Published: Thu, May 10, 2018
Tech | By Anita Cain

US Treasury's Mnuchin - Revoking Boeing, Airbus licences to sell jets to Iran

US Treasury's Mnuchin - Revoking Boeing, Airbus licences to sell jets to Iran

While President Donald Trump's decision to pull the USA out of the Iran nuclear deal has been negatively criticized by most of the worldwide community it has brought good news for some.

Volkswagen announced in 2017 that it resumed selling cars in Iran for the first time in 2017.

Mnuchin, however, declined to spell out what the administration would consider as a "significant reduction" in purchases of Iranian oil.

It now leaves a gapping hole in the deal - a signature foreign policy achievement of the Obama administration - as Trump officials move toward reimposing economic sanctions. (BA) is facing a potential loss of $20 billion in sales agreements that it has with Iranian airlines.

Airbus has a $20bn order from Iranian airlines for almost 100 planes.

Federica Mogherini, the European Union foreign policy chief, said the bloc will remain "committed to the continued full and effective implementation of the nuclear deal" as long as Iran abides by its end of the bargain. All the deals are dependent on United States licences because of the heavy use of USA parts in commercial planes.

Even if the Iran sales had happened, Aboulafia said, they wouldn't have significantly changed that outlook.

DAE does not do business in Iran at the moment, he said.

"The Boeing and (Airbus) licenses will be revoked", Mnuchin told reporters at the Treasury.

Airbus and Boeing said they would study the USA decision, but declined to comment on the risks they faced.

Incidentally, that's one of the lesser complications which could emerge over the next 6 months as the full extent of new sanctions on Iran are rolled out.

Approximately 120 German companies operate in Iran with their own staff, and 10,000 German companies do business with Iran, according to the German-Iranian Chamber of Commerce.

"It's incomprehensible that the activities of German companies should still suffer" given the European Union commitment to the accord, said Erik Schweitzer, the head of the Association of German Chambers of Commerce and Industry, in a statement.

The company separately has a 30-airplane deal with Iran's Aseman Airlines, the Post reports.

Boeing agreed to sell 80 passenger jets to Iran Air for about $17 billion in 2016, but it never began building the planes or factored them in as future revenue.

Finally, addressing the underlying futility of the sanctions, the head of MENA research at MUFG Bank, Ehsan Khoman, said that China, India, Russia and Turkey will likely oppose US sanctions and keep current levels of Iranian crude purchases, even as the occasional USA allies - including Japan and South Korea - may comply with USA sanctions because of concerns they could lose US security umbrella against North Korea.

And Western energy companies had resumed weighing possible investments in Iran's large but antiquated fuel industries - even as the hope of improved trade pushed the price of oil so low that the economy of Iran, as in Russia, Venezuela, and other petroleum exporting countries whose policies are also at odds with the US, stalled from the decline in energy-sales income. "Together, we emphasize our continuing commitment to the JCPOA".

At the same time, European companies will likely respond to an ultimatum from Washington, political analysts said.

The European Union has in the past sought to shield companies from USA sanctions, but executives are reluctant to rely on such initiatives for fear of losing access to the world's biggest economy.

"The E.U. can take steps to mitigate the impact of the sanctions, but overall, companies will be scared".

They also represent a lost opportunity for Chicago-based Boeing and Toulouse, France-based Airbus.

Like this: