International Court Requires U.S. to Sell Aircraft Parts to Iran

The International Court of Justice (ICJ) has ruled that the United States must remove all sanctions that would prohibit the export of aircraft parts to Iran.  The ruling also directs the United States to “ensure that licences and necessary authorizations are granted and that payments and other transfers of funds are not subject to any restriction in so far as they relate to the goods and services.”

The Iranian Complaint in this matter was bought on or about July 16.

The Decision was issued on October 3.  It is a preliminary ruling in the case.  The court describes it as a “provisional measure[] responding to humanitarian needs [that] would not cause irreparable prejudice to any rights invoked by the United States.”  This is analogous to preliminary injunctions issued by U.S. courts (including a finding of irreparable harm, likelihood of success on the merits, and a weighing of the equities).

In response, the United States announced that it would withdraw from the Treaty of Amity that serves as the legal basis for the Iranian claim.  Article XXI of that agreement explicitly granted jurisdiction over US-Iranian disputes to the ICJ.

What effect will this ICJ ruling have?  In the United States, the Administration has already been critical of the decision, and has announced plans to withdraw from treaties that serve as the legal basis for elements of the court’s jurisdiction over the matter.  This is a strong signal that the US intends to ignore the ICJ ruling.  For US exporters, this is likely to mean that US law will continue to apply sanctions prohibiting export of aircraft parts to Iran.  But there is a stronger likelihood that the United States may stand alone in these sanctions, and other nations will continue to follow the Joint Comprehensive Plan of Action (JCPOA) that permitted nations to begin exporting certain aircraft parts to Iran.  US exporters will have to be especially vigilant about compliance in international transactions, to ensure that they are not inadvertently made parties to exports with a forbidden final destination.

For now, US exporters should continue to forbear from exporting aircraft parts to Iran unless the exporter has a valid export license covering the transaction, from the United States government.