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House Spars Over U.S. Financing of Commercial Planes for Iran

Putting U.S. financing off-limits for Iran to buy or lease commercial Boeing aircraft was the first order of business for the House Rules Committee, on its first day back after a long recess and the presidential election of Donald Trump.

iran-air-boeingWASHINGTON (CN) – Putting U.S. financing off-limits for Iran to buy or lease commercial Boeing aircraft was the first order of business for the House Rules Committee, on its first day back after a long recess and the presidential election of Donald Trump.

The measure passed the committee 7-2 late Monday, but President Barack Obama has promised to veto the bill, saying it would undermine U.S. commitments to the Joint Comprehensive Plan of Action, or the Iran nuclear deal.

"The bill would undermine the ability of the United States to meet our JCPOA commitments by effectively prohibiting the United States from licensing the sale of commercial passenger aircraft to Iran for exclusively civil end uses, as we committed to do in the JCPOA, and seeking to deter companies from pursuing permissible business with Iran," an administration statement on the bill says.

"Our allies have steadfastly supported us when Iran has brought concerns to the Joint Commission, but they would be unable to do so if this legislation were enacted. We would lose the P5+1 unity on this issue that has been and will remain critical to preserving the deal," the statement continues.

U.S. financial institutions had received the go-ahead in September from the Treasury Department's Office of Foreign Assets Control to proceed with financial transactions that would permit the sale of up to 97 combined Airbus and Boeing aircraft to Iran Air, the country's national airline.

The Iran deal permits the export of commercial airliners for civilian uses, but some supporters of the bill, who are also critics of the Iran deal, say Iran could use the planes for military purposes.

Jeb Hensarling, a Texas Republican who chairs the Committee on Financial Services, reminded the committee that the Treasury Department sanctioned Iran Air in 2011 for using its planes to transport military-related equipment on behalf of the Islamic Revolutionary Guard Corps.

The Treasury Department removed the sanctions as part of the Iran nuclear deal, but Hensarling says Iran's behavior "remains unchanged." Iran Air has continued to use its aircraft to fly weapons and resupply routes to Syria, he said.

"Also last month, Iran conducted military drills using Boeing planes that have been a part of its air force fleet for many years,” he said. “This is not surprising as Boeing itself has posted that its commercial jetliners 'make an ideal platform for a variety of military derivative aircraft.'"

But others countered the claim that Iran would use the planes for military purposes.

"This specific transaction has been carefully reviewed by the Department of Treasury's Office of Foreign Assets Control to place conditions that minimize risk that the aircraft would be diverted from legitimate civilian aviation purposes," said Rep. Denny Heck.

A Washington Democrat, Heck noted that the financing hurdle could just prompt Iran to use a non-U.S. company like Airbus over Boeing. That could substantially increase the possibility that the planes would be converted for military use, he argued.

"Now just stop and apply common sense to what that means,” Heck said. “It means the added-on associated services - eyes on the plane that are associated with parts replacement and maintenance - will not be done by an American company.”

Heck also noted that the periodic reports of the International Atomic Energy Agency indicate Iran’s compliance with the deal.

"We should not do something that would violate our obligations and lead to the potential collapse of an agreement, which prevents Iran from obtaining nuclear weapons and enhances our own security," Heck added.

"If the degree collapses, Iran will be incentivized to develop nuclear weapons,” he continued. “We will be less safe.”

Heck noted in addition that the $17.6 billion sale could support more than 105,000 manufacturing jobs.

Though the president-elect has promised to “cancel” the Iran nuclear deal, Farideh Farhi, a professor of political science at the University of Hawaii, noted in an email Tuesday that predicting actions by the Trump administration will be difficult.

“There is no doubt that the Republicans in Congress, as well as most of the people mentioned as potential members of [Trump’s] foreign and security policy team, would like the U.S. to abandon the nuclear agreement,” Farhi said. “Their preferred way, however, is to provoke Iran into abandoning the multinational agreement in such a way that the blame does not fall on the United States. And this is hard to do.”

Farhi added that Trump “is the dark horse here” because he has both criticized the deal and lamented the missed opportunities for U.S. manufacturers.

“So rejection of a lucrative deal for a US manufacturing company may give him second thoughts,” Farhi said.

Farhi had noted in a September interview that Republican posturing on the Iran nuclear deal is part of an effort to sustain antagonism toward Iran, creating “political capital” to undermine the landmark deal under a new administration.

The bill prohibiting the sale of aircraft to Iran is an example of legislation that, if enacted under a new administration, could undermine the deal, Farhi had said. If the incoming president does not veto such legislation, it could become a reason for the Iranians to say the United States is not following through with its part of the deal, she added.

"Actually what these folks are hoping is to create an environment in which the United States does not pull out of the agreement, but the Iranians pull out of the agreement so the United States is not blamed for it," Farhi said.

Categories / Government, International, Politics

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