Iran Says Plane Deals Were Challenged Under Trump

EghtesadOnline: Iran says the deals it signed with plane manufacturers after the lifting of nuclear sanctions hit unexpected hurdles due to the anti-Iran policy under US President Donald Trump.

News ID: ۷۷۹۱۷۲

16 September 2017

“After the delivery of the first plane [in January], we faced issues that we couldn’t predict—problems that could seriously affect the behavior of parts manufacturers, traders and service providers,” deputy minister of roads and urban development, Asghar Fakhrieh-Kashan, said.

“These issues were not in the picture before Trump took office.”

Iran Air secured contracts worth tens of billions of dollars with Boeing and Airbus before Trump took office in January last year. The orders were placed on the back of a nuclear agreement Iran, the US and five other world powers clinched in July 2015 to end a dispute over Iran’s nuclear program.

Both manufacturers were given the go-ahead by the US Treasury Department’s Office of Foreign Assets Control before the end of the tenure of the former US president, Barack Obama—for whom the nuclear deal was a landmark achievement, Financial Tribune reported.

Trump is seemingly willing to declare Iran in violation of the agreement based on faulty logic that is driven by twisted facts he has reportedly assigned a team to collect. That the US will pull out of the deal altogether will be for the US Congress to decide though.

The US stance comes against that of the International Atomic Energy Agency, which has stated on many occasions that Iran’s nuclear program has stayed within the limits set under the nuclear accord—known formally as the Joint Comprehensive Plan of Action.

The Boeing contract and the nuclear deal are somehow intertwined. Should Trump ignore Washington’s part in the international agreement, this will cast a shadow of doubt over the Boeing deal that was negotiated alongside JCPOA.

Plane talks, which made lengthy but steady progress under Obama, faced noticeable obstacles after Trump’s anti-JCPOA stance hurt confidence in many businesses willing to forge ties with Tehran.

An agreement signed with ATR in February 2016 took months before it was finalized, because the Canadian manufacturer of the ATR engines Pratt and Whitney was unwilling to accept after-sales services, forcing the company to do business directly with the Islamic Republic.

Iran has so far received seven new aircraft post-JCPOA, including four ATR and three Airbus jetliners. Despite backstop financing, which Fakhrieh-Kashan says is provided by the planemakers for 12 ATRs, 8 Boeings and 19 Airbuses, the rest of the orders have not been financed yet, due mostly to the risks associated with Trump’s hostile stance.

Apart from Iran Air, other deals Iranian airlines have signed with Boeing and Airbus, notably a $3 billion firm order placed in June by Iran Aseman Airlines for 30 jets of Boeing’s 737Max model with option for another 30, are still awaiting a go-ahead by OFAC. Not a single plane has won a permit ever since Obama left office.

Boeing, however, has repeatedly said with confidence that it will proceed with deliveries to Iran Air, focusing on the jobs the deals with Iran will create in the US.

According to Aseman, Boeing has said it will receive OFAC permits for the sales by the end of September this year.

The scheduled late-September deadline comes days before the end of a 90-day period in October when the US president is to let Congress know about Iran’s compliance with the nuclear deal.

End of months of uncertainty over Washington’s Iran policy could only be a few weeks away, but for those curious about the fate of the plane deals, time will not fly.