Iranian officials are threatening to take action in the event that a controversial jet deal between Boeing and Iran Air collapses. Their heated rhetoric comes amid congressional opposition to the sale and mounting speculation that the deal will become unworkable under the Trump administration, according to experts on and off Capitol Hill who spoke to THE WEEKLY STANDARD.
Boeing and Iran Air are rushing to cement a $16.6 billion dollar deal for 80 planes before Donald Trump takes office. Meanwhile, the escalating humanitarian crisis in Aleppo has generated renewed scrutiny of Iran’s role in supplying the Assad regime in Syria, with lawmakers in both parties anticipating action against those responsible after January. Iran Air was sanctioned by the Obama administration in 2011 for ferrying materials to Assad and other actors on behalf of Iran’s military.
Iranian officials have in recent days lashed out against the possibility that the incoming administration will hamper the Boeing deal. The country’s deputy transport minister said Sunday that Iran “will take back all the prepayments, with interest” should the president-elect disrupt the aircraft purchase, and later warned that imposing new sanctions would violate the nuclear deal, which allows for the jet sales.
Congressional officials suggested that the Trump administration is likely to dismiss such rhetoric amid ongoing atrocities in Syria.
“[Trump officials] are going to look at the flight records and say, as per the letter of the law, we are not going to allow an American company to sell airplanes to companies that use airplanes to supply terror,” a senior congressional aide who works closely on the issue told TWS.
“There are more ways to [unravel the sale] than there are ways to keep it,” the aide said. “I would be shocked if any actual Boeing planes ever touched down in Iran.”
Lawmakers say they have not received guarantees from the Obama administration that Iran Air has stopped engaging in illicit activities, despite the nuclear deal allowing sales to the airline.
Iran experts told TWS that the Trump administration would likely discover sanctionable pursuits in its review of the airline’s activities, which would stymie the sale.
“The Trump administration has almost an unlimited number of options to prevent Boeing and Airbus from operationalizing their Iran deals,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies (FDD). “One immediate step: a full administration review of the continued malign activities of Iran Air which is the counter party on these aircraft deals and continues to run flights from IRGC resupply bases in Iran to Assad’s Syria.”
The new administration could also revoke licenses necessary for the sale upon entering office, likely without violating the nuclear deal, according to sanctions experts.
“The administration could immediately suspend or prevent the further sale of Boeing aircraft to Iran Air on January 20th,” said Eric Lorber, senior associate at the Financial Integrity Network. “President Trump could come in on January 20th and say, ‘I don’t support this sale, I’m going to revoke the license,’ and all of a sudden, the contract becomes prohibited activity, and Boeing would have to exit it.”
Boeing said earlier this month that the first planes would be delivered to Tehran in 2018, though the order remains subject to “contingencies.”
Financing the deal has proved a stumbling block, as Western banks remain hesitant to do business with Iran due to the country’s support for terrorism and remaining sanctions there.
“Financial institutions are really reluctant to go back in and do any business with Iran, even if that business is legally permissible,” said Lorber.
The airline will most likely have to “cobble together” financing from various sources, he added. An Iranian official said Sunday that Iran Air is trying to raise around $120 million through Islamic bonds and $500 million from overseas, while Boeing will finance six of the planes. He later said that Iran has obtained financing through foreign leasing firms for 35 Boeing planes.
Iran has also finalized a deal with the European manufacturer Airbus for 100 planes. The first jetliners are scheduled for delivery within weeks.
