UK-US Trade: Iran Sanctions

Baroness Fairhead Excerpts

Wednesday 16th May 2018 Lords Chamber

[Lord Dubs]

To ask Her Majesty’s Government what advice they have given to British companies about the possible impact on their trade with the United States of the imposition of United States sanctions on Iran.

[The Minister of State, Department for International Trade (Baroness Fairhead)]

My Lords, the UK continues to encourage UK businesses to take advantage of trade opportunities in Iran and the US. The Government have updated their services for doing business in Iran on GOV.UK. The UK remains party to the JCPOA, and the UN-EU sanctions on Iran continue to be lifted to allow UK businesses to operate in Iran. We are working with our European partners to explore potential options for protecting UK and European interests.

[Lord Dubs (Lab)]

I am grateful to the Minister. Will she confirm that the Government will not allow British companies to be bullied by the American Administration, the more so that, if that bullying were to succeed, it would totally undermine the nuclear deal with Iran?

[Baroness Fairhead]

My Lords, the UK is absolutely committed to the JCPOA, the nuclear deal with Iran. We are trying to work with the US to ensure that links with Iran can continue so that the UK and other international parties to the deal are able to allow Iran to get the benefits of the lifting of economic sanctions, so that it can see the benefits of maintaining the nuclear deal. We are also working with Iran, with the E3 and the European External Action Service, to try to work out how we can ensure that Iran sees continued benefit. We are committed to maintaining the deal because we think it is critical for the safety of the world.

[Lord Lamont of Lerwick (Con)]

My Lords, I draw the House’s attention to my entry in the Register of Members’ Interests, both as the Government’s trade envoy to Iran and also as chairman of the British Iranian Chamber of Commerce. Would my noble friend say what she thinks the effects of the change in American policy are going to be on Airbus and Rolls-Royce, which have extensive pending orders in Iran? Secondly, following on the point made by the noble Lord, Lord Dubs, I am reassured by her answer, but did she notice the widely reported statement by the American ambassador to Germany in Berlin? Within hours of President Trump’s announcement that he was changing policy, he said that German firms should start winding down their operations with Iran. Surely it is completely unacceptable for people to give orders to firms that are acting in accordance with the laws of their own country.

[Baroness Fairhead]

My Lords, it is clear that there is extraterritorial reach to some of these sanctions. I cannot say anything but that. We are working with the US to see what we can do to make sure that those trade ties can exist. We are working on a range of measures to try to make sure that we protect UK and other EU interests, working with the E3 and the other parties. I cannot give a direct answer because at the moment we are still working through the options. However, I can say that we are working hard to make sure that those interests are protected. We are also working hard to ensure that it is in Iran’s continued interest to be part of the deal, to ensure that we maintain the JCPOA, which we think is critical.

[Lord Anderson of Swansea (Lab)]

My Lords, surely the blunt truth is that in international trade, the dollar rules. American banks will comply, and the US Administration have totally failed to listen to the representations from President Macron, Chancellor Merkel and our own Foreign Secretary. In those circumstances, would not any lawyers, in the Government or otherwise, urge British firms to be ultra-cautious?

[Baroness Fairhead]

We are actively providing advice through our team on the ground in Iran and through our sector and other teams in DIT. We are trying to make sure that any business that is non-sanctioned is able to flow. We would say that all businesses have to take into account the commercial, legal and financing risks in any transaction, and clearly these sanctions make that difficult. We are trying to work with the US. The noble Lord is right that there was persistent lobbying but the sanctions were still imposed. That is why we are working with our EU colleagues and directly with both the US and the EU to try to protect our businesses and encourage the US to allow us to maintain our economic ties, because we think that they are important.

[Lord Purvis of Tweed (LD)]

My Lords, the Government have lauded the US-UK Trade and Investment Working Group for the progress that has been made in the relationship. Can the Minister confirm that this issue in particular has been raised at the trade working group, because it would be utterly unacceptable for UK businesses to lose US market access for carrying out perfectly legal trading relationships under an international agreement to which the UK as a sovereign entity has signed up? Can she further confirm that the arrangements being put in place potentially to shield banking transactions, which are critical to the City of London, will carry on post Brexit next March?

[Baroness Fairhead]

The conversations we have had with our US colleagues have been very significant. I would say that we do have a deep and strong relationship with the Americans, but when we disagree with them, we say so. There has not been a meeting of the US-UK Trade and Investment Working Group since the sanctions were imposed, so there has been no opportunity for discussion through that group. However, we are making representations through my right honourable friends the Prime Minister, the Foreign Secretary and the Chancellor and we are ensuring that those points are being heard. On banking, post Brexit, we are clearly trying to ensure that we have as fluid a border as possible, so we are trying to make sure that our financial services industry, which is critical to the economy and the country, is protected as much as possible.