On September 21st, 2016, The Boeing Company, one of the world’s biggest aircraft manufacturers, received approval from The Office of Foreign Assets Control (OFAC), a branch of the US Department of Treasury, to export 17 passenger jets to Iran.
Lawrence Ward, a partner at the international law firm Dorsey & Whitney, which specializes in international business with a focus on U.S. national security law, international trade compliance law and licensing, has been following this months-long developing deal with Boeing closely.
Regarding the newly green-lit transaction Ward tells us: “OFAC’s approval of Boeing’s license application to sell 17 jets to Iran is historic. Earlier this year, the Obama Administration eased certain sanctions on Iran after the UN Security Council’s approval of the Joint Comprehensive Plan of Action. After the approval of the JCPA, OFAC issued a new ‘Statement of Licensing Policy’ under the Iranian sanctions program to declare that OFAC will accept specific license applications for the export, sale, lease, or transfer to Iran of commercial passenger aircraft and parts and components exclusively for civil aviation use and will review such applications on a case-by-case basis. OFAC’s approval of Boeing’s license undoubtedly will lead to enhanced air safety for the Iranian people and for the thousands of Americans who travel to Iran each year and currently must travel on an aging, and potentially dangerous, aircraft fleet.
“Perhaps of equal importance to many Boeing suppliers, OFAC’s approval of the Boeing license will open up a market that many of those suppliers would have never considered in the past. Boeing’s supply chain may benefit significantly with new market opportunities in Iran as a result. Importantly, however, those suppliers must understand that to supply into the Iranian market would mean that they must apply for and obtain their own licenses from OFAC before any sales or exports to Iran could take place. In most instances, it is taking OFAC 6 to 12 months to approve such licenses, which are effective for two years. And the licenses typically contain a host of conditions. Those suppliers will need to be prepared for related licensing and compliance challenges,” Ward says.