No prosperity without justice: the UK’s relationship with Iran Contents

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2Future of the Nuclear Deal

8.The Joint Comprehensive Plan of Action (JCPOA) was the culmination of nearly a decade of negotiations between the UK, US, France, Germany, China, Russia (the P5+1) and Iran following reports from the International Atomic Energy Agency (IAEA) in 2003 that Iran had covertly made substantial progress in developing its civil nuclear capabilities.4 Further concerns over Iran’s transparency and willingness to provide the IAEA with sufficient access to verify the peaceful nature of its nuclear programme led to a series of UN Security Council Resolutions, beginning in 2006, which imposed economic sanctions on Iran.5 The provisions of these resolutions terminated upon implementation of the JCPOA, which traded sanctions relief for verifiable restrictions on Iran’s nuclear programme. The two years of full implementation from 2016 to 2018 saw frequent inspection of Iran’s nuclear sites by the IAEA, which never found Iran to be in breach of its enrichment commitments.6 Restrictions on heavy water were breached twice in 2016 but were quickly remedied.78

9.The JCPOA was controversial from the beginning due to its limited scope. The deal sought to curtail Iran’s nuclear programme, but made no progress in addressing Iran’s human rights violations, or its financial and military support for its network of Shia proxies and armed groups across the Middle East. While the deal was championed by the Democratic administration in the US and the Conservative government in the UK, significant opposition remained amongst the respective congressional and parliamentary members of those parties, and more broadly, over several key failings and omissions which are discussed later in this chapter.

10.US President Donald Trump announced the United States’ re-imposition of sanctions on Iran in May 2018 citing concerns that Iran’s destabilising regional activity, including its development of ballistic missiles, was not addressed in the JCPOA.9 President Trump advocated a successor to the JCPOA which addressed “Iran’s ballistic missile program; […] its terrorist activities worldwide; and […] its menacing activity across the Middle East”.10 This proposal was expounded by US Secretary of State Mike Pompeo to include an IAEA-verified end to all military nuclear proliferation, a permanent end to enrichment and plutonium reprocessing, and a declaration of all previous military dimensions to Iran’s nuclear programme, as well as restrictions on ballistic missiles, and cessation of support for regional proxies, specifically against US regional allies.11 Secretary Pompeo also stated that Iran must release citizens of the US and its allies “detained on spurious charges” and later included domestic human rights improvements within the scope of the US administration’s proposed deal.1213

11.On 8 May 2019, the one-year anniversary of US withdrawal from the nuclear deal, Iran announced it would be reducing its compliance with the JCPOA. It also announced a programme of further deviation unless the remaining signatories could provide sufficient economic relief within 60 days.14 The three European signatories (E3) to the JCPOA − the UK, France and Germany − developed The Instrument in Support of Trade Exchanges (INSTEX) in January 2019 to facilitate non-US dollar and non-SWIFT transactions with Iran. Iran deemed this measure insufficient in mitigating the effects of US sanctions. From July 2019, Iran gradually reduced its compliance with the JCPOA and announced further deviations at 60-day intervals. As of December 2020, Iran has breached restrictions on stockpiles of enriched uranium and heavy water, research and development, operability of its enrichment site at Fordo, and the number of centrifuges in operation.15 These concerns over continued breaches of enrichment restrictions in November coincided with the killing of Mohsen Fakhrizadeh, Iran’s most senior nuclear scientist, the long-term implications of which are unclear.16 The IAEA additionally noted in June that Iran denied it access to two locations and declined to answer questions on possible undeclared nuclear material,17 and in October that Iran had begun construction of an underground centrifuge assembly plant.18 Rafael Grossi, the Director General of the IAEA noted in October 2020 that Iran does not possess the level of enriched uranium necessary for one nuclear weapon.19 Ellie Geranmayeh, Deputy Director, Middle East and North Africa programme at European Council on Foreign Relations, and Sir Richard Dalton, former UK Ambassador to Iran, observed in their written evidence that in the absence of an active programme, Iran is in one sense no closer to constructing a nuclear weapon than during its period of full compliance with the JCPOA, although its theoretical ‘break-out’ time has nonetheless been substantially reduced.20

12.The US and Iran have made little progress in addressing their respective concerns. US Treasury Secretary Steven Mnuchin stated that Iran must “cease support for terrorism and end destructive regional activities immediately” and “stop ballistic missiles and abandon their nuclear ambitions” before seeking sanctions relief.21 However, Iranian President Hassan Rouhani has refused to negotiate with the United States until its sanctions on Iran are lifted. On the role the UK might play in breaking the impasse, Dr Aniseh Bassiri Tabrizi, Senior Research Fellow at the Royal United Services Institute, noted that the UK is well placed “to convince the US that, without incentives in the form of sanction relief or a face-saving exit strategy, Iran is unlikely to cave in to pressure” and stressed the mediatory role the UK could play between the E3 and the US.22 Kasra Aarabi, Analyst with the Tony Blair Institute for Global Change, also emphasised the role the UK could play in bridging this transatlantic policy gap, highlighting the need for the UK to address the challenges posed by Iran alongside international partners as “The Islamic Republic has, and will continue to, exploit disagreements between the US and Europe to its advantage.”23 Alongside its relationship with the E3 and the US, the UK enjoys a strong historical bond with the member states of the Gulf Cooperation Council (GCC) and Israel, as well as a multitude of important regional partners. Consequently, the UK is uniquely placed to build regional and international consensus on addressing Iran’s malign activity.

13.The US’s deviation from the approach of the P5+1 has had far reaching consequences. Witnesses noted that ‘maximum pressure’ had caused significant economic hardship to ordinary Iranians and profoundly influenced Iran’s domestic political scene which had consequently seen the election of hardline candidates.24 Ellie Geranmayeh further noted that the policy had “pushed Iran into a corner” resulting in an escalation of regional tensions in the absence of “space for genuine diplomacy”.25

14.Perhaps most concerningly, Dr Anicée Van Engeland, Senior Lecturer in International Security at Cranfield Forensic Institute, argued that “Trying to suffocate Iran economically and change it politically have been mistakes that have driven the country into the arms of Russia and China.”26 Indeed, Behnam Ben Taleblu, Senior Fellow at the Foundation for Defense of Democracies, noted that Russia and China, as “anti-status quo actors” which are “hostile to the liberal-led international system”, “feel comfortable selectively empowering Iran”.27 In October 2020, it was reported that Iran was in the latter stages of negotiating a 25-year Comprehensive Strategic Cooperation Agreement with China designed to advance common interests and counter unilateralism.28 This Eastward-looking approach was identified by Ellie Geranmayeh as part of Iran’s preference for deeper ties with states “uninterested in regime change” which can ultimately offer economic cooperation with fewer “political strings attached”.29

15.Disunity in addressing the nuclear issue, especially between the US and the E3, has not served the UK’s interests. Instead, it has disincentivised Iranian engagement with the West and presented an opportunity for Russia and China to pursue their respective agendas in the Middle East. In the absence of decisive leadership and multilateral cooperation going forward, there is a risk that Iran will turn further to Russia and China for the economic relief they can each offer at a knock-down political price.

Known issues

16.The Foreign Secretary characterised the JCPOA as “not a perfect deal”30 although stated in written evidence that, for the time being at least, it remains “the best current way of constraining Iran’s nuclear programme.”31 However this view was not shared by all our witnesses. Behnam Ben Taleblu noted that lapsing sunset clauses, such as the arms embargo, coupled with Iran’s escalation of regional conflict and incremental noncompliance with its nuclear agreements “make the JCPOA not worth salvaging”.32 The JCPOA’s sunset clauses have proved controversial since its inception.33 The UN embargo on conventional arms was lifted in October 2020,34 and significant additional restrictions are due to expire in 2023 (UN sanctions on ballistic missiles), 2025 (remaining EU sanctions), 2030 (end of several enrichment caps) and 2040 (end of IAEA monitoring of uranium production).35

17.The United States’ 2018 withdrawal from the JCPOA provoked a mixed response amongst the members states of the Gulf Cooperation Council (GCC). The United Arab Emirates, Saudi Arabia and Bahrain broadly supported the move; the latter two specifically citing the JCPOA’s failure to address Iran’s ballistic missile programme and Iran’s destabilising regional presence as significant shortcomings.363738 The responses from Kuwait, Qatar and Oman were more muted and did not expressly support US withdrawal; Kuwait stated it “understands and respects” the US position, and Oman and Qatar respectively warned against confrontation and emphasised dialogue to promote stability in the region.39

18.Every member of the GCC is well within range of Iranian ballistic missiles, and the threat is of particular concern to Saudi Arabia, which saw two sets of attacks on its oil fields in September 2019.40 Witnesses were divided on whether a replacement or renegotiation of the JCPOA would be ineffective without restrictions on ballistic missiles. Ellie Geranmayeh noted that the lengthening of Iran’s break-out time under the JCPOA “considerably reduces the threat posed by any Iranian efforts to build missiles capable of carrying nuclear warheads” and suggested that a regional security framework might more realistically constrain Iran’s ballistic missile capabilities.41 Dr Sanam Vakil took a slightly different approach, stating “[a]ny improvements made to the JCPOA should endeavour to address Iran’s ballistic missile program”, although she agreed that a complementary framework agreeing similar constraints on Iran’s neighbours would be necessary before any Iranian concessions.42 Ballistic missiles are not specifically covered by the JCPOA, although Dr Tabrizi notes that those capable of delivering a nuclear warhead are restricted through United Nations Security Council Resolution 2231 and could theoretically be re-addressed in a successor to, or renegotiation of, the JCPOA.43 Crucially, the language of UNSCR 2231 is non-binding and only “called on” Iran “not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons”.44 Despite this, some witnesses raised concerns that Iran continued to test ballistic missiles theoretically capable of delivering nuclear weapons.45

19.A significant weakness of UN Security Council Resolution 2231 was its failure to prohibit Iran from developing ballistic missiles capable of delivering nuclear warheads. In a treaty fundamentally designed to deliver non-proliferation assurances, it is entirely reasonable that the JCPOA should place a binding restriction on Iran from developing such missiles.

20.The IAEA’s timetable for inspection of Iran’s declared and undeclared nuclear sites has also proved controversial. Should the IAEA wish to inspect an undeclared nuclear site, it must submit a request to Iran for access. In the event of refusal by Iran to grant access, a mediatory process by the Joint Commission taking up to seven days can begin within 14 days of the initial IAEA request with a resolution agreed by simple majority. Iran then has three days to implement the Joint Commission’s decision.46 This theoretical 24-day window has been highlighted as a flaw in the JCPOA by some commentators fearing it provides Iran a window to remove evidence of non-compliance47 although, as the Center for Arms Control and Non-Proliferation notes, 24 days is not nearly long enough for the removal of all traces of nuclear material.48 Commentators noted that in the event of a dispute over Iran’s non-compliance with an IAEA request, sanctions could not be ‘snap-backed’ for a further 65 days, presenting a challenge to the agreement if Iran reversed its opposition to inspection in the interim.49 The question left by the absence of a definitive timetable within Annex I, Section Q of the JCPOA has led some to question the agreement’s usefulness. Additionally, Iranian leaders have publicly stated that that IAEA’s access to certain sites will be refused, which further raises concerns over the agreement’s enforcement mechanisms.50

21.Iran could be more forthcoming when granting access for IAEA inspections. Additionally, Iran has publicly stated it would not allow inspection of military sites, despite such visits falling within the terms of the JCPOA. These actions undermine political confidence in the nuclear deal, so additional penalties or provisions could be introduced to encourage a behaviour change.

22.Annex I, Section Q, paragraph 78 of the JCPOA does not set out a definitive timetable for action in a potential period between non-compliance with the Joint Commission and the snapback of sanctions. This lack of clarity has proved contentious. Clarifying this section of the agreement would help to satisfy all parties that impediments to the IAEA’s access can be addressed within defined and reasonable parameter and could also serve as a useful confidence building measure.

23.Iran’s exact long-term intentions for the development of its nuclear programme are unclear. Much is made of a fatwa51 issued by Ayatollah Khamenei declaring nuclear weapons to be haram,52 but its existence and practical implementation are contested, particularly as it does not appear amongst his published rulings.53 Dr Jonathan Spyer noted in his written evidence that “Iran ultimately seeks nuclear weapons as a hegemonic insurance policy to render itself unassailable while continuing the strategy of regional subversion and influence building by force”.54 A collection of 55,000 pages of documents and 183 CDs obtained by Israeli intelligence in 2018 purportedly detail Iran’s active engagement in military nuclear proliferation prior to 2004 and were treated credibly by the IAEA.55 Critics concerned by Iran’s historically covert approach and military designs for its nuclear programme argue that sunset clauses simply push back Iran’s timetable for nuclear weapon development rather than eliminating it as a theoretical possibility.56 Behnam Ben Taleblu noted that when discussing nuclear capabilities, any renegotiation or replacement of the JCPOA should consider such questions as “how much of a nuclear program can Iran have?” or “can Iran have a nuclear program at all?” when negotiating the political as well as practical restraints of sunset clauses.57

24.Given the historically covert nature of Iran’s nuclear programme, the lack of good faith it has shown in supporting the free and timely inspection efforts of the IAEA, and recent evidence indicating the military dimensions to its nuclear efforts of the early 2000s, we find it hard to envisage a time when an Iranian nuclear programme will have widespread support in the region.

25.We agree with the Foreign Secretary that the nuclear deal is imperfect, but Iran’s non-compliance over the last year has indicated what the nuclear proliferation implications of terminating the JCPOA without a viable replacement might be. A more satisfactory arrangement for all signatories is within reach but is not guaranteed. We recommend that the Government takes the lead amongst the E3 in discussions in the New Year with the incoming US Administration on the future of the JCPOA. It should aim to bring all parties back into full compliance and address the concerns of Gulf allies initially overlooked by the JCPOA, specifically;

i)Ballistic missiles capable of delivering nuclear warheads;

ii)Sunset clauses;

iii)Timely and public compliance with International Atomic Energy Agency inspection requests; and

iv)International Atomic Energy Agency inspection of undeclared nuclear sites and material.

The Government should be prepared to work with European and American partners to invoke the snapback of sanctions if full compliance is not achieved.

Renegotiation or replacement?

26.Iran’s destabilising role in the Middle East, particularly its support for Shia proxies and its arsenal of ballistic missiles, has long been of concern amongst states in the Gulf, and within Europe and the US for fear such capabilities could portend development of inter-continental ballistic missiles or further expand its export of terrorism.58 Iran has the largest supply of ballistic missiles in the region with a range of up to 2000 km, bringing parts of Northern and Eastern Africa, Eastern Europe, and most of India into range. Its rationale for developing this stock was summarised as

[…] deterring attacks against Iran, providing warfighting capabilities if deterrence fails or Iran decides to initiate hostilities, supporting military capabilities of regional proxies such as Hezbollah and the Houthis, enhancing national pride and regional influence, and providing a nuclear delivery hedge if Iran decides to acquire nuclear weapons.59

In addition to significant levels of testing, Iran has used ballistic missiles during the Iran-Iraq war, and is believed to have supplied them to its Shia proxies in the region as part of their attacks on Israel, Saudi Arabia, and the United Arab Emirates.60

27.A discussion on ballistic missiles and broader regional security was omitted from the JCPOA, which was underpinned by only a non-binding restriction on development of missiles capable of delivering nuclear warheads.61 The disintegration of the JCPOA since 2018 has led some to explore whether these concerns could instead be adequately addressed through a complete replacement of the nuclear deal. In September 2019, the Foreign Secretary outlined that the UK remained committed to the nuclear deal, but left open the possibility of negotiating improvements, stating that “Ultimately, we need a longer-term framework that provides greater certainty over Iran’s nuclear programme and […] we must also bring Iran’s wider destabilising activities into scope”.62

28.Outlining in September his proposed approach to addressing the issues left as outstanding in the JCPOA, American President-elect Joe Biden stated he would “rejoin the agreement as a starting point for follow-on negotiations” with a long-term goal to “strengthen and extend the nuclear deal’s provisions, while also addressing other issues of concern”.63 A statement which seemingly leaves open the possibility of either a renegotiation or replacement of the JCPOA. The Foreign Secretary similarly told us that the JCPOA “is not a perfect deal” but acknowledged that it should not be shelved until it could be replaced by something better.64

29.Witnesses were divided on whether a wide-ranging successor to the JCPOA was feasible. Some cited concerns that Iran had already rejected such broad talks and instead told us that they favoured separate stand-alone agreements to successively address areas of concern65 and Ellie Geranmayeh noted that a separate stand-alone framework might be better suited to addressing issues of regional security.66 Furthermore, the ratification by the Iranian Majlis of a bill designed to boost enrichment and reduce IAEA access to nuclear sites if US sanctions are not lifted within two months of its implementation adds additional time-pressure to any immediate renegotiation of the JCPOA.67

30.However, an approach seeking to construct separate agreements to respectively address themes such as human rights, regional security or nuclear proliferation was rejected by other witnesses. Behnam Ben Taleblu argued that “sanctions are the primary tool the West has to be able to persuade Tehran to make reforms to its behavior” and that failing to address the broad range of threats posed by Iran comprehensively risked “creating isolated tracks for talks where Tehran can impede or threaten progress on one based on how the other is going”68 and further noted that “failing to include [missile restrictions] in a comprehensive deal would by definition make that new accord not comprehensive”.69 Dr Sanam Vakil agreed that a broader deal incorporating ballistic missiles was preferable, but that Iran would be unlikely to make concessions without similar restraints on neighbouring countries.70

31.Dr Van Engeland noted that the political context in which the JCPOA was negotiated has changed, which might make substantial renegotiation harder to achieve than anticipated.71 The same is also true of the UK’s position in negotiations. However, following an increasingly isolationist US position since 2017 and the UK’s departure from the EU in January 2020, there was an indication from some witnesses that the UK could seek to develop its relationship with Iran through regional alliances rather than solely through the defaults of the E3 and the US. Dr Tabrizi noted that the UK might be able to use multilateral fora, such as the UN or the IAEA, alongside tools such as sanctions and engagement to influence Iran’s behaviour72 and further noted that

[…] the UK should strive to adopt a balanced stance between Iran and the GCC. This would improve its image in Tehran but also increase the chances of a reduction of tensions in the region. The UK is uniquely positioned to leverage its historic links to actors in the GCC, particularly Oman and the UAE, but also Saudi Arabia, and to establish parallel channels of engagement beyond the JCPOA and EU-led discussions.73

32.For some witnesses, broadening alliances within the Gulf Cooperation Council (GCC) seemed a clear opportunity to move the discussion on the nuclear issue, as well as on regional security, forward. Israel’s normalisation of relations with the United Arab Emirates and Bahrain has demonstrated the importance of diplomatic engagement by the US in addressing problems in the region previously deemed intractable. It also indicates that the UK might be well placed to similarly aid the member states of the GCC in addressing their shared concerns over Iran’s behaviour, despite current disagreements over a unified strategy. When we discussed the future of UK foreign policy with His Majesty King Abdullah II of Jordan, he spoke of “the UK’s historic role within the Middle East and the strong links that this has created for the UK in the region” and noted that “UK engagement in the Middle East region […] played a constructive role in seeking to resolve regional challenges”. His Majesty attributed this to the UK’s “unique history and its understanding of the region”.74

33.Alongside a greater focus on alliances in the Gulf, witnesses also noted that the coming months could see an opportunity for the FCDO to utilise the UK’s historical ability to bridge the US and the EU to put itself at the forefront of multilateral discussions on the future of the JCPOA, or the creation of its successor. Dr Vakil noted that there is a “unique opportunity for the UK to take the lead in bringing all parties to the negotiating table” given the UK’s work alongside the E3 and its relationship with the US.75 And Ellie Geranmayeh noted the role the UK could play in the Middle East in the absence of international leadership:

The UK further has an important role to play in de-escalat[ing] tensions in the Middle East, particularly in places such as Iraq and Yemen where the US seems uninterested in taking a leadership role to stabilise these countries. Moreover the UK’s traditional relationship with regional partners like Saudi Arabia means it could play a very useful role in pressing Riyadh and Tehran towards regional security dialogue - again something which the Trump administration is seemingly uninterested in.76

34.Witnesses were broadly in agreement that no groundwork has been laid for a successor to the JCPOA which could address regional security issues alongside concerns over nuclear proliferation. Dr Vakil, although in favour of a broader deal, commented that “There have been no incentives offered to Iran to open the door to negotiations and no serious discussion on what would be offered to Iran for concessions.”77

35.We agree with the Government that its long-term goal should be to replace the JCPOA with a broader agreement which additionally addresses regional security. This must learn the lessons from last time and be held in consultation with our allies in the region, not just in Europe and the US.

36.The UK’s history in the region, and relationship with the member states of the Gulf Cooperation Council, make it uniquely placed amongst the signatories of the JCPOA to build regional and international consensus on how to meet the challenges posed by Iran’s destabilising activity. This should form a core part of any strategy going forward to improve upon the JCPOA.

37.We recommend that, in the aftermath of the Integrated Review, the Foreign Secretary makes a statement to the House to outline specifically what a replacement to the JCPOA should seek to achieve and over what timeframe. In so doing, the Foreign Secretary should address i) exactly what the UK wants to achieve from broader engagement with Iran, ii) which allies can facilitate and complement those discussions, and iii) how such an agreement will fit within the framework of the UK’s long-term strategic goals.