Boeing-Iran Agreement in Jeopardy over Sanctions Violations

U.S. media have been reporting that the United States might lean toward canceling the sale of Boeing and Airbus planes to Iran as it is involved in supporting terrorism and Assad regime in Syria and violating international sanctions, Al Arabiya reports.

According to the Wall Street Journal, Iranian airline Mahan avoided the U.S. sanctions and used Turkish companies to buy engines in transactions that could complicate Boeing’s Iran contract.

“Sanctions show that trade with Iran, which defies U.S. export laws and regulations, will not be tolerated,” U.S. Commerce Department Undersecretary Mira Ricardel said on February 5 in а press release from the Industry and Security Bureau of the Commerce Department.

Boeing signed a $16.6 billion deal with Iran in 2016 following the 2015 agreement, under which Tehran agreed to freeze its nuclear program in return for lifting international sanctions.

However, canceling the Boeing deal could affect the nuclear deal, as well as an estimated $40 billion in Airbus contracts in Europe, which depend on U.S. licensing in its agreement with Iran, according to the Wall Street Journal. The U.S. had eased sanctions on Iran airlines but continues to impose a ban on the Mahan lines because of its cooperation with the Revolutionary Guards.

An Iranian airline under sanctions by the U.S. for ferrying weapons and fighters into Syria repeatedly bought U.S.-made jet engines and parts through Turkish front companies over the past several years, most recently in December, federal investigators said in a new U.S. government filing.

The U.S. says in the filing that a Turkish woman set up a series of shell companies to buy needed equipment from U.S. suppliers for Iran’s Mahan Air, helping the airline circumvent the longstanding sanctions and fueling suspicions about Iran within the Trump administration.

The revelation could bolster a case by some within the Trump administration against granting Boeing Co. licenses to sell Iran scores of new planes, a multibillion-dollar deal inked after Tehran signed the landmark 2015 nuclear agreement. The filing documents purchases from September 2016 through December 2017.

The Trump administration is considering whether to grant the Boeing licenses to sell planes to another airline, Iran Air, as the White House takes a more aggressive stance on Iran and steps up sanctions. Administration officials are concerned the nuclear accord is inadequate and that Tehran’s growing influence is fueling war and militancy in the region. The U.S. has also accused Iran of violating international bans on ballistic missile development.

Iran has disputed evidence cited by the U.S. and the United Nations that it is violating weapon bans, and said U.S. efforts to change the nuclear deal and escalate sanctions against Tehran undermine the agreement and violate its terms.

Iran’s need for new aircraft and parts has fueled safety concerns, rekindled by Sunday’s crash of a turboprop plane in a mountainous region of the country. The operator, Aseman Airlines, which isn’t under sanctions, last year signed a purchase agreement for up to 60 Boeing 737 planes.