Iran: US Withdrawal from JCPOA Will Not Affect Previous Aircraft Sales Contracts

An Iranian official emphasized on Monday, January 8, that the US withdrawal from the JCPOA will not impact previous contracts for the sale of commercial aircraft to Tehran. The Trump administration in the United States must announce by the end of this week whether Iran has adhered to its commitments under the Joint Comprehensive Plan of Action (JCPOA) or not. Washington must also decide on the extension of the suspension of sanctions against Iran under this agreement. The sale of new commercial aircraft to Iran is one of the provisions included in the JCPOA, and Tehran has signed contracts worth tens of billions of dollars over the past two years with companies such as Boeing, Airbus, and Italy's ATR for these aircraft. Asghar Fakhrieh Kashan, Deputy Minister of Roads and Urban Development of Iran, told ILNA news agency regarding the fate of the aviation contracts in the event of the US withdrawal from the JCPOA that any new decision by the US government regarding these contracts 'will not have retroactive effect' and 'cannot affect the permits that have been issued.' However, he also stated that 'there is a possibility that the US withdrawal from the JCPOA could affect future OFAC permits for the sale of Boeing to Iran.' OFAC, or the Office of Foreign Assets Control, is the official authority for approving the sale of commercial aircraft to Iran. Not only must the American company Boeing obtain permission from this agency to sell aircraft to Iran, but Airbus and other companies that have up to 20% of their aircraft parts produced in the US must also obtain such permission. Iran Air has signed a contract to purchase 50 Boeing 737 MAX aircraft with Boeing, and according to Farhad Parvaresh, CEO of Iran Air, the delivery of this model will begin from 2021 onwards. The company has also purchased 30 Boeing 777 aircraft, 15 of which are from the 300ER family, with the first one scheduled to be delivered to Iran in May 2018. As Mr. Parvaresh stated last December, 'In 2018, six and in 2019, six Boeing 777 aircraft will be delivered to Iran. In 2020, three of these aircraft will also be delivered to Iran. Additionally, Iran Air has purchased 15 of the latest 777X model, which will be delivered to Iran starting in 2021.' Meanwhile, Asghar Fakhrieh Kashan told ILNA that final negotiations have recently been completed for Boeing to finance eight aircraft. He added that ATR has committed to finance 12 aircraft, and Airbus has also committed to finance three aircraft for Iran Air, with the arrival of three Airbus aircraft confirmed for next year. Boeing has stated that its contract with Iran will create jobs for 100,000 people in the US, both directly and indirectly, and over 13,000 parts suppliers in the United States will be involved in this contract. This statement from Boeing aligns with Donald Trump's slogans for job creation in America, and if he undermines Boeing's contract with Iran, it would effectively hinder job creation in the US. However, the US President has consistently stated that the JCPOA is 'the worst deal' he has ever seen. Meanwhile, the US House of Representatives has approved a plan to increase oversight of aircraft sales to Iran.