Iran Air: Boeing deal safe from US JCPOA pullout

Financial Tribune – Iran Air said the deal it has signed with the American planemaker Boeing won’t be affected, if the United Sates chooses to walk out of Iran’s nuclear deal—otherwise known as the Joint Comprehensive Plan of Action.

“OFAC [US Treasury Department’s Office of Foreign Assets Control] licenses for Iran Air’s [Boeing] planes have been issued. If the US pulls out of the JCPOA, this will not affect the OFAC licenses … This will not affect Boeing’s contract with us,” Iran Air CEO Farzaneh Sharafbafi told Financial Tribune in a short interview on Thursday.

The statement was made following a joint press conference with ATR executives after two planes manufactured by the French-Italian firm landed in Tehran’s Mehrabad Airport.

ATR had delivered four other aircraft to Iran Air in May, which was the first batch out of an order for 20 of the European company’s turboprop ATR 72-600 model.

Iran Air has also signed contracts with Boeing and Airbus to purchase a total of 180 planes. Airbus has delivered three aircraft, but the first Boeing delivery is scheduled for April 2018.

These orders were placed after Tehran and world powers signed a landmark deal in 2015 to resolve Iran’s disputed nuclear program. Most of the sanctions imposed on Iran’s economy were lifted in January 2016, when the nuclear pact was implemented.

The aviation deals were part of the nuclear bargain. Based on the JCPOA, the United States is required to “allow for the sale of commercial passenger aircraft and related parts and services to Iran”.

But the US President Donald Trump seems to have decided to open the way for Washington’s withdrawal from JCPOA. If he does not certify Iran’s compliance with the pact on October 15, then the Congress will have to decide in 60 days whether the US will stay committed to the deal.

Trump says it has made its decision, but he refuses to announce it. His administration is pressuring the International Atomic Energy Agency to demand tighter nuclear inspections on Iran’s nuclear program.

US Ambassador to the United Nations, Nikki Haley, said on Thursday that some countries were trying to protect Iran from more inspections by the IAEA, which is tasked with verifying Tehran’s compliance with the accord. “Without inspections, the Iran deal is an empty promise,” she said.

The US also demands renegotiation of the deal, which Iran says is out of the question.

Much as Boeing is confident about the order, as is Iran Air, it has hesitated to include the purchase in its official backlog. The US company says it sees itself committed to delivering the first plane on schedule, while emphasizing all the steps are taken in coordination with the US government.

Both Boeing and Airbus have received OFAC permits, even though sanctions experts say the licenses could be withdrawn depending on the administration’s decision.

This is while, in mid-September, the US House of Representatives proceeded with a motion to block the sale of commercial aircraft to Iran, despite warnings from some Democrats that it would undermine JCPOA.

Two amendments to a 2018 US government spending package was offered, which would specifically prohibit the use of funds to authorize financial transactions for the sales and prevent OFAC from clearing licenses to allow aircraft sales.

If the US prevents the sales, experts believe, it will face strong opposition by Europe. Nonetheless, the European Union has so far failed to persuade its largest banks to finance the multibillion-dollar deals. Trump’s vague Iran policy has apparently scared them.

Iran Air says it is in talks with financiers willing to work with Iran and it says Europeans are among them.

“We have seen the most enthusiasm in the Europeans,” Sharafbafi told us. “These are Europe-made products … so it is natural that Europeans are most eager to finance these planes.”