How Long Can Boeing’s Iran Deal Survive?

EghtesadOnline: The odds of Boeing selling planes to Iran appear to be lengthening by the day, CNN Money reported.

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03 April 2017

Relations between Iran and the US are going from bad to worse. Tehran slapped sanctions on 15 US companies on Sunday in retaliation for American sanctions announced last month.

“Imposition of new sanctions by the US is based on fabricated and illegitimate pretexts and amount to an action against international regulations,” Iran’s Foreign Ministry said in a statement.

Boeing signed an $8 billion deal to sell 80 jets to Iran Air after many sanctions were lifted as part of an international deal on the country’s nuclear program, according to Financial Tribune.

The planemaker is not on the list of Tehran’s targets, which includes Raytheon, Oshkosh and Bushmaster. None of them currently does any business with Iran.

“The sanctions from the Iranian side don’t really have any practical importance to them,” said Robin Mills, CEO of Qamar Energy and an expert on Middle East energy and investment. “These US defense companies obviously don’t have any assets or activities in Iran. It’s just trying to score political points.”

But the rising tension puts Boeing’s plans on an increasingly shaky footing.

“[The Boeing deal] is a key pressure point I think because that is of course one of the few areas where US trade with Iran has been specifically allowed,” said Mills.

US President Donald Trump has long been critical of the Iran nuclear deal that was signed under the Obama administration.

After assuming office, Trump said he was putting Iran “on notice” and his first move against the country was including its citizens in a travel ban.

Tehran then conducted a missile test that prompted a round of US sanctions targeting 25 individuals and companies connected to Iran’s ballistic missile program and Iran’s Islamic Revolutionary Guards Corps.

The next big test for Boeing’s deal is likely to come in June, when sanction waivers signed by President Obama will be due for renewal. It’s the first time Trump will have to sign them.

“The next round of waivers ... are absolutely crucial,” said Trita Parsi, president of the National Iranian American Council. “If the Trump administration doesn’t renew them, the United States will be in direct violation of the deal. If so, the deal will start collapsing and the United States will be blamed for its collapse.”

To complicate matters, a bill has been introduced in Congress to investigate whether Iran Air supports the Iranian Revolutionary Guards.

If Iran Air were found to have such links, it would be prevented from receiving new aircraft or US-made parts. That would effectively freeze the sale of jets from Boeing to Iran.

The first Boeing planes are scheduled to arrive in 2018.

Meanwhile, an Airbus A330 airliner arrived in Tehran on March 25, the third of 200 western-built passenger aircraft ordered by Iran Air following the lifting of sanctions on Iran last year.

The aircraft joins another A330 and a smaller A321 delivered to Iran earlier this year by Airbus.