US House Move to Bar Aircraft Deals Downplayed

EghtesadOnline: A lawmaker played down the importance of a recent US Congress measure to restrict the sale of western aircraft to Iran, saying it actually places limitations on the US, not Tehran.

News ID: ۷۷۱۷۵۰

28 November 2016

According to Reuters, the US House of Representatives passed a bill on Nov. 17 that would block the sale of commercial aircraft to Iran, a bid to stop sales by Boeing and Airbus that have already been approved by President Barack Obama's administration.

The bill passed the Republican-led house by 243-174 largely along party lines. All 174 "no" votes were from Democrats.

"We shouldn't be worried that a new restriction has been imposed on Iran," Morteza Safari Natanzi, a member of Majlis National Security and Foreign Policy told ICANA on Friday.

"The house has barred using the US financial system for the sale of aircraft," he said. "It is a limitation for US firms and has nothing to do with the licenses for the sale of aircraft to Iran [issued by the US Treasury Department] ... which are still in place."

The measure would prohibit the Treasury from issuing licenses that US banks would need to finance sales of commercial aircraft.

It was the latest in a series of efforts by congressional Republicans to counteract the July 2015 nuclear pact between Iran, the United States and other world powers.

Republican members of Congress, who unanimously oppose the nuclear agreement, claim that the passenger aircraft could be used for military purposes such as transporting fighters to battle US troops or allies in Syria.

Hopeless Measure

The measure is unlikely to become law during the current Congress. It would need to pass the Senate, where it would face stiff opposition from Democrats.

Outgoing President Barack Obama has announced he would veto the measure even if it did pass the senate, believing the legislation would be a violation of the nuclear pact, in which Iran agreed to curtail its nuclear program in exchange for sanctions relief.

The deals by Airbus and Boeing to sell or lease over 200 jets to Iran Air would help modernize and expand the country's elderly fleet.

Although Airbus is based in France, it must have the US Treasury's approval for the sale because at least 10% of the aircraft's components are American-made.

Treasury's Office of Foreign Assets Control on Monday issued a second license to France's Airbus for the sale of 106 planes to Iran Air.  Before the license was issued, Airbus had US permission for the sale of 17 jets to Iran.

Iranian officials have voiced growing concerns about delays in obtaining US licenses, or clarity over banking and financing rules, saying Washington's lack of full commitment to the deal has prevented them from reaping benefits expected under the deal, Financial Tribune reported.

The airplane deals still face major obstacles, including reluctance from major European banks to finance deals involving Iran, over fears of falling foul of vague US sanctions rules and incurring penalties by Washington.

The orders for some aircrafts have been canceled because of delays in receiving authorizations, and officials say Iran no longer plans to take delivery of A380 superjumbos.