Economy, Domestic Economy

Obama Vows to Veto Bill Blocking Plane Sales to Iran

The White House says US partners would view the bill, if implemented, as a violation of the nuclear agreement.The White House says US partners would view the bill, if implemented, as a violation of the nuclear agreement.

US President Barack Obama’s administration said he would veto legislation seeking to block financial transactions related to the export of passenger aircraft to Iran, saying it would undermine the nuclear deal implemented early this year.

The legislation in the House of Representatives is the latest Republican-led effort to stop the sale of aircraft to Iran by Airbus and Boeing, allowed under the nuclear deal, Reuters reported.

The White House said US partners would view the bill, if implemented, as a violation of the nuclear agreement. The United States, along with Britain, Russia, France, China and Germany, agreed to lift sanctions against Iran in exchange for the country to limit the scope of its nuclear program.

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.

Some members of US Congress have raised concerns that killing the sale could cost jobs. But opponents argue that the passenger aircraft could be used for military purposes such as transporting fighters to battle US troops or allies in Syria.

The measure would bar the Secretary of the Treasury from authorizing a transaction by a US financial institution related to the export, or reexport, of commercial aircraft to Iran. And it would revoke any authorities enacted before the bill passed, such as those that allowed the Boeing and Airbus sales.

The measure also limits the role of Export-Import Bank financing of sales to Iran.

Some banks have been reluctant to finance the aircraft deals, fearing they could fall foul of remaining sanctions prohibiting the use of the US financial system for Iranian business.

However, earlier this month, it was reported that Iran had reached a deal with a foreign leasing company to finance the first 17 jets it plans to buy from Airbus. Iranian officials declined to name the lessor involved, but industry sources said in September that Iran was in advanced talks with Dubai Aerospace about helping to finance the purchase. Dubai Aerospace and Airbus both declined to comment.

Under the deal, the leasing company would take over part of Iran’s order for dozens of new jetliners and then lease them to the country’s flag carrier.

Airbus will unusually be paid in euros, avoiding dollars typically used by the aircraft industry. The US financial system remains closed to Iran under core sanctions dating back to the Islamic Republic’s 1979 revolution.

The House is expected to take up and pass the measure to block aircraft exports to Iran as soon as this week. It is not expected to get through the Senate, where it would need Democratic support to advance.

Lawmakers expect more efforts to stop the aircraft sale and the broader Iran deal, after Donald Trump becomes US president in January. Trump has been critical of the nuclear agreement, which is seen by Obama supporters as one of the Democratic president’s signature foreign policy achievements.

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