Exclusive: U.S. grants Airbus license to sell 106 planes to Iran

Reuters News
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Posted: Nov 22, 2016 11:22 AM

By Yeganeh Torbati

WASHINGTON (Reuters) - The United States has issued a license to France's Airbus <AIR.PA> for the sale of 106 commercial planes to Iran Air, Iran's flagship carrier, a source familiar with the matter said on Tuesday.

The move in the waning months of Democratic President Barack Obama's administration to further unlock jetliner sales to Iran is likely to raise the ire of Republicans in Congress and President-elect Donald Trump. Trump has said he would dismantle the 2015 international nuclear deal with Iran, which includes a measure allowing U.S. and European companies to sell Iran civilian aircraft.

Licenses allowing such sales could easily be withdrawn by the Trump administration if he chose to do so, sanctions experts said. He would likely face opposition from U.S. allies and other world powers who were partners in negotiating the deal to lift some sanctions in exchange for Tehran curbing its nuclear program.

The U.S. Treasury's Office of Foreign Assets Control issued the license on Monday, the source said on condition of anonymity. An Airbus spokesman confirmed that the company had received the OFAC license, but declined to confirm the exact number of planes approved.

Although Airbus is based in France, it must have U.S. approval to sell planes to Iran because at least 10 percent of the aircraft's components are American-made. Tehran provisionally ordered more than 100 jets each from Airbus and Boeing this year.

Before the license was issued on Monday, Airbus had U.S. permission for the sale of 17 jets to Iran.

Members of Trump's transition team did not immediately respond to a request for comment on the license.

Opponents of the nuclear deal argue that passenger aircraft could be used for military purposes, such as transporting fighters to battle U.S. troops or allies in Syria.

Last week, the U.S. House of Representatives passed a bill that would block the sale of commercial aircraft to Iran, which would also affect sales by U.S. firm Boeing <BA.N>.

The measure is unlikely to become law during the current Congress, as it would need to pass the Senate, where it would face stiff opposition from Democrats. The White House also said President Barack Obama would veto the measure even if it did pass the Senate.

On Tuesday, Speaker of the House Paul Ryan, Majority Leader Kevin McCarthy, and House Foreign Affairs Committee Chairman Ed Royce sent a letter to Obama asking him to refrain from trying to boost international investment in Iran or issuing new regulations, licenses or guidance on remaining sanctions in the last two months of his administration.

A congressional aide said the letter was not specifically tied to the Airbus license.

"President-elect Trump deserves the opportunity to assess United States policy toward Iran without your administration imposing or implementing additional measures that could complicate the incoming administration's ability to develop its policy," the letter said.

Republican members of Congress unanimously opposed the nuclear agreement, seen as one of Obama's hallmark foreign policy achievements.

The deals by Airbus and Boeing to sell or lease over 200 jets to Iran Air would help modernize and expand the country's elderly fleet, held together by smuggled or improvised parts after years of sanctions. Iranian officials have voiced growing concerns about what they see as unfair delays in obtaining U.S. licenses, or clarity over banking and financing rules.

Sanctions experts said Treasury licenses allowing such aircraft sales, and easing the way for other commerce with Iran, could easily be reversed by Trump if he chose to do so.

"The licenses can be withdrawn at any moment...so long as they're not required by legislation, which is a very small number," said David Mortlock, a former White House sanctions official.

Mortlock said such a decision would likely be seen by Iran and the world powers involved - France, Germany, Russia, Britain and China - as a violation of the deal.

The landmark airplane deals still face major obstacles, including reluctance from major European banks to finance deals involving Iran.

(Additional reporting by Patricia Zengerle and Emily Stephenson in Washington; editing by Grant McCool)