4 The Joint Plan of Action |
Previous international engagement
with Iran on its nuclear programme
62. In 2003, as it became increasingly apparent that
Iran had not consistently given accurate information about its
nuclear activities, the IAEA sought a commitment to greater transparency
by Iran, and international pressure grew for the IAEA to declare
Iran non-compliant with the Safeguards Agreement. In 2006, it
duly reported Iran to the UN Security Council, and resolutions
imposing sanctions duly followed. From 2006, the UK, France and
Germany were complemented by the US, Russia and China (forming
the "E3+3" otherwise known as the "P5+1")
in negotiations to contain Iran's nuclear activities. Latterly,
the negotiating approach adopted by the P5+1 could be summarised
as one with red lines of "stop, shut, ship":
production of 20% enriched uranium;
· Shut the Fordow
facility (the subterranean enrichment facility, whose existence
was not made public until 2009);
· Ship out the
current stocks of 20% enriched uranium to a third country.
The tortuous history of negotiations between the
two sides is set out in some detail in the FCO's memorandum to
our predecessors' inquiry into Iran in 2007-08.
Throughout, Iran has had a record of playing for time, "concealment
and "playing games" during negotiations.
THE SANCTIONS REGIME
63. The second limb of policy towards Iran, alongside
negotiation, has been the imposition of sanctions: these have
accumulated steadily over the years are now multi-layered. They
include sanctions authorised under UN Security Council resolutions,
sanctions imposed unilaterally by the US, and sanctions agreed
by the European Union. Not all sanctions relate to Iran's nuclear
programme: some are imposed for human rights violations.
The main elements of the sanctions regime relating to the nuclear
programme in force on 31 December 2013 are set out below.
Box 2: Sanctions related to Iran's nuclear programme
Four of the six UN Security Council Resolutions relating to Iran's nuclear programme imposed new sanctions:
· Resolution 1737 (23 December 2006) required states to prevent the supply, sale, or transfer of designated nuclear and ballistic missile-related goods to Iran; barred states from providing relevant technical or financial assistance, training or resources; and instructed states to freeze assets of designated individuals.
· Resolution 1747 (24 March 2007) extended this assets freeze and called upon states to "exercise vigilance and restraint" in the supply, sale, or transfer of major military weapons systems and related material imposed an arms embargo
· Resolution 1803 (3 March 2008) extended the asset freezes and called upon states to inspect Iranian ships and aircraft, and to prevent named individuals involved with the nuclear programme from entering or transiting their territory.
Resolution 1929 (9 June 2010) established a full embargo on sales of arms to Iran, instructed states to inspect vessels suspected of carrying prohibited Iranian cargo, and imposed an asset freeze on named companies or entities believed to be linked to the financing of proliferation activities.
European Union sanctions
A series of Council decisions gave effect to UN Security Council resolutions imposing sanctions on Iran. Further measures included:
· Council Regulation (EU) 961/2010 (27 October 2010), which imposed additional restrictions on trade in dual-use goods and technology, and equipment which might be used for internal repression; restricted transfers of funds to and from Iran; and restricted Iran's access to the insurance and bonds markets of the Union
· Council Decision 2012/35/CFSP (23 January 2012), which prohibited the purchase, import or transport from Iran of crude oil and petroleum and petrochemical products; prohibited any related financing or financial assistance; prohibited the sale, supply or transfer of key equipment and technology for the petrochemical industry; and prohibited the sale, purchase, transportation or brokering of gold, precious metals and diamonds, to from or for the Government of Iran
Council Decision 2012/152/CFSP (15 March 2012), which prohibited the supply of specialized financial messaging services (such as SWIFT), used to exchange financial data, to Iranian persons and entities, including Iranian banks and other institutions engaged in support for Iran's nuclear activities.
The current regime of US sanctions is based upon a succession of Presidential Executive Orders and legislative measures, including:
· Executive Order 12170 (President Carter, November 1979), which "blocked" Iranian government property and interests where subject to US jurisdiction
· Executive Order 12613 (President Reagan, October 1987), which prohibited import of goods or services of Iranian origin into the US
· The Iran and Libya Sanctions Act (1996), which imposed sanctions on foreign companies investing more than $20 million in one year in Iran's energy sector
· The Comprehensive Iran Sanctions, Accountability, and Divestment Act (2010), which imposed sanctions on persons providing goods, services (including insurance or financing), resources or support to Iran that would allow it to maintain or expand its domestic production of refined petroleum resources.
SANCTIONS: THE IMPACT ON IRAN
64. Much of the current economic woe in Iran is due to international
sanctions, although mismanagement and lack of investment have
also played a large part.
The embargo on oil sales has had far-reaching effects, as has
the withdrawal of SWIFT, the international system for transferring
funds. Professor Ehteshami told us that this had made cross-border
transactions "nearly impossible" and had encouraged
barter, which was less cost-effective and efficient.
Iran's Oil Minister was reported last year as having said that
the fall in oil exports caused by sanctions was costing Iran between
$4 billion and $8 billion per month.
According to one estimate, oil revenue lost to Iran amounted to
$95 billion in 2011 and $26 billion in 2012.
Sanctions may also have hindered Iran's attempts to source ingredients
for the solid fuel for its Sajjil missile.
65. Many of those who contributed to our inquiry
believed that sanctions had played some part in triggering Iran's
more positive approach to negotiation on its nuclear programme,
which had led to the adoption of the Joint Plan of Action.
It was said that sanctions had been "vital in bringing the
Iranian government back to the negotiating table"
and that the economic pain which they had inflicted had forced
Iran to make concessions.
Others, while not denying that sanctions had damaged the Iranian
economy, saw more
of an indirect link to the newfound desire for more meaningful
negotiations. They suggested that sanctions had led to an economic
situation which had generated an appetite amongst the Iranian
public for a rapprochement which would give them "a different
direction for influence on the world";
and that in turn had played a large part in the election of President
Rouhani, who had portrayed himself during the election campaign
as "the man who could make a deal with the West".
The Joint Plan of Action
66. Following the election of President Rouhani in
June 2013 and the appointment of Javad Zarif as Foreign Minister,
foreign ministers from the P5+1 met Mr Zarif in the margins at
the UN General Assembly meeting in New York in September, where
he presented a new proposal which Secretary of State Kerry described
as "very different in the vision" of possibilities for
the future. Further
meetings in Geneva in October and November led to the agreement
of what is known as the Joint Plan of Action, on 24 November 2013.
67. The Joint Plan of Action envisages a two-step
solution: the first step would last six months (renewable by mutual
consent), in which the two sides would make specified concessions.
It was agreed on 10 January 2014 that this six month period would
start on 20 January. The second step, which would be implemented
within one year of the adoption of the Joint Plan of Action, would
be a "comprehensive solution", but this is defined only
in terms of objectives: how they would be achieved was not spelt
out. A series of negotiations on the second step began on 18 February
2014. The essence of the Joint Plan is set out below.
Box 3: Main features of the Joint Plan of Action
Preamble and general principles
Overall goal is a solution which would ensure that Iran's nuclear programme will be exclusively peaceful
"Under no circumstances will Iran ever seek or develop any nuclear weapons"
"Nothing is agreed until everything is agreed"
A Joint Commission from both sides would monitor implementation of the first-step measures and would work with the IAEA "to facilitate resolution of past and present issues of concern"
First step measures, to last six months
Iran to split existing stock of 20%-enriched uranium: half to be working stock of 20%-enriched uranium in oxide form for fabrication of fuel for the Tehran Research Reactor; the other half to be diluted to no more than 5%-enriched, with no reconversion line.
Iran to suspend enrichment of uranium above 5%
Iran to make no "further advances" in activities at Natanz, Fordow or Arak
Iran to convert to oxide newly 5%-enriched uranium during the six-month period
Iran to install no more centrifuges, other than "like-for-like" replacement of damaged centrifuges
No reprocessing by Iran, or construction of facilities capable of reprocessing
Arak reactor not to be commissioned; no fuel or heavy water to be transferred to the site; no more fuel to be produced or tested; no remaining components at Arak to be installed
Iran to be permitted to continue research and development, including on enrichment
Enhanced monitoring by the IAEA, including daily access for IAEA inspectors to surveillance records at Fordow and Natanz
E3/EU+3 to pause efforts to further reduce Iran's crude oil sales: current customers to be able to continue to purchase current average amounts; EU and US sanctions on associated insurance and transportation services to be suspended
US and EU sanctions on petrochemical services, gold and precious metals, cars and associated services (insurance, transport or financial) to be suspended
No new nuclear-related UN Security Council or EU sanctions; US Administration to refrain from imposing new nuclear-related sanctions
Financial channel to be established to permit trade in humanitarian goods (food, agricultural products, medicine and medical devices), using Iranian oil revenues held abroad
Final step measures
All UNSC, multilateral and national nuclear-related sanctions to be lifted
Rights and obligations of parties to Non-Proliferation Treaty and IAEA Safeguards Agreements to be reflected
Will involve a mutually defined enrichment programme, with mutually agreed parameters consistent with practical needs, with agreed limits on scope and level of enrichment activities, capacity and stocks of enriched uranium
Concerns about Arak reactor to be fully resolved
Transparency measures and enhanced monitoring to be fully implemented
REACTION TO THE JOINT PLAN OF ACTION
68. Agreement of the Joint Plan of Action generated
a widespread sense of optimism that a resolution of the crisis
in relationships with Iran might at last be within sight, and
that Iran now had representatives who could be trusted and with
whom the P5+1 and others could do business. World leaders variously
described the outcome as "a victory for all"
and as something which offered "a real opportunity to achieve
a comprehensive, peaceful settlement".
The Foreign Secretary described the Plan as "a thorough and
detailed first-stage agreement that is a significant step towards
enhancing the security of the Middle East and preventing nuclear
The main dissenting voice was that of the Israeli Prime Minister:
Mr Netanyahu described the agreement as "a historic mistake".
69. Most witnesses to our inquiry voiced strong support
for the Joint Plan of Action and saw it as a good deal
or at least good in parts.
It was described to us as "an impressive agreement
full of really concrete stuff",
and as "a good deal because Iran's capabilities in every
part of the nuclear programme of concern are capped, with strong
However, Mr Kessler, representing the Henry Jackson Society, told
us that it was "more of a bad deal than a good one",
for reasons which we discuss below.
70. There was less optimism, when we took evidence
early in 2014, about the chances of success in negotiating the
second-stage "comprehensive" agreement. It was widely
accepted that this would be "challenging",
even "formidably difficult".
Some gave a bleak forecast. The Henry Jackson Society stated that
the Joint Plan of Action was "unlikely to lead to a comprehensive
deal" and that the P5+1 should prepare for the "day
after" its likely failure.
while positive about the agreement, reckoned that there was just
a 10% chance of success of a comprehensive deal being reached
during the first six months of interim measures as the two sides
were too far apart: he believed that it would be too difficult
politically for Iran to accept the limits that would be required
and for Washington to give Iran what it wanted in terms of lifting
Evaluating the Joint Plan of
71. Essentially, the Joint Plan of Action is a balanced
set of concessions by the two sides: Iran has undertaken to suspend
elements of its nuclear programme and to reduce its stocks of
enriched uranium, in exchange for an acceptance by other parties
that Iran may enrich uranium in the long term, and a limited relaxation
of the sanctions regime imposed on Iran. Although the oil embargo
remains, as does the withdrawal of facilities via SWIFT
for international financial transfers, any efforts by the P5+1
to strengthen sanctions against oil sales are "paused",
and some of the substantial Iranian oil revenues held abroad may
be used for trade in humanitarian goods.
The principles expressed in the Preamble to the Planthat
the overall goal is a solution which would ensure that Iran's
nuclear programme will be exclusively peaceful, and that under
no circumstances would Iran ever seek or develop any nuclear weaponsare
ones which indicate a welcome intention.
STRENGTHS OF THE JOINT PLAN OF ACTION
72. The strengths of the Plan may be summarised as
the installation or operation of extra centrifuges, combined with
the temporary halt to production of 20%-enriched uranium and the
dilution of half of existing stocks of 20%-enriched uranium, reduces
scope for speedy enrichment. Mr Fitzpatrick believed that the
"breakout time" required in order to produce enough
material for a nuclear weapon had doubled, when in the absence
of an agreement it might have halved.
Opinion varied on what a reasonable period for minimum "breakout"
time might be: Peter Jenkins suggested six weeks,
but Oren Kessler, representing the Henry Jackson Society, said
that "about a year" would be a reasonable objective
· It allows
greater transparency on Iran's nuclear activities, through daily
access for IAEA inspectors to surveillance records at the Natanz
and Fordow facilities; and access to centrifuge assembly workshops,
rotor production workshops and storage facilities, and to uranium
mills and mines.
POTENTIAL WEAKNESSES OF THE JOINT
PLAN OF ACTION
73. The potential weaknesses of the Plan include:
acknowledgement, as part of the comprehensive agreement, that
Iran may have a mutually defined enrichment programme. This is
something which was in the past a 'red line' for US and which
is still opposed in principle by Israel, and which undercuts UN
Security Council resolutions calling on Iran to cease enrichment
activities. We are aware of concerns that to give a signal to
Iran that it may enrich uranium would start a nuclear arms race
in the region.
However, the Nuclear Non-Proliferation Treaty does not explicitly
bar or restrict the right of parties to the Treaty to enrich uranium:
it recognises the right of all parties "to develop research,
production and use of nuclear energy for peaceful purposes"
in conformity with non-proliferation obligations under Articles
I and II. Mr Kessler,
representing the Henry Jackson Society, did not favour recognition
of a right for Iran to enrich uranium, but he acknowledged that
it was now unrealistic to argue for complete cessation.
of the reactor at Arak may continue. There is nonetheless an undertaking
to submit updated design details to the IAEA and to conclude a
Safeguards Approach for inspection. The Henry Jackson Society
pointed out that the undertaking not to commission the reactor
was meaningless while it was not ready for operation,
but this reservation has less force if the interim measures are
rolled over for further periods of six months and construction
nears the point at which the reactor might be commissioned.
may continue its research and development activities, and these
may encompass research into more advanced centrifuges which could
be capable of significantly faster enrichment.
The Iranian Atomic Energy Organisation announced in December 2013
that it had completed initial tests on a new generation of centrifuges.
the conversion of 5%-enriched uranium to oxide is designed as
a confidence-building measure, reconversion from oxide to uranium
hexafluoridethe form in which it may be enrichedis
not particularly difficult or time-consuming and could conceivably
be done covertly.
The removal of oxide for reconversion would, however, be difficult
to conceal from IAEA inspectors.
is no mention of the military facility at Parchin, where Iran
is thought to have staged tests for a nuclear weapons detonation
system and where the site is reported to have been sanitised,
paved over and reconstructed in an attempt to conceal the nature
of previous activities there.
Requests by the IAEA for access have been denied. The Foreign
Secretary has accepted that Parchin "remains a point of difference"
which "must be addressed as part of a comprehensive and final
It is hoped that a Joint Statement on a Framework for Co-operation
between Iran and the IAEA might allow the Agency access to the
· No detail
is evident on how historical concerns about breaches of the Safeguards
Agreement might be resolved. A "Joint Commission" would
work with the IAEA "to facilitate resolution of past and
present issues of concern", but there is the possibility
that past misdemeanours might simply be excused in the interests
of a settlement for the future.
Plan is based upon declared facilities and could be seen as a
cover for progress towards development of a nuclear weapon at
hitherto undeclared sites.
74. The main objection voiced by those who are sceptical
of the value of the Joint Plan is, however, the sanctions relief,
officially estimated to be worth about $7 billion to Iran over
six months. Some
expressed grave reservations about what they saw as too speedy
a relaxation of sanctions:
the Henry Jackson Society and BICOM both believed that it had
given Iran breathing space and a psychological boost, as well
as "a tremendous boon to the economy",
and that a good deal of leverage had been lost.
Many in the US Congress argue that sanctions should, if anything,
be strengthened rather than relaxed,
and the Henry Jackson Society argued that if the Joint Plan of
Action did not lead to a comprehensive deal, sanctions should
be expanded in order "to force Iran to agree to terms considerably
more limiting than those outlined in the interim agreement".
We note that Iranian assets worth between $60 and $100 billion
worldwide remain frozen.
75. Others have voiced doubts about the value of
strengthening sanctions in Iran. Mr Fitzpatrick has said that:
Those who call for more sanctions in the mistaken
belief that adding more pressure will induce Iran to 'cry uncle'
and give up uranium enrichment do not understand Iran well at
all. Political and social dynamics make such capitulation impossible
... Proud countries do not succumb to pressure by giving up the
technology that has become a symbol of national sovereignty.
He added that Iran was "far from being brought
to its knees" and that it had "too diverse an economy
and too many trading partners for sanctions to effect a stranglehold".
He argued that sanctions were "already nearing their limit,
as China refuses to further cut back oil purchases and EU sanctions
are increasingly losing court challenges"; and he concluded
that "if the P5+1 had not agreed to a deal in Geneva ...
the international tide of opinion would have turned against sanctions".
76. Peter Jenkins, a former UK Permanent Representative
at the IAEA, also challenged the assumption that Iran was susceptible
to coercion through sanctions, and he gave examples of occasions
on which he believed that Iran had chosen to act in the way it
did not because of the fear of sanctions but for other reasons,
such as limiting damage to its reputation.
77. It was also put to us that some elements within
Iran welcome sanctions, partly for their propaganda value in vindicating
the view of Iranian hardliners that the West is seeking to impede
Iran's scientific progress,
and partly to relish the spirit of isolation which was a feature
of Iran after the 1979 Revolution.
It is also claimed that parts of the Iranian Revolutionary Guard
Corps benefit from black market profits from trade which evades
The merits of negotiation and
78. Despite the various imperfections and gaps in
the detail of the Joint Plan of Action, no-one suggested to us
that the P5+1 should not have sought to negotiate a deal. The
main alternative is the neutralisation or disruption of Iranian
nuclear facilities and capability. Various covert attempts have
already been made in this vein: it has been alleged that the US
and/or Israel were responsible for the Stuxnet computer 'worm'
which temporarily disabled centrifuges at the Natanz nuclear site
in 2010 and interrupted the enrichment of uranium;
and Israel has been accused of assassinating Iranian nuclear scientists.
Mr Fitzpatrick told us in February 2013 that the Stuxnet worm
had introduced a 'hiccup' into the programme but had not set it
back, and he noted that the series of assassinations appeared
to have come to a halt and had been "very forcefully denounced"
by the then US Secretary of State, Hillary Clinton.
79. The other route to neutralisation of facilities
is the use of force. Mr Jenkins
told us that if there were conclusive evidence that Iran had decided
to acquire nuclear weapons or had embarked upon producing the
highly enriched uranium or plutonium required, there would be
a case for seeking approval by the UN Security Council for the
use of force. As he observed, there is currently no such evidence,
at least not in the public domain.
80. There has been speculation about a possible unilateral
attempt by Israel to destroy Iranian nuclear facilities. The logistics
of such a strike, given the distance involved and the difficulty
of penetrating the underground Fordow complex, are formidable;
but Professor Johnson reminded us that Israel had proved itself
capable of eliminating the Osirak reactor in Iraq in 1981. He
argued that a military operation to neutralise Iranian facilities
was "doable" and that Israel was not bluffing: it had
the capacity and the will to carry out such a strike if negotiations
were to fail and it believed that it was under imminent threat.
He also hinted that some Arab states might permit Israeli aircraft
to use their airspace in the course of any such operation.
81. We believe that neither of these alternatives
to negotiation offer a realistic prospect of a long-term, sustainable
solution to current concerns over the Iranian nuclear programme.
The negotiations on the Joint Plan of Action are the most promising
forum for reaching a settlement which assuages fears about the
scope and intention of the Iranian nuclear programme. We
endorse the UK's decision to take part in negotiations with Iran
on its nuclear programme through the framework of the Joint Plan
82. There is, however, a major risk: a successful
outcome depends heavily upon mutual trust between Iran and the
P5+1, and that trust has until now been sorely lacking. On the
one hand, the P5+1 could recite a long catalogue of occasions
when Iran had concealed its nuclear activities and had failed
to comply with requirements of the Safeguarding Agreement under
the Nuclear Non-Proliferation Treaty, and when Iran had appeared
to be intent on frustrating any attempt at genuine negotiation.
On the other hand, many with influence in Iran have, for decades
and for reasons which are rooted in history, nursed suspicion
of Western motives; and Iran has felt unjustly demonised. Levels
of trust and co-operation reached a particularly low point during
the presidency of Mahmoud Ahmadinejad, whose antagonism towards
the West gave little or no indication that Iran was disposed to
reach any sort of settlement on the nuclear question which would
be acceptable to the P5+1.
THE ELECTION OF PRESIDENT ROUHANI
83. Since the election of President Rouhani in June
2013, there has been a marked change in the tone of much of Iran's
engagement with the West: while the invective has continued in
certain quarters (including the media), it has been balanced by
more moderate and less confrontational public statements in other
parts of the hierarchy in Iran. Part of this is attributable to
President Rouhani and Foreign Minister Zarif personally: the Foreign
Secretary told the House on 8 October 2013 that he had discussed
the conflict in Syria with Mr Zarif and that "it is clear
that the new President and Ministers in Iran are presenting themselves
and their country in a much more positive way than in the recent
past. There is no doubt that the tone of meetings with them is
Mr Straw, who encountered Mr Rouhani during the period between
2003 and 2005 when he was Foreign Secretary and Mr Rouhani was
Chief Nuclear Negotiator, has said of Mr Rouhani that "you
could do business with him, and we were able to do business with
84. The question for the UK and other members of
the P5+1 is whether they can put trust in President Rouhani, as
someone whose intentions are indeed to aim for a genuine resolution
to disagreements about Iran's nuclear programme, and whether he
can carry enough of the Iranian establishment with him to ensure
a broad-based commitment within Iran to any deal, or whether he
is in reality politically isolated.
85. It should not be forgotten that Mr Rouhani has
a long revolutionary pedigree and was a close colleague of Ayatollah
Khomeini before the 1979 Revolution.
Both BICOM and the Henry Jackson Society described Mr Rouhani
as "a regime insider" in their written submissions.
Mr Rouhani has held key positions as Secretary of the Supreme
National Security Council
between 1989 and 2005, National Security Adviser to the President
from 1989 to 1987 and from 2000 to 2005,
as Chief Nuclear Negotiator from 2003 to 2005; and as a member
of the Expediency Council
since 1997. We were told that Mr Rouhani had in the past taken
a hardline position on cracking down on dissent,
and several submissions referred to his account of having "duped"
the West in the course of nuclear negotiations.
Both BICOM and the Henry Jackson Society observed that under his
presidency there had been little visible sign of a new direction
in foreign policy (for instance on Syria, or support for Hezbollah);
religious intolerance continues unabated; civil society and the
media continue to be restricted; and the use of extreme punishment
has become more frequent rather than less.
86. On the other hand, Mr Rouhani's background as
an "insider" gives him (for now) credibility at the
highest levels of Iranian leadership, and we were told that he
has a good relationship with the Supreme Leader, Ayatollah Khamenei.
Lord Lamont, a member of the delegation from the All-Party Parliamentary
Group on Iran, which visited Iran in January 2014, told us:
I think it is a good thing that Rouhani is a
man of the regime, rather than a complete outsider-if he had been
a complete outsider, he probably wouldn't have been allowed to
stand. The fact that he has held so many different offices and
been at the centre of the regime in Iran gives him a greater capability
to deliver. He does appear to be trusted by the supreme leader,
Mr Khamenei, who has reluctantly allowed the negotiations to proceed,
while simultaneously saying that he doesn't think they will succeed
in the end.
A further sign of high-level trust in Mr Rouhani
and his allies lies in the transfer of the nuclear portfolio from
the Supreme National Security Council to the Ministry of Foreign
Affairs in September 2013.
87. That is not to say that President Rouhani's position
is entirely secure. His election success was clear: from a field
of six candidates, he was elected with 51% of the vote, despite
not being the preferred candidate of the Supreme Leader. During
his election campaign he succeeded in attracting the endorsement
of powerful figures from less hardline schools of thought in Iran,
including Ayatollah Hashemi Rafsanjani
and former President Khatami;
and public support for the main hardline candidate during the
2013 Presidential Election, Saeed Jalili, was strikingly low,
translating to just 11% of the vote.
Opinion within the Majlis, however, remains relatively hardline:
there was considerable opposition within the Majlis to the visit
by the All-Party Parliamentary Group on Iran in January 2014;
there were chants of "Death to Britain" in the Majlis
in November 2011 when the decision was taken to downgrade diplomatic
uncertainties remain about the extent to which it would accept
further concessions under the Joint Plan of Action (such as signing
the Additional Protocol permitting more intrusive inspections).
Other potent forces, such as the Islamic Revolutionary Guard Corps,
temporarily have less prominence but have not necessarily been
weakened. We are not persuaded by the suggestion that the neoconservative
order in Iran was "shattered" by the election of President
Conclusion on pursuing negotiations
88. We do not believe that the marked change in the
tone of Iran's approach to negotiations on its nuclear programme
indicates a change in what it wants to achieve: we see no evidence
that Iran is considering either aborting the programme or drawing
back from further development of enrichment capacity. Nor do we
believe that President Rouhani is necessarily a reformist at heart:
he is a pragmatist
who hopes to improve standards of living in Iran by persuading
the West to lift sanctions, while retaining in place as much of
the country's nuclear programme as possible. Professor Ansari
summed it up admirably, saying that "in a sense Rouhani has
been allowed to play reformist abroad but conservative at home".
89. We nonetheless believe that Mr Rouhani's political
skills and long experience will enable him to stand a good chance
of judging what concessions can and cannot be made on the nuclear
programme if he is to retain the confidence of the Supreme Leader
and other more militant elements within Iran. While Mr Rouhani
has the impetus of his election victory and demonstrably high
levels of public support, we believe that the P5+1 can have confidence
that he is an authoritative representative of Iran. We also believe
that, having stood on a platform of achieving an economic revival
by negotiating with the P5+1 and getting sanctions lifted, he
is genuinely committed to a sustainable deal. For now at least,
he should be trusted; but he should be judged by his actions,
not by his words.
90. The Joint Plan of Action itself contains the
foundations for building trust on a wider, not just personal,
level: it provides an opportunity for both sides to demonstrate
that they have adhered to commitments under the six-month interim
measures. As the Foreign Secretary has observed, the Plan is specific
and extensive, and it will be clear if Iran is failing to comply
with it. If that happens, the basis for trust will not have been
established and the P5+1 could revert to a full sanctions regime,
possibly strengthened. To take the view that Iran cannot be trusted
to deliver on any agreement would deny any attempt to reach
or indeed test an agreement.
91. Relief from sanctions is a priority for Iran,
and as long as the terms of any deal are acceptable to both sides,
it is in Iran's interest to abide by them rather than run the
risk of provoking a return to a sanctions regime which might be
We note that the IAEA has confirmed that Iran has, so far, met
its obligations under the interim measures.
FACTORS TO BE TAKEN INTO ACCOUNT
IN PURSUING NEGOTIATIONS
92. Negotiations are currently (July 2014) under
way to work out the details of a comprehensive solution, which
the Plan envisages would be implemented within one year of its
adoption. The six-month interim measures expire on 20 July, although
they may be renewed by mutual consent. This seemed to several
of our witnesses to be the most likely outcome,
although it should be noted that repeated renewal could, by prolonging
the limited sanctions relief, allow a cumulative relaxation of
pressure on Iran and enable it steadily to improve its negotiating
position. An added
sense of urgency flows from the fact that Baroness Ashton, who
is leading negotiations on behalf of the EU, is due to come to
the end of her term as High Representative at the end of October
2014. Furthermore, mid-term Congressional elections in November
may result in a political climate in the US which is less conducive
93. We make the following observations on negotiations
on the comprehensive agreement:
is probably no prospect of a lasting deal which does not allow
Iran to enrich uranium
capacity should be limited to a level which Iran would not reject
outright but which would still allow enough time for any attempt
at breakout to be detected and referred to the UN Security Councilwe
suggest six months as an absolute minimum
· Trust, which
is essential if the Plan is to succeed, may crumble unless the
comprehensive agreement enshrines a right for the IAEA to make
unannounced and intrusive inspections of all nuclear facilities,
products, designs and records
· The IAEA's
Additional Protocol offers a good basis for the more stringent
monitoring which is required, although it may be preferable to
build the key provisions into the terms of the comprehensive agreement
rather than require adoption of the Additional Protocol itself
sanctions undoubtedly played a major part in preparing the ground
for a more amenable Iranian negotiating position. They may not
have directly forced Iran to make concessions; but the fatigue
amongst large sections of the Iranian public with the international
isolation and disadvantage which flowed from sanctions was a factor
in the election of President Rouhani, which in turn paved the
way for more fruitful negotiations
· The limited
sanctions relief being applied under the Joint Plan of Action
has reduced pressure on Iran and has provided it with a breathing
space, but that should not necessarily be seen in a negative light:
it may even strengthen the appetite in Iran for taking the steps
necessary to allow further layers of sanctions to be peeled away
· We doubt
that any deal would have been achieved in Geneva in November 2013
had limited sanctions relief not been offered
· The Joint
Commission established under the Joint Plan of Action should include
activities at the Parchin military site as part of its discussions
"to facilitate resolution of past and present issues of concern"
the design of the Arak reactor so that it produces less plutonium
has value, but third-party monitoring of storage of the spent
fuelor preferably removal and third-party custody of itwould
be instrumental in helping to allay concerns.
SANCTIONS RELIEF FOR HUMANITARIAN
94. There is one point on which we take particular
issue with the Government. The sanctions applied by the EU involve,
amongst other things, restrictions on transfers of funds to and
from an Iranian person, entity or body, and prohibitions on EU
credit and financial institutions transferring funds to or from
Iranian banks. One of the undertakings in the Joint Plan of Action
was that the P5+1 would "establish a financial channel to
facilitate humanitarian trade for Iran's domestic needs using
Iranian oil revenues held abroad";
and the same channel could be used to enable direct payment of
fees to universities and colleges for Iranian students studying
abroad. Certain foreign and Iranian banks were to be specified
and enabled to facilitate the trade, without contravening those
aspects of the sanctions regime which remained in place.
95. In practice, it appears that the UK has not specified
any banks to provide the necessary financial channel. When we
took evidence in February and March 2014, there appeared to have
been little if any flow of humanitarian goods, as banks were not
prepared to offer the necessary facilities:
the FCO indicated that these decisions by banks were "commercial"
ones. We also
note that banking facilities for those with a legitimate requirement
have been disrupted: at the end of February, the Iranian Chargé
d'Affaires was unable to open a bank account in London, and Ben
Wallace MP told us that the All-Party Parliamentary Group had
had its bank account "cancelled".
There have since been signs of a recent increase in exports of
humanitarian goods from the UK to Iran, albeit from a low base.
UKTI data for the first quarter of 2014 show that the value of
exports from the UK to Iran of medicinal/pharmaceutical products
was £6.3 million from January to March 2014, up from £3.4
million from January to March 2013, and the value of exports of
"edible products and preparations" was £24 million
from January to March 2014, up from £0.4 million from January
to March 2013.
96. As the Foreign Secretary himself noted in a letter
to Mr Straw on 6 March 2014, "many banks have been wary of
processing the payments required. This has been driven in large
part because of risk aversion to US banking sanctions".
Lord Lamont, speaking in a debate in the House of Lords on 27
February, spoke of "US banking sanctions being imposed informally
by the back door on our own banking industry" and of "American
authorities threatening banks in the UK".
The Foreign Secretary told us in March that the US had provided
letters of comfort to selected banks to reassure them that it
was permissible to access Iranian oil revenues for humanitarian
trade, and he said that he was "keeping an eye" on the
issue and would give it further attention if arrangements were
not working out.
We note that where UK banks are conducting business which is permissible
under the terms of EU sanctions but not under the terms of US
extra-territorial sanctions, UK law (in the form of the Protection
of Trading Interests Act 1980) would protect UK businesses and
prevent the enforcement of those sanctions in the UK. However,
if those businesses use clearance services in the US for transactions,
the UK legislation would not insulate them from US legislation;
nor would the act of any US arm be immune.
97. Not enough is being done to put into practice
that part of the Joint Plan of Action which is designed to facilitate
trade with Iran in humanitarian goods. The UK should not assume
that letters of comfort from the US Treasury to banks will be
enough to reassure them that they will not be penalised commercially
for facilitating humanitarian trade. Ministers should state publicly
that they encourage UK banks to provide the necessary facilities
for trade in humanitarian goods and will if required defend to
the US Treasury their right to do so. If trade with Iran in humanitarian
goods is facilitated under the Joint Plan of Action, even if only
on a limited scale, vigilance will be needed if the diversion
of funds and illicit trade which occurred under the Oil-For-Food
Programme in Iraq is not to be repeated in Iran.
137 See Global Security: Iran, Fifth Report
of Session 2007-08, HC 142, FCO memorandum, paragraphs 101 to
Q 194 Back
Sir Robert Cooper Q 31 Back
On 12 April 2011 the European Council adopted Council Regulation
(EU) No 359 (2011), which required Member States to freeze assets
of named persons responsible for serious human rights violations
in Iran, and persons, entities or bodies associated with them.
On 14 April 2014, 86 individuals and one entity were subject to
asset freezes under human rights sanctions. See
Mr Straw Q 98; Professor Ansari Q 70 Back
Memorandum from Professor Ehteshami, paragraph 7 Back
HC Deb 25 November 2013 col 29 Back
Holly Topham, RUSI analyst, RUSI Journal January 2014 Back
Evidence from Mark Fitzpatrick, 5 February 2013, HC 952, Q 48 Back
See Sir Robert Cooper Q 38, Professor Ansari Q 79 Back
Memorandum from the FCO, Section 4 Back
Memorandum from the Henry Jackson Society, para 17 Back
One Iranian Minister, in conversation with members of the All-Party
Parliamentary Group on Iran during their visit in January 2014,
had described sanctions as "crippling". See Q 98 Back
Rt Hon Jack Straw MP and Ben Wallace MP, Q 116 and 117. See also
memorandum from the National Iranian American Council, para 1
Sir Robert Cooper Q 6; Mr Fitzpatrick Q 140 Back
The Guardian 27 September 2013 Back
Full text available at http://eeas.europa.eu/statements/docs/2013/131124_03_en.pdf Back
President Putin, Kremlin statement 24 November 2013, House of Commons Library Standard Note 6780 Back
Statement by President Obama Back
HC Deb 25 November 2013 col 23 Back
http://www.bbc.co.uk/news/world-middle-east-25075675. The Board of Deputies of British Jews
welcomed the progress made. Back
Professor Ali Ansari Q 68; Lord Lamont Q 97 Back
Professor Johnson, speaking on behalf of BICOM, Q 146 Back
Sir Robert Cooper Q 36 Back
Mark Fitzpatrick blog: "The surprisingly good Geneva deal",
25 November 2013 Back
Q 146 Back
Mr Hague Q 207; Baroness Ashton http://www.bbc.co.uk/news/world-middle-east-26500572 Back
HC Deb 21 January 2014 col 138 Back
Memorandum from the Henry Jackson Society, summary Back
Director of the Non-Proliferation and Disarmament programme at
the International Institute for Strategic Studies Back
Q 142 Back
Society for Worldwide Interbank Financial Telecommunication Back
Defined in the Joint Plan of Action as "transactions involving
food and agricultural products, medicine, medical devices, and
medical expenses incurred abroad". Back
Q 118; see also Professor Johnson Q 160 Back
Memorandum by Peter Jenkins, paragraph 17. Mr Jenkins was UK Permanent
Representative to the International Atomic Energy Agency from
2001 to 2006 Back
Q 160 Back
HC Deb 28 January 2014 col 472W Back
See for example The Independent 5 November 2012 Back
Q 173 Back
Memorandum from the Henry Jackson Society, paragraph 14 Back
Mr Fitzpatrick Q 128 Back
HC Deb 24 February 2014 col 55W Back
Memorandum from the Henry Jackson Society, paragraph 30. See also
letter from Simon Henderson and Olli Heinonen to The Economist,
6 July 2013 Back
Mr Fitzpatrick Q 131 Back
Memorandum from the Henry Jackson Society, paragraph 7 Back
HC Deb 25 November 2013 col 28 Back
HC Deb 4 February 2014 col 194W Back
See Mr Fitzpatrick Q 134 Back
The Henry Jackson Society suggested that the total value might
be rather higher, maybe not far short of $20 billion: see memorandum from the Henry Jackson Society,
paragraph 19 Back
See Joint Statement by the Board of Deputies of British Jews and the French CRIF
1 December 2013 Back
Q 189 Back
Memorandum from BICOM, paragraph 34 Back
Memorandum from the Henry Jackson Society, summary Back
HC Deb 24 February 2014, col 31 Back
'The surprisingly good Geneva deal', Mark Fitzpatrick blog, 25
November 2013 Back
'The surprisingly good Geneva deal', Mark Fitzpatrick blog, 25
November 2013 Back
Memorandum from Peter Jenkins, paragraph 7 Back
Memorandum from the National Iranian American Council, paragraph 4 Back
Lord Lamont Q 98 Back
Mr Fitzpatrick Q 121 Back
Evidence from Mark Fitzpatrick, 5 February 2013, HC 952, Q 45 Back
UK Permanent Representative to the IAEA, 2001 to 2006 Back
Memorandum from Peter Jenkins, paragraph 5 Back
Professor Johnson and Mr Kessler Q 178 to 181 Back
Memorandum by the FCO, section 2 Back
HC Deb 8 October 2013 col 27 Back
207 http://amanpour.blogs.cnn.com/2013/10/16/west-can-do-business-with-rouhani-former-counterpart-jack-straw-tells-amanpour/ Back
Memorandum from the Henry Jackson Society, paragraph 9 Back
The body with overall responsibility for foreign policy and national
security matters Back
An advisory body with ultimate adjudicatory power in disputes
over legislation Back
Memorandum from the British Parliamentary Committee for Iran Freedom Back
Memorandum from the British Parliamentary Committee for Iran Freedom,
page 1, memorandum from the National Council of Resistance of Iran,
section 4 Back
Q 150. See also memorandum from the FCO, section 5 Back
Sir Robert Cooper, Q 5 Back
Q 99 Back
Times of Israel 5 September 2013 Back
President of Iran from 1989 to 1997 and now Chairman of the Expediency
Professor Ansari Q 51 Back
Memorandum from the National Iranian American Council, paragraph 9 Back
Q 87 Back
HC Deb 30 Nov 11 col 963 Back
Memorandum from Professor Ehteshami, paragraph 6 Back
Professor Ansari described his politics as "somewhat opaque",
Q 49 Back
Q 67 Back
HC Deb 25 November 2013 col 37 Back
Mr Fitzpatrick Q 137, Mr Kessler Q 148 Back
also Mr Hague Q 195 Back
Mr Fitzpatrick Q 118. See also memorandum from the Henry Jackson Society, paragraph 16. Back
See Mr Kessler Q 172 Back
See Mr Wallace Q 113; also memorandum from Peter Jenkins, paragraph 13,
and HC Deb 25 November 2013 col 40 Back
See Sir Robert Cooper Q 28 Back
The plant could be converted to use "light water" rather
than heavy water: see Lord Lamont Q 110, Mr Fitzpatrick Q 118,
and memorandum from Peter Jenkins, paragraph 22 Back
'Humanitarian trade' was defined as transactions involving food
and agricultural products, medicine, medical devices, and medical
expenses incurred abroad Back
See for instance memorandum from the British Council, paragraph 4.6 Back
HC Deb 24 February 2014 col 33 Back
Mr Wallace Q 97 Back
Data supplied by the FCO. Back
HC Deb 26 March 2014 col 117WH Back
HL Deb 27 February 2014 col 1037 Back
Q 212 Back
See HC Deb 26 March 2014 cols 117WH to 124 WH Back