With the election of Donald Trump to the nation’s highest office, political volatility in the United States has reached peak proportions in ways that threaten to undermine the nuclear accord between the U.S., other major world powers, and Iran (otherwise known as the JCPOA). Last week, the U.S. House of Representatives voted on a bill that would prohibit the Secretary of the Treasury from authorizing U.S. financial institutions from engagement in any transaction involving the export or re-export of aircraft to Iran. That bill passed – almost unanimously – and caused significant concern for Boeing and Airbus executives, as the two major aircraft manufacturers prepare to finalize deals with and export aircraft to the Islamic Republic.

Both companies have cause for concern, but they are focused on the wrong threat. While Congress could block the administration from issuing the licenses necessary to authorize the export or re-export of civil aircraft and aircraft parts (though the House bill is unlikely to do that, as no companion bill has been introduced in the Senate and the Senate appears satisfied to pass an Iran Sanctions Act extension alone), the real threat is that the incoming Trump administration staffs the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) with people that have a proven record of hostility to the JCPOA and its continued implementation and will thus be reluctant to issue the licenses required to facilitate the sale of passenger aircraft to Iran. That is not an unlikely scenario, either. In the months ahead, we may well find that Congress is but a bit player to the Executive branch’s efforts to undermine the U.S.’s JCPOA commitments.

As I have noted elsewhere, three key risks to the JCPOA present themselves: (1) the risk that new legislative sanctions are imposed on Iran or re-imposed on Iran in ways that would either directly undermine the U.S.’s sanctions-lifting obligations or effectively nullify the economic benefit of Iran’s nuclear bargain; (2) the risk that the Trump administration fails to take the proactive steps necessary to implement the nuclear accord, including, but not limited to, issuance of waivers and licenses, etc.; and (3) the risk that political volatility in the United States heightens the business risk so much for companies that would otherwise be interested in engaging the Iranian market that they pull back in efforts to enter Iran, thereby nullifying the economic benefit of the JCPOA for Iran.

Boeing and Airbus should be particularly concerned about the second of these risks. Pursuant to the JCPOA, the United States agreed to allow for the export or re-export of civil passenger aircraft and related parts to Iran. OFAC implemented that commitment by issuing a Statement of Licensing Policy under which aircraft manufacturers like Boeing and Airbus could apply for a specific license for the export or re-export of civil passenger aircraft to Iran. Such license applications would be viewed under a presumption in their favor. Already, OFAC has issued certain specific licenses for the limited sale of aircraft to Iran to both Boeing and Airbus, as the two manufacturers have noted. More specific licenses are expected in the months ahead.

Two things are of note, though: (1) the proposed sale to Iran of civil aircraft is much greater than what has been specifically licensed thus far, meaning that OFAC is expected to issue additional licenses to Boeing and Airbus allowing for the export of further aircraft; and (2) every specific license issued contains a provision noting that the license is revocable at will, signifying that OFAC can revoke the license authorization at any given time that it so wishes and re-institute the prohibition against the export of aircraft to Iran. In this manner, the Trump administration will have to take proactive measures to facilitate the sale of aircraft to Iran and could revoke the existing license authorizations if it so intends. In other words, Executive action poses a significant risk to the United States in fulfilling this specific commitment under the JCPOA.

While Boeing and Airbus executives have zeroed in on Congressional action – almost all of which has been generated in the House – they may want to pay a bit more attention to Trump’s Cabinet selections, as those at the State Department and Treasury Department will have policy say over licensing decisions. That, in my view, is the real worry lying ahead for the aircraft manufacturers.