Lords consideration of the Iran (Sanctions) Regulations 2023 - Jan 23

Iran (Sanctions) Regulations 2023

Moved by

Lord Benyon

That the Grand Committee do consider the Iran (Sanctions) Regulations 2023.

The Minister of State, Department for Environment, Food and Rural Affairs, and Foreign, Commonwealth and Development Office (Lord Benyon) (Con)

My Lords, this instrument contains measures to deter the Government of Iran, and groups backed by Iran, from conducting hostile activity against the UK and our partners. It was laid on 13 December 2023 under powers in the Sanctions and Anti-Money Laundering Act 2018. The measures entered into force the following day. The instrument has been considered and not reported by the Joint Committee on Statutory Instruments.

The Iranian regime poses a clear threat to the UK and our partners, with hostile acts ranging from assassination plots to significant support for armed groups. The new legislation provides sanctions powers to respond to this appalling behaviour. We can now introduce sanctions designations in relation to Iran’s hostile actions in any country. It could be used in response to Iranian support to Russia, destabilising conduct in the Middle East or hostile acts in any partner country. We can use these powers where acts are perpetrated by Iran or by armed groups backed by Iran.

Since January 2022, the UK has identified at least 15 threats emanating from Iran to the lives of UK-based individuals. This is totally unacceptable. Furthermore, Iran continues to destabilise the Middle East through its development and use of weapons, along with support for groups such as Hamas, Hezbollah and the Houthis.

Our priority is the safety and security of the UK, the people who live here and our international partners. That is why we have taken action, using this legislation, to sanction the head of the Islamic Revolutionary Guard Corps Quds Force, Esmail Qaani, and other senior IRGC figures involved in Iran’s long-term support to Hamas and Palestinian Islamic Jihad. We will not stop there. For as long as Iran continues to threaten the UK, our interests and our partners, we will respond firmly and decisively. We will use this legislation as a key tool within the broader diplomatic approach aimed at deterring Iran.

Sanctions are particularly effective when imposed alongside international partners and combined with other diplomatic tools. For example, following the murder of Mahsa Amini, a 22 year-old Iranian woman, we sought to expose the extent of Iran’s abuses on the international stage, including at the UN Human Rights Council. This was accompanied by regular sanctions designations co-ordinated with partners including the EU, the US and Canada. We delivered a clear message of international condemnation while holding those responsible for human rights abuses to account through sanctions.

I turn now to trade measures, the other substantive addition made by this legislation. Iran continues to expand its drones programme and is sending them to Russia to use against Ukraine. We have already sanctioned a range of entities and individuals involved in the provision of Iranian drones to Russia, using the existing Russia sanctions regime. However, drones are also a feature of Iran’s hostile activity beyond Ukraine. This legislation imposes new restrictions on the Iranian regime’s drone programme, targeting UAVs and their components, which is crucial to its collaboration with Russia. It draws on knowledge of the Iranian drones deployed in Ukraine and elsewhere. The trade restrictions strengthen our existing export controls on drone components, ensuring that no UK business or person, wherever they are in the world, can facilitate the trade of these items.

This legislation also maintains existing trade measures on goods and technology that might be used for internal repression, such as riot shields and water cannons, and on goods, technology and services that may be used for interception and monitoring. This will ensure that the UK plays no part in enabling the Iranian regime’s trampling of human rights. We strongly support the right of the Iranian people to freedom of expression and assembly.

The legislation maintains our unwavering support for human rights in Iran. The regime continues to treat women and human rights defenders with contempt, executing eight people in 2023 for their participation in the “Woman, Life, Freedom” movement. The recent death of Armita Geravand, a 17 year-old Iranian girl, after an alleged assault by the morality police shows the brutal reality of life for women and girls in Iran. Since October 2022, we have sanctioned 95 individuals and entities responsible for violating human rights in Iran. The Iran (Sanctions) (Human Rights) (EU Exit) Regulations have been revoked and designations made under those regulations are saved under the new regulations, allowing us to continue to hold the people and institutions responsible to account.

These new regulations demonstrate our determination to target those responsible for Iran’s malign activity. They maintain our commitment to human rights law, allowing us to hold to account those in Iran who fail to uphold and respect them. We will continue to work with like-minded partners to disrupt, deter and respond to threats from the Iranian regime and co-ordinate sanctions action. These regulations send a clear message to the Government of Iran and those who seek to harm the UK and our partners. I beg to move.

Lord Purvis of Tweed (LD)

My Lords, these measures go beyond the human rights sanctions already in place, as the Minister has said, and are now much broader in their scope and, potentially, their depth. They address Iran’s regrettably growing internal oppression and external aggression. I support the measures and am grateful to the Minister for the clear way that he introduced them.

The noble Lord, Lord Collins, and I have debated Iran on a number of occasions in Grand Committee and the Chamber. The fact that its activities at home and abroad warrant debates in this House is testimony that the United Kingdom has considerable interest in ensuring the safety of our nationals, both at home in the UK and abroad, as well as that of our allies. It is regrettable that these measures need to be in place. As they are broader, deeper and country-wide and could set precedents for other areas, it is right that they be scrutinised. I wish to ask the Minister a number of questions. I fully understand if he cannot answer them today but I would be grateful if he could write to me.

As the Minister said, the context of the repression is the reprehensible persecution and oppression of women and young women in Iran by both the morality police and the judiciary, which cannot be considered free and independent. I would be grateful if he could outline the interaction between those bodies that are now open to sanctions within the police and the revolutionary guard and, as human rights measures are to be put in place, their interaction with members of the judiciary. We have seen all too frequently in Russia and Belarus how judiciaries are now completely captured by regimes and are not independent arms. Can the Minister clarify whether members of the judiciary will also be covered by these measures?

I asked a broader question at the outset about women and girls. I have raised the point repeatedly in the Chamber and to the noble Lord, Lord Ahmad. There had been opportunities for those persecuted to seek refuge in the UK through asylum routes, but there is now no longer a safe and legal route for migration to the UK for Iranian women seeking asylum. This was highlighted in a Home Office report just a number of days ago. Can the Minister write to me about what safe and legal routes exist beyond that offered by UNHCR, which is not a comparable direct route?

We know that Iran often operates not alone but with other countries, through proxies or with other state entities. The Minister was clear that these sanctions will cover Iran’s activities in other countries. What are the consequences for those countries facilitating them? What sanctions can be applied to those bodies that effectively provide proxy support?

4.45pm

Turning to the measures themselves, I note that a condition that needs to be met for sanctions to be put in place is the Secretary of State herself—or the United States, the European Union, Australia or Canada—having put in place relevant provisions. I would be grateful if the Minister could write to me—I do not expect him to answer today—on the sanctions regimes in those countries that are comparable to the UK. Both the noble Lord, Lord Collins, and I have often asked questions about why, for example, the European Union has put measures in but the UK has not, or whether Canada has put in measures while the UK has not. The noble Lord, Lord Ahmad, has repeatedly said that they operate under their own sovereign sanctions regimes; that is absolutely the case, and I am not disputing that fact, but now, as I read it, we have an automatic triggering for sanctions under condition B. I would be grateful if the respective comparable sanctions regimes that would allow the UK to trigger could be laid out. I say at the outset that I am not opposed to this but just seeking clarity.

I turn to those associated with a person who could be sanctioned under these regimes, including those with a financial benefit or other material benefit from the person. The Minister will know well enough that the UK has had an issue with facilitators in both the legal services and the consultancy services. I would be grateful if the Government consider that a person “associated with” a sanctioned person would cover a UK legal representative. Regrettably, there have been times when legal services have been used for malicious purposes—we have debated those cases—and I would like to be reassured that there are no loopholes with regard to that.

I will jump to Regulation 60, on treasury licences. The Minister may recall that one difficult issue was Treasury licences being offered for legal services to be deployed for a sanctioned individual to effectively offer a malicious legal case. I would be grateful if the Minister could confirm that there will be no loophole for legal services and Treasury licences.

On assets overall and asset freezes, this is welcome, but I would be grateful if the Minister could state whether the sanctions applied to asset freezes for individuals who would be sanctioned under these regimes —Iranian officials—can be extended to the joint assets that Iran will have, connected either to other states or to proxy finance. As I indicated, the Minister knows all too well that Iran does not operate solely in many of the activities he outlined. Often, it is through proxy organisations or in some form of partnership with other groups, whether it be proxies for the Putin regime or others. I campaigned for and welcomed very warmly the Government proscribing the Wagner Group, for example, which is an illustration of how non-government bodies can effectively carry out operations on behalf of Iran. We will come on to talk about the sanctions regime with regards to Russia, and diamonds, gold and oil, and this is an area where Iran has been very active.

My final question relates to shipping and the naval aspect, which is topical at the moment, given the Statement that will be repeated tomorrow on the actions against the Houthis. As I understand it, the sanctions will allow for someone, a body or a particular vessel to be designated so that they will not have access to UK ports of entry. This is under Regulation 55. I seek clarity on British Overseas Territories. My reading of this is that the sanctions will provide exceptions to entries by those sanctioned into overseas territory ports. I hope I am not correct about that being exempted. I hope it is not the case that a sanctioned vessel would be prohibited from landing at a British port but would be able to land at a British Overseas Territory port. Again, I hope I am not correct, so I seek clarification on that.

The Government have indicated that they do not consider a review clause in this instrument appropriate. I gently differ slightly with them, because, as I said, this is a broad set of sanctions and there could well be consequences. I understand that it is absolutely in the Government’s power to remove or bring forward amendments to sanctions if they consider it appropriate, but a review mechanism would be helpful; if the intent is to change the behaviour and practices of a sovereign state, knowing the impact and effectiveness of that—and sharing it with Parliament—will be important. Although the Government have said that they do not believe that a review clause in the instrument is appropriate, I hope Ministers will be free to brief Members, either privately or publicly in the House, on the impact and effectiveness of these measures.

With those questions, I support the measures.

Lord Collins of Highbury (Lab)

My Lords, when the Foreign Secretary made the announcement on these sanctions, we had an opportunity to repeat his Statement in the House. I do not really want to repeat everything that I said then.
We very much welcome these actions, in particular the co-operation with other states. I totally agree that, for sanctions to be effective, we must work in conjunction with others—certainly the US, Australia, New Zealand, Canada and the EU. I have no problems with that. However, at the time, I asked that we not limit ourselves to those countries. I asked the noble Lord, Lord Ahmad, what we are doing to ensure that we get broader co-operation on these sanctions, not least with some of the Commonwealth members that could have an impact here.

As the noble Lord, Lord Purvis, indicated, we have discussed and raised the human rights abuses mentioned by the Minister. One area that we are particularly concerned about is the attacks on freedom of speech and the operation of journalists, not least the impact of this on the BBC World Service and the people who work for it—including the threats that have been applied to the families of BBC World Service employees. It would be good if the Minister could mention that—in particular the activities of this rogue state in threatening our citizens, not only abroad but here—in relation to how we will co-operate across Whitehall in addressing these issues. It is important for us to be reassured on that point.

We very much welcome the regulations and their broad nature. We are certainly committed to supporting any efforts to contain Iran and counter its efforts to sponsor terrorism across the globe, not least in supporting the Houthi terrorists operating in Yemen.

There is another question. I will not repeat the questions asked by the noble Lord, Lord Purvis—particularly on the operation of licences, which we have raised before. I totally understand why the conventions that we are signed up to permit that but it would be good to have a detailed explanation. However, one thing I have raised is this: while it is one thing to designate sanctions and agree with other countries about designating them, they must be effective. What I mean is, what are we doing to ensure that we can see the evidence that the Government are actually prosecuting sanctions evasions? People may not realise that there are consequences for evading the sanctions but may face severe consequences, so I would be particularly keen to hear how we are supporting actions to chase people who evade or seek to evade sanctions, or even offer services to facilitate their evasion. These are really important areas.

Of course, we then have the issue of the sunset sanctions from the JCPOA. What are we doing there? These regulations are part of that but what are we doing to beef up some of the designations of Iranian targets? It would be really important to understand that. With those brief comments, I reiterate our support for these regulations, as we did in December.

Lord Benyon (Con)

I thank both noble Lords for their questions and their support for this measure. I want to address the important issues that they raised.

The noble Lord, Lord Purvis, asked about the judiciary. He is absolutely right that the judiciary in Iran is not independent. It is an agent of the state and its members are part of the architecture of that state, which has caused some of the grossest human rights abuses. They are available to be sanctioned. We have sanctioned members of that judiciary and will continue to do so as and when we get evidence to support doing that. He also asked about safe and legal routes. We are always looking at this issue. It is obviously a responsibility of the Home Office, with which we work closely; we also work internationally to make sure that safe and legal routes exist. I am very happy to give the noble Lord a more detailed briefing on that.

The noble Lord is absolutely right about the proxies and other states, individuals and companies through which the Iranian Government operate. We work with the EU, as well as with our partners in the US, Canada and many other countries, to try to ensure that a comprehensive regime exists. The Secretary of State can take urgent action under our sanctions regime to replicate sanctions that are implemented by the US and Canada. We will certainly take that action as soon as it is required, and can do so at great speed. Very often, the information comes out in relation to a particular incident or individual, and sometimes that requires speedy action. The Foreign Secretary and the Government are happy to move quickly on that and keep noble Lords informed about what we are doing.

The issue of facilitators is perhaps more relevant to the next SI but it is absolutely right that the noble Lord raised it. Unlike Iran, we are a free country with independent institutions, such as the judiciary. However despicable an individual’s acts, whether the crime is a murder or whether, in a case such as this, an individual feels that they have been wrongly sanctioned, they must have the ability to be supported by the legal system. No one argues with that; where we have a problem is with some people who have made a lot of money out of dirty money coming into the UK. We want to ensure that they are given the full glare of publicity and are understood to have been part of the problem.

5.00pm

The noble Lord, Lord Purvis, rightly talked about malicious legal cases, which can have a huge impact on the taxpayer and delay the system under which we have operated, particularly on asset freezes. This can be more complicated if a country such as Iran is using proxy organisations, of course, but we remain absolutely determined to shine a light on any state or individual actor being used by Iran to avoid sanctions. We will make sure that those matters are kept under constant review.

I note the noble Lord’s point about shipping. He is absolutely right that there is no point in denying a ship access to our waters and ports if they can just go to a near neighbour. That is why we work extremely closely with the International Maritime Organization and others to try to make sure that we have a universal system that is accepted across the world.

We have sanctioned more than 400 Iranian individuals and entities, including the IRGC in its entirety, in response to the regime’s human rights violations, nuclear escalation and terrorism. Since the protests began in October, we have sanctioned 204 individuals and entities, including 54 linked to the IRGC. Our sanctions against Iran account for a significant proportion of our sanctions work across the department.

The noble Lord, Lord Collins, talked about broader co-operation. This is a matter of great priority for the G7, which is doing great work in looking at asset seizures and making sure that we have both a comprehensive regime across our allies and actions that work in lockstep with those countries.

It has rightly been said that all areas of responsibility of the British Government must be part of this. The UK sanctions regime applies in all UK overseas territories and Crown dependencies, either by Orders in Council or through each jurisdiction’s own legislation. The United Kingdom, the Crown dependencies and the overseas territories stand united in condemning the Russian Government’s aggression and the behaviour of the Iranian Government, and are working in lockstep with us to enforce UK sanctions, including freezing over $9 billion of assets. Each territory’s Government are responsible for the implementation and enforcement of sanctions within their territory. We and the Office of Financial Sanctions Implementation provide technical support through the targeted use of EDI funds to build capacity and strengthen sanctions enforcement with other restrictions.

Both noble Lords talked about how we are judging and reviewing this mechanism and making sure that we are creating a transparent system that holds us to account. The creation of the Office of Trade Sanctions Implementation was announced on 11 December. This new unit will strengthen the implementation and enforcement of our trade sanctions and ensure that UK sanctions are as impactful as possible. We will also legislate to give the OTSI a toolkit of civil enforcement powers, including the ability to levy civil monetary penalties, similar to the powers of the Office of Financial Sanctions Implementation. These new civil enforcement powers will complement HMRC’s existing criminal enforcement powers in relation to trade sanctions. The OTSI will become fully operational this year, once it has its new legal powers, and more information on timing will be available in due course.

We have listened closely to the concerns of industry, particularly in the light of Ukraine. We want to support and foster better understanding and compliance with the UK’s trade sanctions. I think that covers most of the questions.

Lord Purvis of Tweed (LD)

I thank the Minister; he has been very generous in responding to our points. I am still a little unclear with regard to the issue of Crown dependencies and the overseas territories when it comes to some of the shipping aspects. I would be happy for the Minister to write to me about this. I hope that I am not correct that, while a sanctioned individual and, therefore, vessel, would be prohibited from landing in UK waters, it would be able to land in the waters of overseas territories or Crown dependencies. This would be very attractive to that potential vessel, especially to individuals or an individual’s vessels. As I said, I would be happy if the Minister could write to me to clarify that point as I was not entirely sure of his response.

Lord Benyon (Con)

I entirely accept the noble Lord’s point. I want to give myself the clear comfort that he seeks. It is not the case that a vessel or an individual not allowed into United Kingdom waters or ports, or to receive refuge in any form, can then go to a Crown dependency or overseas territory and get access. What I hope I said was that these measures cover all our overseas territories and Crown dependencies. However, I will write to him because I want to make absolutely certain that we are being clear.

I have been seeking inspiration for that reply and have now received a note; I may be able to avoid writing him a letter. There is an overseas territory order that applies on legislation. The UK sanctions regime applies in all United Kingdom overseas territories and Crown dependencies. I think I have just saved a stamp.

Lord Purvis of Tweed (LD)

I am grateful to the Minister. However, I think that the exemption would be an exemption from that order because it is an exemption under this order. If there is an exception for authorised conduct in a relevant country and the relevant country is the Channel Islands, the Isle of Man or a British Overseas Territory, I do not know the interaction between the exception that we are approving under this when it comes to the overall application of UK sanctions to the overseas territories. I understand that the overseas territories have that application owing to that other instrument but this is an exception to that.

Lord Benyon (Con)

I understand the noble Lord’s concerns. I am informed that he need not worry but I want to make sure that he does not worry; I will therefore put it in a letter to him.

These measures represent a step forward in our capability to respond to hostile Iranian activity and keep our people safe. The UK Government are committed to using sanctions to hold the Iranian regime to account for its malign activity, both in the UK and elsewhere.

Motion agreed.