC license if more than 10 percent of components are of US origin. That means deals to purchase Airbus aircraft also need the green light from Washington.

IranAir claims its order is safe, even if the United States abandons the nuclear deal. “If the US pulls out of the JCPOA, this will not affect the OFAC licenses. … This will not affect Boeing’s contract with us,” IranAir CEO Farzaneh Sharafbafi stated on September 28.

But sanctions experts argue that OFAC licenses could easily be revoked, and nothing protects the order if the Trump administration decides not to let it proceed.

The first Boeing jet is scheduled to be delivered to Iran Air in April 2018.

But in a possible sign of things to come, an order Boeing secured in June from Iran Aseman Airlines for 30 B737 Max jets failed to get a license from OFAC.

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