U.S. lawmakers expressed mounting concern Thursday over the proposed $17 billion-plus deal by Boeing to sell commercial jets to Iran — by far the largest deal inked by an American company since the signing of the landmark deal to curb Iran’s nuclear programs in exchange for the lifting of economic sanctions a year ago.
Congressional critics, including some Democrats, on a voice vote Thursday night in the House agreed to add two amendments for a financial services spending bill to undercut the Boeing deal — one effectively blocking the Office of Foreign Assets Control from issuing licenses for the deal and a second curbing the ability of U.S. banks to make any loans in support of the sale.
The House version still must be reconciled with what the Senate passed, and the Obama administration is expected to oppose the amendments targeting Boeing.
Critics at the House Financial Services subcommittee hearing earlier in the day warned there was no way to track how Tehran could use the Boeing jets while noting the Islamic Republic remains the world’s leading state sponsor of terrorism, according the U.S. government’s own assessment. There was also no way, they said, to ensure hard-line elements such as the Iranian Revolutionary Guard do not divert some of the Boeing fleet to their own use.
“I’m extremely concerned that by relaxing the rules, the Obama administration has allowed U.S. companies to be complicit in weaponizing the Iranian regime,” said subcommittee Chairman Bill Huizenga, Michigan Republican.
Earlier this year, Iran signed several landmark agreements with European companies in a sign of its return to international markets after having nuclear sanctions lifted. Although most direct bilateral trade is blocked by U.S. sanctions, commercial aircraft sales were given a special exemption in the deal signed last year, and Boeing announced a memorandum of understanding with Iran Air in June.
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Iranian officials have complained that the commercial payoff from the deal has yet to materialize, with many international companies are still worried they would be cut off from the American financial system. Rep. Dennis Heck, a Democrat from Washington state, where much of Boeing’s manufacturing base in centered, argued the deal was important to establish more normal trading ties with Tehran and that the final U.S. clearances should be issued.
“I believe that we’re interfering in a private-market transaction that is fully legal, fully compliant and scandal-free,” Mr. Heck said.
Years of sanctions, some dating back to the 1979 revolution, have left Iran with some of the oldest aircrafts in the world. However, because of Tehran’s dependence on aircraft equipment, the country is desperately seeking to re-establish business relations with U.S. aircraft manufacturers, especially Boeing.
The deal announced in June with Boeing would send 80 airliners to Tehran worth $17.6 billion and deliveries would begin in 2017 and continue through 2025. The Iranians also seek to lease 29 Boeing 737s, in addition to a number of planes being supplied by European rival Airbus Group.
House Financial Services Committee Chairman Jeb Hensarling, Texas Republican, expressed concern that the planes sold to Iran could be weaponized. Boeing executives, he noted, have even said in the past that the company is “well-postured to take commercial-military development to the next level.”
Mark Dubowitz, executive director of the Foundation for Defense of Democracies, testified at the hearing that extras safeguards should be placed on the Boeing deal, including placing Iran Air under a five-year rehabilitation period, after which — if Iran proves it has not militarized the planes — more aircrafts could then be moved into the country.
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“Boeing and those banking this deal face a due-diligence nightmare,” Mr. Dubowitz said.
Executives from Boeing were asked to attend the hearing but declined in a letter that said they “have made [Boeing’s] position clear.”