By Saeed Jalili, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
US President Donald Trump’s new Iran strategy, including his Oct. 13 refusal to certify that the Joint Comprehensive Plan of Action (JCPOA) meets congressional requirements, will push a contract for 80 passenger jets signed between Boeing and Iran Air into uncertainty, despite the confidence both companies have been trying to show.
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. “They were going to buy Boeings. I don’t know what’s going to happen with the deal,” he said in an interview Oct. 22, referring to Iran. Meanwhile, there have been reports going so far as to say that the US administration is likely to nix the aircraft order.
One report published Oct. 23 by The Washington Free Beacon quotes “US 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), which the United States accuses 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. In exchange, Iran was granted relief from sanctions that had kept its aviation industry isolated for decades.
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. Trump has given the US Congress two months to decide whether to reimpose sanctions lifted under the nuclear deal.
The order for 50 narrow-body Boeing 737 passenger jets and 30 wide-body 777 aircraft was secured in December last year. The US Treasury then had its Office of Foreign Assets Control (OFAC) issue licenses to assure the sale would proceed. Based on US law, aircraft manufacturers must obtain an OFAC permit if more than 10% of their components are of US origin, meaning deals to purchase Airbus aircraft — which Iran has also ordered — need the green light from Washington, too.