Documents considered by the Committee on 22 November 2017 Contents

26Restrictive measures against Iran

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny

Document details

Council Decision 2014/776 amending Decision 2010/413 concerning restrictive measures against Iran

Legal base

Article 29 TEU and Article 23 of Decision 2010/413, unanimity

Department

Foreign and Commonwealth Office

Document Number

(36504),—

Summary and Committee’s conclusions

26.1Council Decision 2014/776, adopted on 7 November, re-imposed restrictive measures (on the basis of a revised statement of reasons) on three entities and one individual, all of whom had successfully challenged the imposition of restrictive measures in the General Court (Sina Bank, Sorinet Commercial Trust Bankers, Shariff University of Technology and Babak Zanjani). It delists an entity (Ayra Niroo Nik) because restrictive measures had been imposed upon it on the grounds that it was a front company for another entity (Fulmen) which had also successfully challenged the restrictive measures imposed upon it. Finally it updated the information concerning three other entities that were already subject to restrictive measures.

26.2The Decision was adopted in override of Parliamentary scrutiny. The previous Committee sought further information concerning the justification for the override of scrutiny; (a) whether, and if so, why, the restrictive measures against the relisted individual and entities has been allowed to lapse, (b) justification for the length of time taken to delist Ayra Niroo Nik and (c) the risk of asset flight in the case of the relisted entities.

26.3The then Minister (Mr David Lidington) responded on 10 December 2014. This letter has only recently come to the attention of the Committee. Its substance is reproduced below.

26.4We are grateful for the further information provided and now clear these documents from scrutiny.

26.5We agree that it is regrettable that the EU allowed the restrictive measures in respect of Sina Bank, Sorinet Commercial Trust Bankers, Shariff University of Technology and Babak Zanjani to lapse before relisting. But as this did happen, and in the light of the further explanations, we consider the override of scrutiny understandable.

Full details of the documents

Council Decision 2014/776 amending Decision 2010/413 concerning restrictive measures against Iran: (36504),—.

The then Minister’s letter of 10 December 2014

26.6The then Minister responded to the previous Committee’s requests as follows:

“You asked whether EU restrictive measures against Babak Zanjani, Sorinet Commercial Trust Bankers and Sharif University of Technology lapsed after the end of the appeal period following the General Court judgment to annul the listings.

“Regrettably, this was the case. Unfortunately the EU was unable to agree a new Council Decision to re-list these entities. This was in part due to the closure of the EU institutions over the summer period and the political sensitivities around the week of E3+3 nuclear negotiations in September. I appreciate that this is far from ideal.

“Following the return to normal business of the EU institutions, it was important to relist these entities as quickly as possible. When making my decision to override the normal scrutiny process, I took two factors into account. Firstly, in my judgment, had we gone through the scrutiny process, the relistings would have been announced uncomfortably close to the nuclear negotiations deadline of 24 November. Although these were not new listings as such, it would have had an impact on the negotiations. Secondly, had we gone through the scrutiny process, the risk of asset flight would have remained throughout the process given that the listings had lapsed.

“This was another reason to relist as quickly as possible. I’m afraid that for these two reasons, I felt an override to the normal scrutiny process was necessary.

“You also asked about Arya Niroo Nik and why it took so long to be delisted, following the General Court judgment in Fulmen on 28 November 2013 (Case C-280/12 P). Arya Niroo Nik is described in the relevant statement of reasons as “a front company used by Fulmen for some of its operation”. Therefore, following the annulment of the Fulmen listing in late 2013 the Council decided that there were no longer grounds to list Arya Niroo Nik and delisted it in 2014. Such delisting would not have been automatically effected by the Fulmen judgment and the entity itself did not request to be delisted, so this may have resulted in the listing being de-prioritised (at that time there were around 45 challenges at the EU level, out of around 600 listings). There is a slight risk that the entity could challenge the Council on this delay. It should be noted that the Council, not Her Majesty’s Government, owns this risk.

“In regards to the relisted entities, you asked to what extent there was a risk of significant damage if they were tipped off beforehand. Asset flight was one of the factors I considered, but there were other factors relating to the E3 + 3 nuclear negotiations, as outlined above, which I consider made the scrutiny override unavoidable.”

Previous Committee Reports

Twenty-second Report HC 219–xxi (2014–15), chapter 7 (26 November 2014).





28 November 2017