Boeing-IranAir Deal at Risk amid Claims of IRGC Use

U.S. President Donald Trump’s new Iran strategy will push a contract for 80 passenger jets signed between Boeing and IranAir into uncertainty, despite the confidence both companies have been trying to show, Al Monitor reports.

Trump has specifically referred to the $16 billion order by the Iranian flag carrier, saying he has not made up his mind about the future of the contract. Meanwhile, there have been reports going so far as to say that the U.S. administration is likely to nix the aircraft order. One report published by The Washington Free Beacon quotes “U.S. officials and those in Congress” as saying the deal is endangered amid concern that the jets will be used by the Islamic Revolutionary Guard Corps (IRGC), widely accused of promoting terrorism.

State-owned IranAir negotiated the massive order after Iran and six world powers concluded in 2015 an accord to impose restrictions on the Iranian nuclear program. Indeed, sales of aircraft to Iran is specifically part of the letter of the JCPOA. Now, the historic aircraft agreement is at risk of falling apart amid Trump’s refusal to certify Iran’s compliance with the JCPOA.

The U.S. Treasury then had its Office of Foreign Assets Control (OFAC) issue licenses to assure the sale would proceed. Based on U.S. law, aircraft manufacturers must obtain an OFAC permit if more than 10% of their components are of U.S. origin, meaning deals to purchase Airbus aircraft — which Iran has also ordered — need the green light from Washington, too.

IranAir claims its order is safe, even if the United States abandons the nuclear deal.

“If the U.S. 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 experts argue that since OFAC licenses could easily be revoked, nothing protects the order if the Trump administration decides not to allow it to proceed. In addition to the Boeing purchase, IranAir has ordered 100 passenger aircraft from European company Airbus and 20 turboprop regional planes from the Franco-Italian company ATR, with an option for 20 more.

In a statement issued October 13, Boeing said it will “continue to follow the U.S. government’s lead in all our dealings with approved Iranian airlines and will remain in close touch with U.S. regulators for any additional guidance.”

Since OFAC issued permits for the sale of passenger jets to IranAir last year, it has neither said or done anything further on the matter.