The Cable

House Republicans Aim To Take Down Boeing’s Deal With Iran

House Republicans line up a series of measures to block the agreement.

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Boeing, the massive U.S. airline manufacturer, wants to get back into Iran. House Republicans appear increasingly reluctant to allow that to happen.

On Thursday, the House Financial Services Subcommittee on Monetary Policy and Trade debated three bills aimed at stopping Boeing’s sale of passenger jets to Iran. Last month, the Chicago-based airline giant struck a deal to provide Tehran with new passenger planes in an effort to modernize Iran’s airline industry. This means, for the first time since the 1979 Islamic Revolution, new American planes could soon fly over the skies of a long-time foe.

The deal, worth up to $25 billion, marks the first major deal between a U.S. company and Iran since sanctions linked to Iran’s nuclear program were lifted seven months ago. It also lines Boeing up alongside Airbus, a major European competitor, which reached a $27 billion deal with Iran in January to sell Tehran 118 aircraft.

Opposition to the sale —  according to a memorandum of agreement between Iran Air and Boeing, 80 aircraft will be sold and a further 29 will be leased — is strong among Republicans. Rep. Bill Huizenga (R-Mich.), the subcommittee’s chairman, said at the hearing Thursday, “by relaxing the rules, the Obama administration has allowed U.S. companies to be complicit in weaponizing the Iranian regime,” in apparent reference to civilian airliners.

Opposition to the transaction wasn’t limited to Republicans, despite support for it from the Obama administration. Rep. Brad Sherman (D-Calif.) said that Iran Air still supports Iran’s Revolutionary Guard and gives aid to Syrian President Bashar al-Assad and Hezbollah. Under the terms of the nuclear agreement, Iran Air is allowed to do business with Western companies, but all transactions need to be approved by the U.S. Treasury Department. The U.S. Treasury has sanctioned Iran’s Mahan Air for links to terrorism. Iran Air was once sanctioned, but has been delisted.

“We should, at a minimum, not license the sale of aircraft knowing they’re going to go to an airline that’s likely to use them to support terrorism,” Sherman said. “There is no reason to believe that Iran Air is going to change its conduct.”

One of the bills considered Thursday would forbid the U.S. Treasury from licensing the Boeing deal; Treasury has to sign off on all business agreements with Iran. The second would ban Treasury Secretary Jack Lew from authorizing U.S. financial institutions from making transactions for the export of aircraft. The third would block the Export-Import Bank from financing entities that do business with Iran.

If the final of the three bills becomes law, it could put Boeing in a very tough spot. International banks have been wary of stepping into the regulatory minefield the Treasury Department has created around doing business in Tehran. There are sanctions still in place, like prohibitions on using dollars in trade with the country, that any potential creditor would have to deal with.

In a statement Thursday, the National Iranian American Council accused lawmakers of attempting to undermine the Iran nuclear deal.

“It is no secret that opponents of the Iran nuclear accord continue in their attempts to upend U.S. obligations under the agreement,” the group said. “By attempting to block Boeing’s pending sale of commercial passenger aircraft to Iran, opponents of the Iran nuclear accord are also seeking to undermine significant U.S. commercial interests and to impose humanitarian suffering on the Iranian people by denying them access to safe air travel.”  

Photo credit: DAVID RYDER/Getty Images

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

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