Three More Days: Licenses to Sell Aircraft Parts to Iran are Extended Again

July 7, 2015 by Leave a comment

Since November 24, 2013, the United States operated under a Joint Plan Of Action (JPOA) with Iran that has permitted the export of commercial aircraft parts to Iran (when licensed by the US Treasury Department’s Office of Foreign Asset Control). That authority was set to run out on June 30, 2015, and was extended by a week through July 7.  No agreement has been reached so the authority has been extended for three more days, to July 10, 2015.

The parties to the Iran talks have decided to extend the JPOA for three more days in order to continue negotiations. This means that the existing authority is extended through July 10, 2015.

As always, please look carefully at your license language to ascertain whether it is extended with the JPOA extension. The Announcement from the Treasury Department states that:

Effective July 1, 2015, all specific licenses that:
(1) were issued pursuant to OFAC’s Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry, and
(2) have an expiration date of July 7, 2015, or earlier are hereby authorized to remain in effect according to their terms through July 10, 2015.

The last license extension was more specific, the or earlier language means that a broader range of licenses may be extended (including some that were not extended for the past week).  This is good news for those have licenses issued under the Second Amended Statement of Licensing Policy.

While this extension is better drafted, the fact that it is only three days long may make it practically impossible for distributors to take advantage of it, unless they have existing relationships that allow them to accept purchase orders, full fill them, and get paid by the end of the week.

One hopes that the next extension, if it happens, would be more commercially reasonable and would permit a longer period for the extension in order to permit U.S. industry to solicit orders and fulfill them.

 

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Iran Transactions Extended for Seven Days

June 30, 2015 by 1 Comment

Since November 24, 2013, the United States has operated under a Joint Plan Of Action (JPOA) with Iran that has permitted the export of commercial aircraft parts to Iran (when licensed by the US Treasury Department’s Office of Foreign Asset Control).  The latest extension of that authority was set to run out today,June 30, 2015.
The parties to the Iran talks have decided to extend the JPOA for seven days in order to continue negotiations to reach a comprehensive solution.  This means that the existing authority is extended through July 7, 2015.  Please note that this may not mean that your license is extended!  Look carefully at your license language to ascertain whether it is extended with the JPOA extension.  The Announcement from the Treasury Department states that:
Effective July 1, 2015, all specific licenses that:
(1) were issued pursuant to OFAC’s Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry, and
(2) have an expiration date of June 30, 2015, are hereby authorized to remain in effect according to their terms through July 7, 2015.

This means that if your license has an expiration date other than June 30, 2015, then it may not be extended by this announcement!

The news media has raised fears that the deal between the US and Iran may be less that ideal in terms of restraining Iran’s ability to produce nuclear weapons.  The news media has also suggested that Congress may not approve of the deal.  So, as always, don’t assume that the deal will be extended, and make sure that you can cnclude your business (including getting paid) by the current deadline!

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Yes, You Can Still (Get a License to) Sell Aircraft Parts to Iran

August 24, 2014 by Leave a comment

The program that permitted aircraft parts to be sold to Iran has been extended through November 24, 2014.  This program is based on an agreement among China, France, Germany, Russia, United Kingdom, United States and Iran known as the Joint Plan of Action (JPOA).

Sellers subject to U.S. law still need to obtain a license from the Treasury Department. The license will be considered to be a “transactional license.” You can apply for the license here: https://licensing.ofac.treas.gov/Apply/Introduction.aspx.

The Agreement between the United States and Iran provides that the U.S. would license (i) the supply and installation in Iran of spare parts for safety of flight for Iranian civil aviation and associated services and (ii) safety related inspections and repairs in Iran as well as associated services. Licenses applications will be reviewed on a case-by-case basis, though, and there is no guarantee that a license will be issued in any case.

OFAC policy suggests that applications should provide complete details of all transactions for which authorization is sought, including U.S. Department of Commerce Export Control Classification Numbers (ECCN) as well as evidence that the proposed transactions are for safety of flight.

This includes aircraft parts and some services but it does not include complete aircraft. The “goods” provision is limited to “spare parts for safety of flight for Iranian civil aviation.”

Unless an extension is negotiated, all licenses issued pursuant to this program will expire on November 24, 2014. Therefore distributors should plan on completing all activities related to the licenses by that date … including payment! OFAC has pledged that it will not impose any sanctions on banks that facilitate the fund transfers for these licensed transactions during the relevant period, but that promise appears to end after November 24, 2014.

Related Documents:

Joint Plan of Action (JPOA) between the P5 + 1 and the Islamic Republic of Iran: http://www.state.gov/p/nea/rls/220042.htm

Guidance on the Extended Program: http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_guidance_ext.pdf

Iran JPOA FAQs (see FAQ #10): http://www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa_faqs_ext.pdf

Amended Statement of Licensing Policy on Activities Related to the Safety Of Iran’s Civil Aviation Industry: http://www.treasury.gov/resource-center/sanctions/Programs/Documents/civil_aviation_slp_iran_ext.pdf

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