61 Restrictive measures against Iran
| (31779)
—
—
| Council Decision concerning restrictive measures against Iran and repealing Common Position 2007/140/CFSP
|
| Legal base | Article 29 TEU; unanimity
|
| Department | Foreign and Commonwealth Office
|
| Basis of consideration | EM and Minister's letters of 9 July 2010 and 29 July 2010
|
| Previous Committee Report | None; but see (29812) — and (29813) —: HC 16-xxvii (2007-08), chapters 16 and 17 (16 July 2008) and (29912) 12463/08: HC16-xxx (2007-08) chapter 16 (8 October 2008)
|
| To be discussed in Council | 26 July 2010 Foreign Affairs Council
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared; further information requested
|
Background
61.1 On 23 December 2006, the UN Security Council adopted Resolution
1737, which imposed a number of sanctions on Iran. In broad terms
UNSCR 1737:
- prohibited the sale/transfer to Iran — and also the
export by Iran or export from Iran — of certain goods and
technologies that could contribute to sensitive activities (enrichment
related, reprocessing and heavy water activities and the development
of nuclear weapons delivery systems);
- prohibited technical or financial assistance
related to these activities;
- froze the assets of named individuals and entities
involved in, associated with or providing support to Iran's sensitive
nuclear and missile programmes;
- called on signatory States to "exercise
vigilance" about the travel to or through their territories
of individuals involved in, associated with or providing support
to Iran's sensitive nuclear and missile programmes and required
them to inform the Security Council when named individuals do
so; and
- called on States to prevent Iranian nationals
from studying sensitive subjects.
61.2 On 7 February 2007 the then Committee cleared
Common Position 2007/140/CFSP, which enabled EU Member States
to fulfil their obligation to implement these restrictions. It
was subsequently adopted by the Council on 27 February 2007.
61.3 In his Explanatory Memorandum of 10 July 2008,
the then Minister for Europe (Mr Jim Murphy) recalled the adoption
of UNSCR 1803 imposing further restrictive measures against Iran,
and explained that the measures were to be given effect in the
EU by the adoption of a Common Position amending Council Common
Position 2007/140/CFSP. The previous Government was "keen
to build on this by adding to the Common Position additional clarity
and detail on the UN's call for financial vigilance measures as
well as extensions of the list of prohibited items, restriction
of export credits and increased inspections and reporting requirements
on cargoes of certain Iranian carriers." The extension of
the restrictive measures was "important in the increasing
pressure being placed on Iran by the international community",
and represented "a significant further measure, building
upon the designation of further individuals and entities, including
Bank Melli, adopted on 23 June 2008." The UK remained committed
to a dual track strategy of sanctions and engagement, but Iran
had still not complied with four successive Security Council Resolutions;
it was important to continue to take steps to prevent the financing
and proliferation of Iran's nuclear and missile programmes. The
measures, particularly in the area of financial vigilance, in
the amended Common Position meant that European implementation
would be concrete and robust. The notification burdens on transactions
with Bank Saderat and increased vigilance over transactions with
Iranian linked banks were particularly significant; combined with
extension of the list of prohibited items, restriction of export
credits and increased inspections and reporting requirements on
cargoes on certain Iranian carriers, the amended Common Position
provided "a clear message to Iran."
61.4 The then Committee concluded that no questions
arose about the document, and that time would tell if the policy
of "sanctions + engagement" was effective, and accordingly
cleared the document.[258]
61.5 Then, in his further Explanatory Memorandum
of 2 October 2008, the then Minister for Europe said that the
complementary implementing Council Regulation further defined
the clarity and detail provided in the Common Position on the
UN's call for financial vigilance measures as well as extensions
of the list of prohibited items, restriction of export credits
and increased inspections and reporting requirements on cargoes
of Iranian carriers. He continued as follows:
"The UNSCR was not as strong as the UK would
have preferred but it usefully went beyond the more proliferation
focused measures in earlier resolutions by introducing restrictions
on export credits and the activities of Iranian banks. The extension
of restrictive measures is an important element in the increasing
pressure being placed on Iran by the international community.
"These represent a significant further measure,
building upon the designation of further individuals and entities,
including Bank Melli (a major Iranian bank listed for providing
or attempting to provide financial support for companies which
are involved in or procure goods for Iran's nuclear and missile
programmes), adopted on 23 June 2008."
61.6 The then Minister talked of a "refreshed
offer" by the E3+3 to Iran thus:
"On 19 July the E3+3 (the UK, France, Germany,
the US, Russia, China) presented a new offer of incentives to
Iran in return for the suspension of enrichment related activities.
The Iranians delivered a reply to Javier Solana, High Representative
for the Common Foreign Security Policy, on 5 August. They failed
to provide a clear response to the offer. E3+3 countries have
expressed disappointment that Iran failed to give a clear positive
response, reiterated their commitment to both engagement and sanctions
tracks and made Iran aware that the E3+3 are examining further
measures in the absence of a positive response."
61.7 The Minister then reaffirmed the previous government's
commitment to "a dual-track strategy of increasing sanctions
while offering genuine engagement" and continued as follows:
"Iran has still not complied with four successive
Security Council Resolutions. The IAEA (International Atomic Energy
Agency) issued a report on Iran on 15 September. The report highlighted
Iran's continuing failure to meet UNSCRs by continuing its enrichment
programme and installation of new cascades. This is the second
report in a row that has noted Iran's failure to answer the
IAEA's questions relating to studies with a possible military
dimension. Dr ElBaradei (IAEA Director General) reported that,
'The Agency, regrettably, has not been able to make any substantive
progress on the alleged studies and other associated key remaining
issues which remain of serious concern'. Dr ElBaradei noted his
'serious concerns' about these issues in May."
61.8 He went on to say that:
"The Government believes that it is important
to continue to take steps to prevent the financing and proliferation
of Iran's nuclear and missile programmes through increasing the
weight and effectiveness of sanctions. The UK has played a leading
role in pursuing restrictive measures at the EU as well as the
UN level. For example, the measures adopted in the Common Position
on 7 August provided a robust implementation of UNSCR 1803, going
beyond it in several areas. The UK fully supports this extension
of measures. The Government believes that notification burdens
on transactions with Bank Saderat and increased vigilance over
transactions with Iranian linked banks are particularly significant."
61.9 The then Minister went on to note that on 29
September the UN had adopted a new Security Council Resolution
against Iran:
"The Resolution sent a clear signal to Iran.
It demonstrated the continued resolve of the E3+3 to ensure that
Iran does not continue on the path towards a nuclear weapon. It
reaffirmed the strategy of engagement plus sanctions and drew
attention to Iran's defiance of IAEA inspectors. We will continue
to press for stronger UN measures."
61.10 Turning to the situation in Iran, the then
Minister said:
"Despite the rhetoric of the Government of Iran
there are early signs of an internal debate beginning in Iran
over the E3+3's recent offer of negotiations and incentives if
Iran suspends the enrichment of uranium.
"Media reports also indicate that investors
have become increasingly nervous over investing in Iranian enterprises,
blaming the political tensions surrounding Tehran's nuclear programme.
Stronger sanctions, particularly increasing vigilance over Iranian
financial institutions appear to be having an impact."
61.11 Summing up, the then Minister concluded:
"At present Iran is enriching uranium
for which it has no credible civilian need. The United Kingdom,
with our E3+3 partners, is pursuing a dual-track strategy to persuade
Iran to engage in negotiations to lead to an agreement on the
future of its nuclear programme that is acceptable to the international
community, the IAEA, and Iran. This involves engagement on one
hand, and pressure on the other. The E3+3 made a generous offer
in June 2006, refreshed in June 2008. This offers Iran all it
needs to pursue a modern nuclear industry, in a less proliferation-sensitive
manner, as well as a range of other benefits. Javier Solana, on
behalf of the E3+3, has met the Iranian Chief Nuclear Negotiator
(Sa'id Jalili) a number of times, but Iran has so far failed to
take up the offer. As for pressure, the UN Security Council has
passed three sanctions resolutions against Iran. The EU has implemented
each of these by going beyond the requirements of the UN text.
The US also has unilateral sanctions in place against Iran."
61.12 Given the high level of public concern about
Iran's nuclear activities, as well as clearing the Regulation,
the then Committee reported this exposition of the Government's
approach and assessment to the House (and, for the same reason,
also forwarded that chapter of its Report to the Foreign Affairs
Committee).[259]
The proposed Council Decision
61.13 In his Explanatory Memorandum of 9 July 2010,
the Minister for Europe (Mr David Lidington) says that on 9 June
2010, the UN Security Council adopted Resolution 1929 on Iran's
nuclear programme and its failure to comply with its international
obligations, which imposes a number of further restrictive measures
against Iran and which, he says, in broad terms:
— reaffirms
that Iran shall cooperate fully with the International Atomic
Energy Agency;
— stops
new Iranian nuclear facilities and bans Iranian nuclear investment
in third countries;
— imposes
total bans on exports of several major categories of arms, and
further restrictions on Iran's ballistic missile programme;
— freezes
the assets of 40 entities, including one bank subsidiary, several
Islamic Revolutionary Guard Corps companies, and three Islamic
Republic of Iran Shipping Lines subsidiaries, which have been
involved in multiple sanctions violations cases;
— freezes
the assets of and bans travel on one senior nuclear scientist;
— implements
a regime for inspecting suspected illicit cargoes and authorising
their seizure and disposal;
— places
restrictions on financial services, including insurance and reinsurance,
where there is suspicion of a proliferation link;
— bans
existing and new correspondent banking relationships where there
are proliferation concerns;
— establishes
a Panel of Experts to advise and assist on sanctions implementation;
and
— reaffirms
the dual track strategy (of pressure and diplomacy).
61.14 The Minister then explains that EU Heads of
Government welcomed the UN resolution in a Council Declaration
on 17 June 2010, which invited the EU Foreign Affairs Council
to adopt a Council Decision at its next session, on 26 July, to
implement the measures contained in UNSCR 1929, as well as additional
EU sanctions in the following areas:
— the
energy sector, including the prohibition of investment,
technical assistance and transfers of technologies, equipment
and service;
— the
financial sector, including additional asset freezes against
banks and restrictions on banking and insurance;
— trade,
including a broad ranging ban on dual use goods and trade insurance;
— the
Iranian transport sector in particular the Islamic Republic
of Iran Shipping Line (IRISL) and its subsidiaries and air cargo;
and
— new
visa bans and asset freezes, especially on the Islamic
Revolutionary Guard Corps (IRGC).
61.15 Consequently, the Minister says, the EU Council
Secretariat has produced a draft Council Decision that incorporates
all of these elements in addition to the latest UN measures.
61.16 With regard to the Fundamental Rights aspects
of the Decision, the Minister says that:
— the
procedures for designating individuals as subject to travel restrictions
and asset freezes are compliant with fundamental rights. Individuals
may only be listed where evidence suggests that they are engaged
in activities listed under Articles 18 (1) (b) and 19 (1) (b)
of the draft Decision. Member States may grant exemptions from
the travel ban and asset freeze for specified reasons including,
inter alia, where travel or payments are justified on the
grounds of humanitarian need by application to the UN Sanctions
Committee on Iran;
— the
draft Decision says that the Council will communicate their listing
to designated persons and entities, so as to give them an opportunity
to present observations. Where observations are submitted or where
substantial new evidence is presented, the Council will review
its decision in the light of those observations and inform the
person or entity concerned accordingly. In addition, the
travel ban and asset freezing measures will be reviewed at regular
intervals and at least every 12 months; and
— challenges
to a listing can be brought before the General Court. Challenges
to the application of a travel ban or asset freeze (e.g. grant
of exemptions) may be brought in the courts of the Member State
concerned.
The Government's view
61.17 In his Explanatory Memorandum of 9 July 2010,
the Minister says that the Government "is committed to tough
additional EU sanctions against Iran, aimed at halting its proliferation
sensitive activity and making it comply with its international
obligations", and continues as follows:
"The UN Security Council has sent a strong signal
that Iran's continued failure to comply with its international
obligations cannot be ignored. The Government believes that the
UN resolution is a clear response to continuing Iranian non-cooperation
with the international community over its nuclear programme, which
continues in contravention of previous UNSCRs and IAEA Board resolutions.
"It is clear that Iran has so far failed to
reassure the international community, or the IAEA, that its programme
is exclusively peaceful. The UK urges Iran to allow the IAEA the
access it seeks to enable it do so, including answering their
questions about the alleged military studies.
"The Government is deeply concerned by the revelations
last year about the construction of the covert enrichment facility
of Qom. And given that Iran continues to increase its stockpile
of Low Enriched Uranium — a critical step towards a nuclear
weapon — in defiance of six UNSCRs, and with no apparent
civil use, the Government, along with the rest of the international
community, remains critically concerned about Iranian intentions.
"The Government has said many times that we
do not question or challenge Iran's right to peaceful nuclear
energy. But with that right comes important responsibilities which
Iran has continually failed to accept. We continue to make clear
to Iran that the E3+3 remain willing to meet to pursue a diplomatic
resolution to the nuclear issue.
"The United Kingdom has been pressing hard for
tough action by the EU to accompany and reinforce the recent UN
resolution. The European Council Declaration on 17 June sent
a clear and strong signal of our unity and resolve.
"The Government welcomes the strong additional
restrictive measures that are included in the draft Council Decision,
which sends a strong message to the Iranian regime and the international
community of the EU's resolve to halt Iran's nuclear proliferation
sensitive activity and make it return to the negotiating table.
The measures under negotiation will have a tangible impact on
the Iranian regime's ability to finance nuclear proliferation
activity, through freezing the assets of additional banks, close
monitoring of all financial transactions with Iran and by cutting
revenue to the regime through sanctions against the energy sector.
The extended ban on dual use goods and the targeting of the transport
sector will make it more difficult for Iran to acquire the goods
and technology needed to advance its nuclear activity. The contribution
of key individuals and entities to proliferation sensitive activity
will be hit by additional asset freezes and travel bans, particularly
the Iranian Revolutionary Guard Corps (IRGC)."
The Minister's letter of 9 July 2010
61.18 In his accompanying letter of 9 July 2010,
in addition to reiterating the essence of his Explanatory Memorandum,
the Minister says that the Government is committed to ensuring
that the Committee has an opportunity to express its views on
texts, and thus hold the Government to account on EU decision
making, and has therefore submitted the Decision, despite it being
still a working document, so that the Committee has time to scrutinise
the proposal.
61.19 The Minister goes on to say that he will submit
the final Decision for scrutiny as soon as it has been agreed
by officials and, in advance of the adoption, will outline the
main differences from the draft text — which, he says, he
expects to be of detail rather than substance.
61.20 The Minister also explains in his Explanatory
Memorandum that, once the Decision is adopted, the EU will negotiate
an implementing Council Regulation, which will make these measures
binding upon Member States; which he expects to be adopted in
October 2010; and upon which he will submit for scrutiny when
a draft is received.
61.21 The Council Decision was adopted by the 26
July 2010 Foreign Affairs Council, together with a Regulation
extending the list of entities and individuals subject to an assets
freeze.[260]
The Minister's letter of 29 July 2010
61.22 The Minister for Europe's letter of 29 July
2010 is with regard to the updating of the existing Council Regulation:
"The update was necessary to allow Member States
to implement the asset freeze and travel ban against newly designated
individuals and entities contained in the Council Decision with
immediate effect. It was imperative that the Regulation update
was agreed along with the Council Decision on restrictive measures
against Iran to prevent asset flight. There would have been a
real threat if action had been delayed until adoption of a new
Regulation in the autumn and would have weakened the impact of
the new measures agreed. I regret that your Committee was not
able to scrutinise the update to the Regulation before it was
adopted. The final list of agreed names was only agreed and circulated
on 23 July. As a result, I had to agree to the adoption of the
Regulation amendment at the Foreign Affairs Council, before the
Committee has cleared it from scrutiny.
"This is not a decision I have taken lightly.
I am fully committed to the rigorous parliamentary oversight of
the Government's policy in the EU. However, given the exceptional
nature of this particular case, I believe that on balance was
in the national interest to proceed without clearance. The Government,
together with EU and international partners, has been clear that
it is imperative to adopt tough additional EU sanctions against
Iran in the shortest possible timeframe. The Government's approach
to Iran has enjoyed consistent cross Party support in the House.
"As you know, I have attempted to keep the Committees
fully informed on EU action against Iran. I submitted an Explanatory
Memorandum on the draft Decision and I wrote to you separately
on 9 July, where I raised the likelihood of further designations.
My officials also updated the Clerk of the Lords Committee on
21 July, inter alia, that the EU would need to update the existing
Regulation.
"Now that the Decision has been adopted, this
will need to be translated into a Council Regulation, which we
expect to be completed by the end of September. I will submit
the draft Regulation to be scrutinised by your Committee in due
course."
Conclusion
61.23 It is disappointing that, despite his protestations
regarding his commitment to rigorous scrutiny, the Minister has
now agreed to override scrutiny of the amendment to the implementing
Council Regulation without giving the Committee any prior warning.
At paragraph 4 of his Explanatory Memorandum the Minister said
that "once the Decision is adopted, the EU will negotiate
a Regulation. This will make these measures binding on upon Member
States. On current timing, we expect the Regulation to be adopted
in October 2010." And at paragraph 27 he said again "Once
the Decision is adopted EU member states will begin negotiation
of the Council Regulation". His follow-up letter of 9 July
similarly made no mention of an amendment to the implementing
Regulation being adopted at the same time as the Decision. So
it is only in his letter of 29 July, after the meeting of the
Council, that we are told that in fact an amended Regulation was
adopted at the same time as the Decision.
61.24 We ask the Minister to explain when the
Commission forwarded the proposed amendment to the Regulation
to the Council, and why the Government did not deposit it with
an Explanatory Memorandum, as is the procedure for EU documents
under our Standing Order.
61.25 We also ask the Minister to deposit the
amended Regulation with an Explanatory Memorandum. Given that
the Regulation is directly effective, the Explanatory Memorandum
should cover the fundamental rights implications of the travel
restrictions and asset freezes in the Regulation, in particular
in the light of the ECJ's decision in Yusuf and Kadi.[261]
61.26 If, as we understand, there is a second
implementing Regulation to be adopted, we look forward to its
early deposit with an accompanying Explanatory Memorandum.
61.27 In the meantime, we clear the Council Decision.
258 See headnote: (29812) - and (29813) -: HC 16-xxvii
(2007-08), chapters 16 and 17 (16 July 2008). Back
259
See headnote: (29912) 12463/08: HC16-xxx (2007-08) chapter 16
(8 October 2008). Back
260
The Iran conclusions are at pages 10 and 11 of the Conclusions
of the 26 July 2010 Foreign Affairs Council, available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/115976.pdf Back
261
Joined cases C-402/05 and C-415/05. Back
| 
