IRELAND Trends and Developments Contributed by: Maria McElhinney and Alice Boland, A&L Goodbody LLP
Office of Foreign Assets Control where there is a US nexus and potentially the US Bureau of Industry and Security where US export controls apply. Throughout 2023 multiple settlements completed suc - cessfully. However, a slowdown in the volume of these settlement transactions was seen in 2024. This slow - down appears to have been influenced by various fac - tors including: funding issues; additional designations under applicable freezing measures; and US sanc - tions on the Moscow Stock Exchange. Negotiations of these potential settlements remain ongoing and represent a key possible step for lessors to mitigate their losses in respect of aircraft previously leased to Russian airlines where they can be completed in a way that is compliant with applicable sanctions. Tariffs The introduction by the US of a new executive order establishing a “reciprocal” tariff policy in April 2025 has caused uncertainty within the aviation industry. This policy marks a significant shift, particularly for the aviation industry, as it ends long-standing exemp - tions for aircraft and related parts that had been in place under the Agreement on Trade in Civil Aircraft since 1980. The introduction of tariffs comes at a time when the aviation industry is already grappling with supply chain disruptions, engine reliability issues and rising labour and maintenance costs. Tariffs add another layer of complexity and cost, potentially exacerbating existing bottlenecks and delays in aircraft deliveries.
Tariffs will increase costs for US imported aircraft and parts, disrupt established supply chains and likely drive up prices and lease rates across the aviation sector. While some mitigating measures exist, the overall effect will be to raise the cost base for avia - tion lessors, airlines and manufacturers, potentially slow fleet renewal and introduce new operational and contractual risks. Although the tariff implementation remains fluid, the uncertainty caused by the possibility of further chang - es to tariff rates, scope and exemptions in response to international negotiations or retaliatory measures complicates long-term planning for all industry par - ticipants. Conclusion As we navigate 2025, the outlook for the aviation industry in Ireland is positive. The sector is expected to continue evolving and innovating, supported by strong leadership and a stable business environment. While supply chain constraints and macroeconomic and geopolitical uncertainties persist, the industry has demonstrated remarkable resilience and adaptability, positioning itself for continued growth and transfor - mation in the years ahead.
309 CHAMBERS.COM
Powered by FlippingBook