1 Restrictive measures against Iran in
connection with its nuclear programme and the Joint Comprehensive
Plan of Action (JCPOA)
Committee's assessment |
Politically important |
Committee's decision | Not cleared from scrutiny; recommended for debate on the floor of the House together with other related documents already recommended for debate (decision reported 9 September 2015) concerning Restrictive measures again Iran
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Document details | (a) Council Decision (b) Council Regulation (c) Council
Implementing Regulation
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Legal base | (a) Article 29 TEU, unanimity; (b) Article 215 TFEU, QMV; (c) Article 46 of Council Regulation (EU) No. 267/2012, QMV
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Department | Foreign and Commonwealth Office
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Document Numbers | (a) (37192) ; (b) (37193) ; (c) (37194),
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Summary and Committee's conclusions
1.1 On 14 July 2015, the E3+3 (China, France, Germany, the Russian
Federation, the United Kingdom and the United States), supported
by the EU High Representative for Foreign Affairs and Security
Policy (HR; Federica Mogherini), reached an agreement with Iran
the Joint Comprehensive Plan of Action (JCPOA). In a Joint
Statement in Vienna, EU High Representative Mogherini and Iranian
Foreign Minister Zarif said:
the
JCPOA will ensure that Iran's nuclear programme will be exclusively
peaceful, and mark a fundamental shift in their approach to this
issue;
they anticipate that full implementation
will positively contribute to regional and international peace
and security;
under no circumstances will Iran ever
seek, develop or acquire any nuclear weapons;
the JCPOA includes Iran's own long-term
plan with agreed limitations on Iran's nuclear program, and will
produce the comprehensive lifting of all UN Security Council sanctions
as well as multilateral and national sanctions related to Iran's
nuclear programme, including steps on access in areas of trade,
technology, finance, and energy;
the JCPOA is a balanced deal that respects
the interests of all sides, and is also complex, detailed and
technical;
the JCPOA is "not only a deal but
a good deal. And a good deal for all sides and the wider
international community";
the JCPOA "opens new possibilities
and a way forward to end a crisis that has lasted for more than
10 years"; and
they were "committed to make sure
this JCPOA is fully implemented, counting also on the contribution
of the International Atomic Energy Agency".[1]
1.2 On 20 July 2015, the United Nations Security
Council voted unanimously to adopt Security Council Resolution
(UNSCR) 2231 (2015), endorsing the JCPOA. In a statement issued
on that day, the UNSC said:
"The Council, through the 104-page text,
including annexes that detailed the sanctions-related provisions
and listings, requested the International Atomic Energy Agency
to undertake verification and monitoring of Iran's compliance.
It reaffirmed that Iran should cooperate fully with the Agency
to resolve all outstanding issues. Upon receipt of a positive
report from the Agency, the Council would terminate sanctions
set out in resolutions adopted between 2006 and 2015.
"Furthermore, the Council decided that the
resolution's provisions should, pending confirmation of implementation,
expire 10 years after its adoption, and with that, it would remove
the Iranian nuclear issue from its agenda. At the same time, the
text outlined the process for automatically reinstating the sanctions
in the event of non-compliance."[2]
1.3 Council Decision (CFSP) 2015/1336 of 31 July
2015 and Council Regulation (EU) 2015/1327 of 31 July 2015 transposed
the UNSCR into EU law. They were considered by the Committee on
3 September.[3]
1.4 The JCPOA also required the Council to amend
the existing Decision (2010/413/CFSP) and Regulation ((EU) 267/2012)
on, or before, "Adoption Day" on 18 October 2015.
1.5 This further Council Decision, Council Regulation
and Council Implementing Regulation, which were adopted on 18
October, introduced the necessary derogations to the existing
restrictive measures to allow Iran to meet its obligations under
the JCPOA (see "Background" for details of the existing
restrictive measures).
1.6 The Minister for Europe (Mr David Lidington)
explains that the amendments implement sanctions relief by terminating
the implementation of nuclear-related economic and financial sanctions,
in accordance with the JCPOA (see "Background" for details).
However, this sanctions relief will take effect only when the
International Atomic Energy Agency (IAEA) has verified that Iran
has completed the agreed steps on its nuclear programme.
1.7 The Minister also:
explains
that the JCPOA required the Council to adopt the amended Decision
and Regulation as specified in the UNSCR, i.e., 90 days after
the UN Security Council Resolution endorsed the agreement, or
earlier by mutual consent of the JCPOA participants;
underlines
how important it was "that the EU legislation captured the
spirit and effect of the JCPOA and translated this accurately
into a detailed legal text";
says this "[i]ntensive and highly
technical work continued on the attached documents into October
2015" until they were finally agreed for adoption on 18 October;
notes that, "due to the need to
agree the documents by 'Adoption Day' to meet our JCPOA obligations,
there was insufficient time to follow the normal scrutiny procedure";
and
regrets that "the need for the override
was, on this occasion, unavoidable".
1.8 Finally, looking ahead, the Minister says:
"Although the amending legislation was required
to be in place when the deal comes into force on 'Adoption Day',
the sanctions relief will not be triggered until 'Implementation
Day'. This will occur only when the IAEA verifies that Iran has
completed the agreed actions on its nuclear programme. We expect
'Implementation Day' to occur in early 2016, but until the IAEA
verifies that Iran has completed the agreed activities the exact
date will not be clear."
1.9 Our previous relevant Report contains the
background on earlier stages of the negotiations, full information
on the JCPOA, and reaction to it. This included the US representative
at the UN stressing that implementation was "everything,"
that the tasks were far from over and that the resolution included
a "snap-back" system triggering reinstatement of the
sanctions in the event of non-compliance.[4]
1.10 At that time, one commentator described "the
idea that sanctions can come crashing quickly down again"
as "over-optimistic".[5]
1.11 Writing two months later, the Prime Minister,
the President of France and the Chancellor of Germany said:
"Iran will have strong incentives not
to cheat: The near certainty of getting caught and the consequences
that would follow would make this a losing option."[6]
1.12 For our part, in considering the first post-JCPOA
amendments, on 9 September, we noted that, nearly two months having
passed since the heady days of mid-July, there had been time for
further consideration of the JCPOA and its possible repercussions;
that the time was ripe for the House to have a further opportunity
to debate these matters; that a debate should take place immediately
after the House returned from the "conference" recess;
and that it should be held on the floor of the House.[7]
1.13 It is now early November, and the debate
has not yet been arranged. We urge the Government to do so forthwith.
1.14 In the meantime, in the circumstances and
on this occasion, we do not take issue with the Minister having
agreed to the adoption of these EU measures ahead of scrutiny.
Nonetheless, the documents remain under scrutiny, pending the
holding of the debate, of which they should form part.
Full
details of the documents:
(a) Council Decision
(CFSP) 2015/1863 of 18 October 2015 amending Decision 2010/413/CFSP
concerning restrictive measures against Iran: (37192), ;
(b) Council Regulation (EU) 2015/1861 of 18 October 2015 amending
Regulation (EU) No. 267/2012 concerning restrictive measures against
Iran: (37193), ; (c) Council Implementing Regulation (EU)
2015/1862 of 18 October 2015 implementing Regulation (EU) No.
267/2012 concerning restrictive measures against Iran: (37194),
.
Background
1.15 As our predecessors' previous Reports illustrate
in detail,[8] the EU has
been engaged since December 2006 in a "dual track" strategy
with both engagement and restrictive measures
regarding Iran's nuclear activities, not simply implementing in
the EU, but also strengthening in that context, successive UN
Security Council Resolutions (UNSCRs).
1.16 In broad terms, UNSCR 1929 of 9 June 2010:
reaffirmed
that Iran shall cooperate fully with the IAEA;
banned new Iranian nuclear facilities
and banned Iranian nuclear investment in third countries;
banned exports of several major categories
of arms, and further restricted Iran's ballistic missile programme;
froze 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 had been involved in multiple sanctions violations cases;
froze the assets of, and banned travel
by, one senior nuclear scientist;
implemented a regime for inspecting suspected
illicit cargoes and authorising their seizure and disposal;
placed restrictions on financial services,
including insurance and reinsurance, where there was suspicion
of a proliferation link;
banned existing and new correspondent
banking relationships where there were proliferation concerns;
established a Panel of Experts to advise
and assist on sanctions implementation; and
reaffirmed the dual track strategy (of
pressure and diplomacy).
Council Decision 2010/413/CFSP
1.17 As well as implementing the measures contained
in UNSCR 1929, the EU imposed 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).
1.18 Council Decision 2010/413/CFSP was adopted by
the 26 July 2010 Foreign Affairs Council, together with a Regulation
(Council Regulation (EU) 961/2010) extending the list of entities
and individuals subject to an assets freeze.
1.19 A further package of EU sanctions was adopted
by the 15 October 2012 Foreign Affairs Council. The Council Regulation
required to implement the October package was adopted on 21 December
2012. It includes:
· Finance:
a financial cut-off, prohibiting all but specifically licensed
trade with a notification system for humanitarian payments up
to 100,000 and other payments (40,000); a full listing
of the Central Bank of Iran except to permit channels for the
provision of liquidity and repayment of debts; a full ban on the
public provision of export credit guarantees (adding short term
to the already prohibited medium and long term);
· Energy
sector: a gas embargo: a further ban on
exporting equipment for the Iranian Energy Sector; a ban on construction
of oil tankers;
· Trade:
bans on exporting graphite and metals that can be used in Iran's
nuclear programme; naval equipment for ship building and maintenance;
software for integrating industrial processes;
· Transport:
bans on the flagging and classification of Iranian oil tankers
and cargo vessels; and on the leasing/chartering of vessels for
the transport or storage of Iranian oil; and
· New
Designations: the Council Decision and
Council Implementing Regulation imposed an asset freeze on further
Iranian companies and updated the entries for three already listed
entities.[9]
1.20 On 18 October 2015, EU High Representative Federica
Mogherini and Iranian Foreign Minister Javad Zarif issued the
following Joint Statement:
"Today is Adoption Day of the Joint Comprehensive
Plan of Action (JCPOA) related to the Iranian nuclear programme.
"This is another important milestone that
brings us a step closer to the beginning of implementation of
the JCPOA, to which we are strongly committed.
"We have respected the timetable set out
in the JCPOA, which demonstrates our collective will to stick
to its provisions.
"Iran will now start the implementation
of its nuclear-related commitments with the objective of full
and effective completion. The International Atomic Energy Agency
(IAEA) will make the necessary preparations for the monitoring
and verification of these steps.
"The EU today adopted the legislative framework
for lifting all of its nuclear-related economic and financial
sanctions.
"It will take effect on Implementation Day,
simultaneously with the IAEA-verified implementation of agreed
nuclear measures by Iran.
"The United States is taking action today
to cease application of nuclear-related statutory sanctions on
Iran effective on Implementation Day when the IAEA has verified
implementation of agreed nuclear measures by Iran, as specified
in the JCPOA; and is directing all appropriate additional measures
be taken to implement the cessation of application of sanctions,
including the termination of Executive Orders and the licensing
of activities, as specified in the JCPOA.
"The Joint Commission foreseen under the
JCPOA will now convene for its first meeting at the level of Political
Directors on 19 October in Vienna, in order to further advance
preparations for implementing the Joint Comprehensive Plan of
Action.
"All sides remain strongly committed to
ensuring that implementation of the Joint Comprehensive Plan of
Action can start as soon as possible. To this end, we will make
all the necessary preparations."[10]
The Council Decision, Council Regulation and Council
Implementing Regulation
1.21 In his Explanatory Memorandum of 29 October
2015, the Minister notes that:
"The UNSC voted unanimously to adopt UNSCR
2231 endorsing the JCPOA. The amendments to the Council Decision
and Regulation will allow the initial sanctions relief agreed
under the JCPOA."
The Government's view
1.22 The Minister continues his analysis as follows:
"Whilst full implementation of the JCPOA
will permit the flow of certain goods and services, it will also
impose strict limits and inspections on Iran's nuclear programme.
The IAEA will have unprecedented access to verify Iran's adherence
to these restrictions, giving the international community confidence
that Iran's nuclear programme is, and will remain, exclusively
peaceful.
"The JCPOA, if fully implemented, will eventually
entail the comprehensive lifting of all UN Security Council sanctions
as well as multilateral and national sanctions related to Iran's
nuclear programme."
1.23 With respect to the details of the changes,
the Minister says:
"The EU will terminate all provisions of
the EU Principal Regulation, as subsequently amended, implementing
all nuclear-related economic and financial sanctions, including
related designations, simultaneously with the IAEA-verified implementation
of agreed nuclear-related measures by Iran as specified in Annex
V, which cover all sanctions and restrictive measures in the following
areas, as described in Annex II:
a) "Transfers of funds between EU persons
and entities, including financial institutions, and Iranian persons
and entities, including financial institutions;
b) "Banking activities, including the establishment
of new correspondent banking relationships and the opening of
new branches and subsidiaries of Iranian banks in the territories
of EU Member States;
c) "Provision of insurance and reinsurance;
d) "Supply of specialised financial messaging
services, including SWIFT, for persons and entities set out in
Attachment 1 to Annex II, including the Central Bank of Iran and
Iranian financial institutions;
e) "Financial support for trade with Iran
(export credit, guarantees or insurance);
f) "Commitments for grants, financial assistance
and concessional loans to the Government of Iran;
g) "Transactions in public or public-guaranteed
bonds;
h) "Import and transport of Iranian oil,
petroleum products, gas and petrochemical products;
i) "Export of key equipment or technology
for the oil, gas and petrochemical sectors;
j) "Investment in the oil, gas and petrochemical
sectors;
k) "Export of key naval equipment and technology;
l) "Design and construction of cargo vessels
and oil tankers;
m) "Provision of flagging and classification
services;
n) "Access to EU airports of Iranian cargo
flights;
o) "Export of gold, precious metals and
diamonds;
p) "Delivery of Iranian banknotes and coinage;
q) "Export of graphite, raw or semi-finished
metals such as aluminium and steel, and export or software for
integrating industrial processes;
r) "Designation of persons, entities and
bodies (asset freeze and visa ban) set out in Attachment 1 to
Annex II; and
s) "Associated services for each of the
categories above."
The Minister's letter of 29 October 2015
1.24 The Minister explains that:
The
JCPOA required the Council to adopt the amended Decision and Regulation
on "Adoption Day", 90 days after the UN Security Council
Resolution (UNSCR) endorsed the agreement, or earlier by mutual
consent of the JCPOA participants;
however, sanctions relief will only take
effect when the IAEA verifies that Iran has completed the agreed
steps on its nuclear programme;
the UN Security Council voted unanimously
to adopt UNSCR 2231 on 20 July 2015;
it "was extremely important that
the EU legislation captured the spirit and effect of the JCPOA
and translated this accurately into a detailed legal text";
"Intensive and highly technical
work continued on the attached documents into October 2015";
they were finally agreed for adoption
on 18 October, "Adoption Day"; and
"Unfortunately, due to the need to agree
the documents by "Adoption Day" to meet our JCPOA obligations,
there was insufficient time to follow the normal scrutiny procedure.
"I am aware of the Committee's interest
in documents relating to the EU sanctions regime against Iran,
and I take the responsibility to keep your Committee informed
on these issues extremely seriously. I regret that the need for
the override was, on this occasion, unavoidable."
Previous Committee Reports
None, but see (36973), ; (36974), ;
(36975), ; (36981), ; (37030), ; (37032),
; (37031), ; (37033), : Third Report HC 342-iii
(2015-16), chapter 5 (9 September 2015); also see (36568), :
Twenty-eighth Report HC 219-xxvii (2014-15), chapter 6 (7 January
2015); and (36529), : Twenty-fifth Report HC 219-xxiv (2014-15),
chapter 15 (10 December 2014); and (36237), : Ninth Report
HC 219-ix (2014-15), chapter 41 (3 September 2014); also see (35964)
and (35965) : Forty-seventh Report HC 86-xlii (2012-13),
chapter 11 (30 April 2014) and (35712) 18163/13: Thirty-first
Report HC 83-xxviii (2013-14), chapter 15 (22 January 2014), and
the earlier Reports referred to therein.
1 See Joint Statement, which includes the full text
of the Joint Comprehensive Plan of Action and its five annexes:
Annex I Nuclear related commitments; Annex II Sanctions related commitments;
Annex II Attachments; Annex III Civil nuclear cooperation; Annex IV Joint Commission;
and Annex V Implementation Plan. Back
2
See UN Statement for full details. Back
3
See (36973), -; (36974), -; (36975), -; (36981), -; (37030), -;
(37032), -; (37031), -; (37033), -: Third Report HC 342-iii (2015-16),
chapter 5 (9 September 2015). Back
4
See UN Statement for full details. Back
5
See "The Times" of 15 July 2015. Back
6
See Cameron, Hollande and Merkel: Why we support the Iran deal,
in the Washington Post of 10 September 2015. Back
7
See (36973), -; (36974), -; (36975), -; (36981), -; (37030), -;
(37032), -; (37031), -; (37033), -: Third Report HC 342-iii (2015-16),
chapter 5 (9 September 2015). Back
8
See those cited at the end of this chapter of our Report. Back
9
For the full background, see the European External Action Service
(EEAS) Fact sheet on the European Union and Iran. Back
10
See Joint Statement. Back
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