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E.O. 12958: DECL: 11/17/2016
TAGS: EAIR ETRD ETTC PARM PREL IT VE KTFN SP
SUBJECT: DEMARCHE ON IRAN AIR'S ATTEMPT TO ACQUIRE 30
CIVILIAN U.S. ORIGIN COMMERCIAL AIRCRAFT FROM IBERIA
AIRLINES

REF: A. STATE 186533
¶B. IIR 7 730 0002 07
¶C. MADRID 2908

Classified By: AMBASSADOR EDUARDO AGUIRRE FOR REASONS 1.4 (B), (C) & (D
)

¶1. (S/NF) As promised in Reftel A, FM Moratinos called the
Ambassador back to say that he had looked into the potential
Iberia-Iran Air deal and that it would not happen. The
Ambassador referred to the possible use of shell companies
and the Foreign Minister reiterated that the deal would not
happen by any means.

¶2. (S/NF) The Ambassador also raised the demarche during a
previously scheduled lunch with Vice President Fernandez de
la Vega on November 20. The Vice President said that FM
Moratinos had consulted with her before speaking with the
Ambassador and that the deal would not happen. The
Ambassador again probed delicately on the possibility of the
use of shell companies to shield the sale and she remained
firm. She acknowledged that Iberia did want to sell the
airplanes, but she again stated that any deal with Iran Air
would not happen.

¶3. (S/NF) The Ambassador is seeking a call on the Chairman
of Iberia on other (commercial) issues. He will use the
opportunity to raise the issue briefly, but it will not be
the centerpiece of the meeting.

¶4. (S/NF) Comment: Barring additional information from
Washington, we consider this issue closed. The Vice
President is the enforcer within the government and she and
the Ambassador have an excellent relationship. If she says
the deal is off, we believe the deal is off. Post thanks
Washington for the early notification. It was clear from the
Ambassador's first conversation that the Foreign Minister was
unaware of the potential deal. We do not know whether the
Vice President or anyone else in the government had been
aware that such a deal might be in the works, but we suspect
not at the senior level. Both the Foreign Minister and Vice
President immediately recognized the difficulties such a sale
by Iberia could represent.
AGUIRRE