FPI Bulletin: Boeing Sale to Iran Would Fuel Terrorist Regime

June 1, 2016

Boeing’s prospective plan to sell commercial aircraft to Iran would strengthen the world’s leading state sponsor of terrorism at a time when it continues to challenge U.S. interests in the region. Historically, the Islamist regime has used civilian aircraft to ship arms to its terrorist proxies, including the Assad regime and the terrorist group Hezbollah. The Obama administration’s encouragement of such transactions may empower Tehran to accelerate its destabilizing behavior.

In April, Boeing and Tehran began preliminary talks for the purchase of planes that would replace Iran’s aging fleet, which dates to the rule of the shah. According to Iranian state media, Boeing offered the regime three new aircraft models: the 737, the 777, and the 787. Three months earlier, Iran signed a $27 billion contract with Airbus, Boeing’s chief rival, to purchase 118 planes, which the France-based company will begin delivering in 2019.

If Boeing and Iran finalize the sale, it could, as The Wall Street Journal put it, “become the biggest signal yet that the U.S. and Iran are moving toward normalized trade relations.” The Obama administration, for its part, has supported Boeing’s developing business ties with Tehran. According to John Bern, a Boeing spokesman, the meetings “were closely coordinated with the U.S. government.” “We have seen,” said State Department spokesman Mark Toner, “a number of major companies make plans to take advantage of new commercial opportunities afforded by the JCPOA, and we’re not going to stand in the way of these companies conducting what we view of permissible business under the JCPOA.”

From Iran’s perspective, the new aircraft would fulfill a vital need. Decades of U.S. and international sanctions since the 1979 Islamic Revolution had prevented sales of new planes, ultimately making Iran’s fleet one of the oldest in the world today. Iran, a country of 80 million people, currently possesses 250 planes, but only 150 remain operational due to malfunctions and a corresponding lack of spare parts. Upon the completion of the Airbus contract in January, Iranian officials indicated that they seek to buy as many as 400 more aircraft.

The July 2015 nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), explicitly permits such purchases. While the accord preserves most U.S. non-nuclear sanctions on Iran, the aviation sector constitutes a key exception: The United States, states the JCPOA, will “allow for the sale of commercial passenger aircraft and related parts and services to Iran” (Paragraph 22). According to senior administration officials, the concession stemmed from concern that the sanctions had left Iran with “one of the worst airline safety records in the world.”

During the height of the sanctions regime, however, the administration had justified penalties on Iran’s airlines by citing its record as a leading proliferator and terrorism supporter. In 2011, the United States sanctioned Iran Air, the country’s national airline, for providing “support and services” to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC). Iran Air, stated the Treasury Department, has “shipped military-related electronic parts and mechanical equipment on behalf of MODAFL,” which “has brokered a number of transactions involving materials and technologies with ballistic missile applications.”

In 2008, Treasury continued, “Iran Air shipped aircraft-related raw materials to a MODAFL-associated company, including titanium sheets, which have dual-use military applications and can be used in support of advanced weapons programs.” Likewise, “IRGC officers occasionally take control over Iran Air flights carrying special IRGC-related cargo,” and “commercial Iran Air flights have also been used to transport missile or rocket components to Syria.”

Since then, of course, Iranian support for Damascus has only increased due to Syria’s bloody civil war, while Tehran’s ballistic missile program has continued despite U.N. calls for its cessation in the aftermath of the JCPOA. By lifting sanctions on entities that fuel these developments, the nuclear deal enables them to continue with impunity.

Thus, leading members of Congress have expressed their opposition to Boeing’s prospective sale. On May 3, three Republican House members from Illinois, where Boeing maintains its international headquarters, sent a letter to Chairman and CEO Dennis Muilenburg calling for the cancellation of the sale. “We urge you not to be complicit in the likely conversion of Boeing aircraft to IRGC warplanes,” wrote Reps. Peter J. Roskam, Robert Dold, and Randy Hultgren.

Likewise, on May 19, three Republican House members from Washington, a leading base of Boeing operations, sent a letter to the leaders of Boeing and Airbus requesting a meeting to discuss the sales. An “extremely dangerous precedent is being set for Western companies,” wrote Reps. Dave Reichert, Cathy McMorris Rodgers, and Dan Newhouse. “We ask both of your companies to consider the profound moral implications of engaging a nation that has proven time and time again that it cannot be trusted.”

The impact of such a purchase would extend far beyond the United States. To date, numerous European banks and businesses have refrained from resuming business with Iran out of fear that Iran’s ongoing extremist behavior poses an acute investment risk. Their reticence has prompted the Obama administration, which fears that Tehran will seize any pretext to abandon the JCPOA, to launch a public campaign urging them to invest in the country. As such, if the Boeing transaction proceeds, it may spur further commercial relationships between Iran and major Western firms.

The White House has actively facilitated the Boeing sale despite its frequent pledges to combat Tehran’s support for terrorism — a policy that only encourages Iranian misbehavior. “Have no doubt,” said Secretary of State John Kerry last September. “The United States will oppose Iran’s destabilizing policies with every national security tool available.” If the White House is serious about this commitment, it should not encourage companies to supply Iran with advanced technology made in America.

Mission Statement

The Foreign Policy Initiative seeks to promote an active U.S. foreign policy committed to robust support for democratic allies, human rights, a strong American military equipped to meet the challenges of the 21st century, and strengthening America’s global economic competitiveness.
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