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The recently announced Joint Comprehensive Plan of Action (“JCPOA”), negotiated between the U.S., the other permanent members of the UN Security Council (China, France, Russia and the UK), plus Germany, the High Representative of the European Union and Iran, will offer U.S. companies expanded opportunities to export aircraft items and services to Iran, but with restrictions.

Since January 2014, under the still-in-effect Joint Plan of Action (“JPOA”) and extensions of it, the Office of Foreign Assets Control (“OFAC”) has had a favorable licensing policy for spare parts to ensure the safe operation of Iranian commercial passenger aircraft and associated services and safety-related inspections and repairs. This licensing policy extends to U.S. companies (including U.S.-owned or -controlled foreign entities) and parties involved in the export of U.S.-origin goods. Under this licensing policy, a specific license application can be submitted to OFAC for consideration on a case-by-case basis.

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Under the JCPOA, the U.S. has agreed generally to issue licenses that will allow U.S. companies to: (i) export, re-export, sell, lease or transfer to Iran commercial passenger aircraft for an exclusively civil aviation end-use; (ii) export, re-export, sell, lease or transfer to Iran spare parts and components for commercial passenger aircraft; and (iii)
provide associated services, including warranty, maintenance and repair services, and safety-related inspections, provided the licensed items and services are used exclusively for commercial passenger aviation.

OFAC has authority to issue both specific and general licenses. A general license is essentially a "blanket" authorization to transact business under the terms and conditions set out in the general license. A specific license is issued for a particular transaction or series of transactions. The JCPOA does not indicate whether a general license will be issued with respect to these commercial passenger aircraft items and services. Therefore, unless and until a general license is issued, U.S. parties seeking new opportunities under the JCPOA will be required to apply for a specific license from OFAC.

Nonetheless, this development provides greater certainty that opportunities to supply commercial passenger aircraft items and services to Iran will exist into the future and U.S. companies will not have to await the announcement of an extension of temporary Iran sanctions relief, as was the case before the JCPOA.