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Boeing inks US$3bn deal with Iran Aseman Airlines

Mena / 05-04-17 / by
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Boeing Iran

Boeing has signed a memorandum of agreement with Iran Aseman Airlines to sell 30 Boeing 737 MAX airplanes, a deal valued at US$3bn. It also gives the airline the option to buy a further 30 aircrafts.

Boeing says in a statement that the agreement was negotiated under authorisations from the US government, but that the company is yet to receive the final approval from the US Treasury’s Office of Foreign Assets Control (OFAC) to perform the transaction.

It is the first major deal a US company has signed in Iran since president Donald Trump’s administration imposed new sanctions against the country in early February in response to Tehran’s latest ballistic missile test. Michael Flynn, Trump’s national security advisor at the time, said the US is “officially putting Iran on notice”.

The new Boeing deal will test Trump, who has repeatedly threatened to scrap the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement, which was agreed with Iran in 2015 and implemented in January 2016.

Boeing notes in its statement that, according to the US department of commerce, an “aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the US”.

The announcement follows Boeing’s deal with Iran’s national airline IranAir in December to sell 80 airplanes at a total cost of US$16.6bn.

Boeing has not disclosed any details on how the deals will be financed.

The remaining US sanctions prevent any transactions from going through the US banking system. For fear of falling foul of these sanctions, international banks, whose support is crucial for large deals to take place, have refrained from dealing with Iranian business at all.

As reported by GTR in January, some international banks are looking seriously into re-establishing ties with Iran, but due to the high cost and effort of fulfilling compliance requirements, there is still a long way to go to a general opening to Iranian businesses.

“For many, if not most, of the major global investment banks, Iran remains off limits,” Matt Townsend, international sanctions and trade partner at Allen & Overy law firm, told GTR at the time. “Many of the banks have internal policies which prohibit any activity in connection with Iran, including lending money to borrowers who are active in Iran. It’s going to take a while for that position to soften.”

Deliveries of the 30 new airplanes is scheduled to start in 2022.

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