Countering Iran’s Hostile Activities

Iain Duncan Smith Excerpts

Wednesday 8th May 2024 Westminster Hall

[Dame Margaret Hodge (Barking) (Lab)]

I beg to move,

That this House has considered the matter of countering hostile activities by Iran.

It is a pleasure to speak under your chairship, Mr Henderson. I am particularly grateful to the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) for co-sponsoring the debate. My thanks also go to Redress and Labour Friends of Israel for the briefings that they have provided. Our focus is on the active role that Britain is wittingly or unwittingly playing in supporting Iran and its agents as they pursue their violent, repressive and hostile activities here in the UK and across the world. We have some practical asks of the Government, to which I hope the Minister will respond when she replies to the debate.

It is now almost a month since we woke up to the news that Iran had launched 300 drones and missiles at Israel, following Israel’s attack on the Islamic Revolutionary Guard Corps leaders in Damascus. That was the first direct attack by Iranians on Israel’s soil in the horrendous conflict that is taking place in the middle east, but it sits within a wider context of the threat that Iran poses not just to Israel, but to Britain and to our western allies. Iran is listed alongside Russia and China by our security services as a hostile state, and yet, in the words of the commissioner at the Commission for Countering Extremism, Robin Simcox,

“what is underappreciated is the scale of Iranian-backed activity in this country; and the extent to which Iran attempts to stoke extremism here.”

Mostly, Iran works through its agents. At their heart is the IRGC, Iran’s Islamic Revolutionary Guard Corps. We all remember the protests in Iran following the death in custody of 22-year-old Mahsa Amini, arrested simply for refusing to wear a hijab. The widespread protests that followed her death, with women removing their headscarves and chanting, “Women, life, freedom”, were violently crushed by the IRGC. More than 500 protesters were killed, more than 19,400 individuals were arrested and at least 27 protesters have been given a death sentence, of whom seven have been executed.

In Iran, the IRGC is renowned for its brutality and violence, for undermining human rights and democracy, and for being a terrorist paramilitary organisation that acts as the ideological custodian of the Islamic Republic. But its influence extends to Britain and to our allies. Since the fatwa against Salman Rushdie in 1989, the IRGC has targeted British nationals and Iranian opposition activists living in exile here on our soil. In 2022, the head of MI5, Ken McCallum, warned that Iran’s intelligence services had made at least 15 credible threats to kidnap or even kill individuals living here in Britain. Such actions pose a significant threat to our national security.

Attacks on journalists who seek to hold the Iranian regime to public account are particularly horrific. Those journalists have been described by Iran as “enemies of the state”. We had the terrifying attack on Pouria Zeraati, who worked as a journalist for Iran International, a Persian-language opposition TV channel, and was stabbed in the leg outside his home in Wimbledon. We learned about the threat and harassment meted out to BBC journalists working for BBC Persian. For example, Rana Rahimpour, who worked for the BBC for 15 years, had her car broken into, a listening device installed in it and her phone tapped, and the conversations were misleadingly edited and broadcast in Iran to suggest that she supported the regime. That led to attacks on her from those who oppose the regime. In the end, she quit her job because of the pressure on her and her family, saying:

“They don’t want fair, trusted or impartial news to reach the shores of my homeland.”

A recent report by Reporters Without Borders says that London has become a “hot spot” for transnational repression. Iran also seeks to influence public opinion by spreading propaganda. There are concerning ties between the IRGC and local Islamic centres in cities such London, Manchester and Glasgow. According to Policy Exchange, the Islamic Centre of England, which is located in a converted cinema in Maida Vale, is the centre of Iranian influences in the UK. The head of the centre is directly appointed by Ayatollah Khamenei. Senior clerical figures travelled freely from Iran to the centre in the UK to voice their repressive ideology, while at the same time Nazanin Zaghari-Ratcliffe was languishing in a prison in Iran.

Similarly, the Kanoon Towhid Islamic centre in west London is used as a meeting place for the Islamic Students Association of Britain. There, IRCG commanders lecture students on the evils of Israel and its western allies. “Death to Israel,” proclaimed one IRCG commander, who also claimed the holocaust was

“a lie and a fake”.

Another claimed that they are engaged in

“an apocalyptic war that will end the lives of Jews”.

All that is going on within our shores, in our communities and places of worship in Britain. That is just a small part of the nefarious activities in which Iran is engaged, which also include providing weapons to Russia in Ukraine, and to Hezbollah, Hamas and the Houthis in the middle east. Even worse, our financial institutions are facilitating Iran’s wrongdoing.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

The right hon. Lady is making an excellent speech to which I am listening carefully. I would press slightly on one other issue. It is quite clear, through links that I will set out later, that the Hamas attacks were organised by the IRGC. That came at a time when Russia had been under pressure in Ukraine. Iran has links to the Russians and this has taken the pressure off them, as most of the focus has gone to Gaza. Does the right hon. Lady agree that, on a wider front, this is an absolute threat to us all?

[Dame Margaret Hodge]

I absolutely take that point. My attempts to condense everything I wanted to say in the time available did not allow me to give more time to that very important link.

Our financial institutions are helping Iran and its agents to pursue their evil objectives. Two banks—Bank Saderat and Melli Bank—sanctioned by the USA for supporting the IRGC and other military-related activities, have active subsidiaries in London. They operate out of the heart of London in Lothbury and Kensington High Street, funnelling funds from Iran to the state-controlled agencies in the UK.

In February, the Financial Times revealed that two of the UK’s largest banks—Santander and Lloyd’s—had provided accounts for firms connected to Iran’s state-controlled Petrochemical Commercial Company. US officials believe that that company has funnelled hundreds of millions of dollars to the IRGC, and that it has worked with Russian intelligence agencies to raise money for the Iranian proxy militia. Money in the hands of rogue states and terrorists is a deadly weapon. There is a real risk of the UK becoming a safe haven for Iranian perpetrators of human rights violations and international crimes. Those bad actors must not be permitted to seek shelter, threaten UK citizens and residents or accumulate funds and other resources to support their actions.

I am afraid that our response so far does not match the scale of the threat we face. We are working with our allies to counter Iran’s hostile activities, but the Government must do more at home to target both the IRGC and its enablers. There are three key levers that I urge the Minister to consider. First, I call on the Government to act firmly and proscribe the IRGC as a terrorist group. Action against what is clearly a hostile state-sponsored threat is long overdue.

Secondly, the Government must ramp up their efforts to impose sanctions on the members of the IRGC. I recognise that significant strides have been made in sanctioning the IRGC as an entity and several of its commanders. Indeed, the Government’s new Iran sanctions regime gives us the enhanced powers we need to target those involved in supporting the Iranian regime’s human rights violations across the world. That includes those who finance or are associated with Iran’s hostile activities, as well as any entities involved in the production and export of Iranian weapons. Imposing sanctions on IRGC agents, or other associated entities, would allow us to freeze their UK assets, deport those without UK citizenship, and prevent any UK persons from dealing with them. We must make full use of those powers and target a far broader range of agents, including networks of individuals and companies associated with the IRGC.

Thirdly, we must ensure full transparency over who owns or controls UK companies, properties and trusts so that all the assets and individuals associated with the IRGC can be appropriately referred to the enforcement authorities. Any UK companies or individuals dealing with the Iranian Government or the IRGC, by facilitating transactions on their behalf or by supplying them with military equipment or other resources, is likely to be in breach of the existing UK sanctions regime. Entities regulated by the UK’s Financial Conduct Authority, such as Bank Saderat and Melli Bank, could be referred to the FCA for failures in their sanctions screening and failures in customer due diligence checks.

Those measures would send a message to Iran, to the IRGC, and to other hostile state-sponsored threats: the UK will not serve as a conduit for the financing of conflict and terror. The UK will not stand by as foreign agents intimidate and threaten people on our soil. Finally, the UK will not stand as a safe haven for perpetrators of human rights violations and international crimes.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

It is always a privilege to speak with you in the Chair, Mr Henderson. I start by congratulating the right hon. Member for Barking (Dame Margaret Hodge) —my right hon. Friend, in this particular case—on her powerful and important speech. Today is about trying to recognise that there is a moment when attempts to be reasonable and engage in a normal, diplomatic and democratic way finally fail because the people we are trying to deal with are themselves utterly opposed to all of that. Today’s debate should take into consideration all that has happened and all that has gone before.

I want to make a point very quickly before I get into the issue of the IRGC’s work in the UK. As the right hon. Lady said earlier, we must recognise Iran’s appalling behaviour to its own citizens in recent years, such as that towards campaigners following the appalling murder that took place over the wearing of a headscarf or hijab, which has literally been pushed on people against their will. That has subsequently become a sort of democracy campaign. As the right hon. Lady said, thousands have been arrested and many have been tortured, and we know that a significant number have been executed for that simple display—for something that we, in a normal society, would consider to be the expression of their human rights to change events. I reference that as a backstop, because we are dealing with a regime that brooks absolutely no dissent and no discussion with anybody in Iran, except for with those who are part of its brutal Administration. The sight of those people being arrested and rounded up, never to be heard of again—this, by the way, under the cover of all that is going on in Gaza at the moment—has accelerated the internal process of repression, and of execution and torture.

I return to the essence of the debate, which is looking at the Iranian Revolutionary Guard Corps, and how they work and proselytise here in the UK. That should be of considerable concern to us and should result in a change of policy. Beyond immediate threats to UK residents and their family members in Iran, recent media reports show that Iran is using UK-based institutions to spread propaganda and assert its influence. We have already touched on that point, but it bears emphasising.

In November 2023, The Times reported:

“Supporters of the Iranian regime have attended pro-Palestine marches in London, handing out leaflets citing the supreme leader’s calls”—

the calls of Ayatollah Khamenei—

“for the eradication of Israel.”

The regime has never been other than utterly clear that it sees Israel, and Jews, as legitimate targets because it considers them to be appalling and therefore it wants to rid the world of them. He has been very clear about it and everybody else has been very clear about it—and there is his support of Hezbollah and Hamas.

Hezbollah’s leader, in response to Iran, has also clarified the chant, “From the river to the sea.” I have heard some people say, “Well, that just means freeing oppressed peoples.” It is not that; it means clearing Israel—the Jews—out of Palestine completely. That message is, in those people’s minds, absolute, so when others chant it, they need to recognise that that is essentially what they are saying. That is all to do with the propaganda used by the IRGC here in the UK.

As was mentioned earlier, there are concerns over links between the Islamic Centre of England in London, Manchester and Glasgow, and Iran’s IRGC and the office of the Supreme Leader. As the right hon. Member for Barking pointed out, the head of the IRGC is appointed by the Ayatollah Khamenei himself, and therefore it is always going to be somebody who is completely on side with the IRGC and the authorities in Iran.

All the other entities exist within the Islamic Centre’s network, reportedly including the Islamic Students Association of Britain, based in Hammersmith, which is owned by Al-Tawheed Charitable Trust. In August 2023, it was reported that the students association held online meetings where IRGC commanders had addressed students. We have seen videos, including some on the BBC, where people have been clearly lecturing while using the language that the right hon. Lady cited—about death to Jews and the eradication of Israel—and whipping up meetings to become more extreme than they might have been without such interventions. That should be a matter of real concern to my colleagues in Her Majesty’s Government; they should be concerned that, at a time when the whole political atmosphere with regards to the middle east is so fraught, we see these people trying to pitch others in a singular direction—a violent one, at that.

The BBC report in 2024 into the students association named former IRGC commander, Ezzatollah Zarghami—who is sanctioned in the UK, by the way—as having been advertised as speaking to the student group. It was interesting that the BBC concluded that the students association, along with the Kanoon Towhid centre, had been used as platforms by IRGC agents in the UK to promote extremist antisemitic propaganda and incite violence against dissidents from the regime.

I want to come to the links with the City, which the right hon. Lady touched on, but I first want to say something very important. There is a distinct difference between sanctioning—the Government always say they sanction individuals—and proscribing, which means that if anybody here in the UK is involved in that organisation, they will be committing a criminal offence. Sanctioning is all well and good as far as it goes, but there are many people who operate, never get spotted and do not get sanctioned. The point of proscribing is to catch those who are busy fomenting violence and antisemitic tropes.

Rather than taking forceful action against the Islamic Republic and its associates, the UK Government seem content to allow those responsible for providing financial support for the activities of Iranian entities to operate freely in the UK. We have already cracked down on a number of banks and individuals as a result of the brutal Russian invasion of Ukraine—there is more to be done there, by the way. We should have learnt a lesson by now. We were far too open in that regard, and remain too open when it comes to Iran.

We have long known that the Saderat and Melli banks—Iranian commercial banks subject to US sanctions for supporting Iran’s IRGC and other military-related Iranian entities—have active subsidiaries, as mentioned earlier, in London. In October 2023 it was reported that both banks maintain links to Hamas and the IRGC’s Quds Force. They are operating here in London. I cannot stress that enough. In plain view, in open sight, we have Iranian banks providing money to those who wish nothing but harm to Jews here in the UK, to any representative of Israel, to the UK state itself and all those here in Parliament who believe in human rights and the rule of law. That is what is getting financed.

The state-owned National Iranian Oil Company, which was sanctioned in the US, is an affiliate of the IRGC and was in a building opposite us here. The UK financial services sector has also reported the failure to enforce UK financial sanctions on Iran. According to a February 2024 report by the Financial Times, Lloyds Bank and Santander UK participated in a sanctions evasion scheme backed by Tehran’s intelligence services. That is absolutely astonishing. The banks are accused of providing accounts to British front companies secretly owned by a sanctioned Iranian petrochemical company based near Buckingham Palace, which the US believes has raised hundreds of millions of dollars for the IRGC Quds Force, working with Russian intelligence agencies to raise money for Iranian proxy militias.

The UK, together with its partners, must consider all forms of pressure, including targeted financial sanctions, to challenge Iran’s hostile activities in the UK and abroad. If no such action is taken, I am sorry to say that the UK Government risk not only undermining the reputation of the City of London, but signalling to Iranian communities worldwide that the Government prioritise economic interests over safety and security. I do not believe that that is a principle running through the Government, but when it comes to Iran we have only to read what is happening to reach that conclusion. I hope that the Minister will explain to us how swiftly we are going to bring that to an end and change any sense that the UK Government care more about money than about lives.

Iran is a key ally of Putin and Russia. I have long believed—I made a speech in Washington about this quite recently—that we are watching a new axis of totalitarian states growing right in front of us. China is at the heart of it along with North Korea and Russia, and right in the middle of it is Iran. You can see the co-ordinated activity. Iran, as I said earlier in an intervention, is implicated in the co-ordinated attack by Hamas, which engendered a response resulting in the US focus being on that area, and not on Ukraine as it was before. That has led to a cooling off that mean Russia was able to go on the offensive, and it is looking very difficult for Ukraine. We can see that all of that has helped the axis. Right now we are watching Iran do all of that and still carry on here in the UK without hindrance.

Economically, Iran has the most robust sanctions evasion network, constantly cultivated over decades. What is of particular interest is Iran’s ability to export petrochemicals through its dark tanker fleet and various shell organisations. Of course, that is hugely helpful to Russia, providing it with the wherewithal to buy many of the weapons that it needs.

Staggeringly, the total value of trade between Russia and Iran increased from $1.4 billion in 2020 to more than $3 billion in 2021. Over the summer of 2022, Tehran and Moscow held talks about using Iran as a backdoor for Russian oil. A 2022 cache of transaction data between Iranian clearing houses and foreign-registered front companies controlled by the regime, reviewed by Politico, suggests quite clearly that the volume of sanctions-evading transactions handled by the network is at least in the tens of billions of dollars annually—tens of billions of dollars! That money is going to support the whole concept of war in Ukraine, to the fomenting of appalling terrorist groups in the middle east, and to the long reach of Iran through countries such as Syria and beyond.

Militarily, Iran also provides the key support for Russia. We know that—Iran’s diverse drone and loitering munitions fleet has become integral to Russian strategy. Russia uses Iranian loitering munitions to bombard Ukrainian infrastructure and civilians. Iran has also sent technical advisers, who again are likely to come from the IRGC force, to train Russian operatives in Crimea. In addition, Iran provided Russia with 300,000 artillery shells and 1 million ammunition rounds between November 2022 and July 2023.

We can draw breath for a second, because it isn’t over. The reality is that that is the scale of it so far, and it just gets a lot worse. We now know that Iran will expand its support for Russia’s war in Ukraine to an even greater extent. Having already transferred drones to Russia, Iran is likely soon to begin transfers to the Kremlin of advanced ballistic missiles. In October 2023, under the joint comprehensive plan of action, or JCPOA, sanctions on Iran’s ballistic missile exports will lapse, making such transfers legal under international law. Again, I ask my hon. Friend the Minister to deal with that issue when she responds to the debate.

Iran’s nuclear advancement and its military assistance to Russia increase the odds that President Putin, with the right incentives, will seek advantage in assisting Iran with nuclear breakout, transferring advanced military technology and supporting Iranian intelligence activity in Europe and the UK. We know what Iran is planning to do. We know that it is planning to have nuclear weapons; it is only a matter of when. It links with Russia will provide it with much of the technology that it needs, such as miniaturisation to allow nuclear weapons to be put on missiles. Such technologies are more often held in the developed nations that have nuclear weapons themselves, but these sorts of things are more open to Iran now. They can use them and we believe that that is very much the case.

I have talked about the new axis. As a long-standing ally of China, Iranian-Chinese trade has skyrocketed since the start of the Ukrainian war, as China takes advantage of illicit Iranian and trans-shipped Russian oil. Rebadged, that oil is going to China; they cannot buy enough of it. China has also expanded its economic footprint in Iran and its strategic footprint in east Africa. Interestingly, China imported 89% of Iranian oil in February 2024. Iran ships oil to China using dark-fleet tankers and receives payments through small Chinese banks. The dark-fleet tankers operate without transponders to avoid detection. Once oil shipments reach China, they are rebranded as Malaysian or middle eastern oil, and bought by small, independent refineries in China.

[Jim Shannon (Strangford) (DUP)]

Just this week in the press, I noticed a story that suggested that some of the dark oil that the right hon. Gentleman referred to is being shipped in unsafe boats and ships; they leak, they have engine problems and so on. That particular type of movement of oil is dangerous not only because of the finance it generates but because it is environmentally dangerous for the rest of the world.

[Sir Iain Duncan Smith]

I agree with the hon. Gentleman about that, but I have to tell him that this is going on all the time. All the points he made are correct, but the reality is that the oil is still going there, and I do not see any action at all being taken by the western powers to stop it. Perhaps they are fearful of upsetting China, but that is another issue altogether, by which I will not be sidetracked; this debate is not about that, but it is certainly a key element in why we seem not to do a huge amount to stop these things.

It is also worth pointing out that, in 2022, Iran bought $2.12 billion-worth of machinery from China, as well as $1.43 billion-worth of electronics. That tight exchange between these totalitarian states is being cemented and expanded as we speak. We also know that China’s involvement in many countries across the middle east, many of which are totalitarian, is growing, along with its influence throughout the region. That is very much the case.

I will conclude with recommendations, which I offer to the Government in their interest as much as in mine and in everybody else’s. The right hon. Member for Barking said this earlier on. I want to repeat it, and I make no apology for repeating many of these things because we are in agreement on this matter.

My first recommendation is to proscribe the IRGC as a terrorist organisation, which would make it a criminal offence for any UK citizen to deal with it. During the Prime Minister’s campaign to be leader, he stated back in August ’22 that the IRGC proscription

“must now be on the table”,

and in December 2022, he vowed unequivocally that he and the Home Secretary would utilise

“the full range of tools at our disposal to protect UK citizens from the threat of the IRGC”.

Hear, hear. He referenced the important actions of his predecessors, who proscribed Hamas and Hezbollah, and he indicated that IRGC proscription would be the very next step. Well, if it is to be the next step, we have been hovering on one leg for some considerable time. It is not a great place to be, it is physically difficult and it is also looks rather ridiculous.

My second recommendation to my hon. Friend the Minister is to use the breadth of the sanctions regimes to target the wide range of actors involved in human rights violations and other hostile activities committed by the Iranian regime, the Islamic Revolutionary Guard Corps and their agents in the UK and internationally. As I said earlier, proscribing is different from sanctioning. It affects the whole organisation; any activity associated with it becomes a criminal offence in the UK. That is why it has to be done, because to mop up these smaller actors that are running around the place proselytising this foul idea and ideology is important, and we need to put them beyond any further involvement with the UK.

My third recommendation is to encourage the prompt and effective investigation of any individuals or entities involved in human rights violations where there is a link in the UK, and highlight the legal pathways available to target those persons and confiscate any assets illegally obtained. My final recommendation is to increase resources for the UK’s enforcement agencies to allow them to build capacity for investigating and prosecuting entities involved in the commission of international human rights violations, as well as violations of UK sanctions against Iran and the link between the two.

When my hon. Friend the Minister responds to the debate, I do hope she is not going to say a few things that I have heard from various Foreign Office officials and the occasional Minister, including, first: “The reason why we won’t proscribe them is that it is important for us to be able to pick up the telephone and speak to the Foreign Minister in Iran”. I agree that it is important for dialogue, but dialogue with the deaf changes nothing, so that is not dialogue.

The second thing I often hear is this: “The United States needs a backchannel to get to Iran. We offer a backchannel.” Honestly, if America really wants to get in touch with Iran and needs the UK to be a backchannel, something has gone fundamentally wrong with America. We need to deal with policy that affects us and act for our citizens, rather than worrying about the Americans wanting to have a backchannel. Please, let us not hear any more about backchannels.

I have a huge amount of respect for my hon. Friend the Member for Wealden, and she knows that. She is a sanctionee of China, along with me and others, so I simply say that it is genuinely time for the UK to give a lead on this because many other countries in Europe would follow us. I have been in contact with many of them, as she knows, and many said, “Our Governments will move the moment the UK moves.” Some countries have already proscribed. I am convinced that the big countries like the UK that have capacity for this will move with us. That will have a huge effect on Iran and shockwaves would run right back to China as well.

It is long overdue that we call time on the proxy actor that sits in the middle east with the support of other totalitarian regimes such as Russia and China—on its behaviour, activities and foul funding of the most awful terrorist organisations we have ever seen, which absolutely devastate their own economies. Imagine how much the money that has been given to Hamas by various entities, including Iran, could have benefited the people in Gaza needing hospital treatment, roads and proper sewerage by now had it not been used for weapons, tunnel building and attacks on others. That is what we need to stop, and proscription is exactly how we have to do it.

--- Later in debate ---

[Ms Ghani]

I am not sure what the process is, but because the right hon. Lady raised the issue with me and I am responding in the debate, I will ensure that correspondence is sent to tell the FCA what was said today, and that we would like a response to the issues raised, which are concerning.

I have a few more points to make, which I think are the most important. We have talked about some of the major macro issues, but there are other issues that Iranians have to deal with day in, day out—in particular the human rights abuses that are mostly meted out to women and young girls. The case of Mahsa Amini was raised earlier. She was 22 years old and was arrested simply for refusing to wear a hijab. In the widespread protests that followed her death, women removed their headscarves and chanted, “Women, life, freedom.” The protests were crushed violently by the IRGC. I am a Muslim woman myself, and it should not be a privilege to choose to show my hair or life-threatening for me not to cover it up, but unfortunately that is the case for many women in Iran.

In any debate on Iran, we have to take into account its terrible human rights abuses at home—the repression of women and girls; the uninhibited use of the death penalty; violent crackdowns on dissenting voices—which will not go unchallenged. Just last week, we saw more reports of the regime’s appalling treatment of protesters, journalists and those expressing their right to freedom of expression, including the fearless artist Toomaj Salehi.

[Sir Iain Duncan Smith]

I apologise for interrupting my hon. Friend in her flow, but I want to check something. As I understand it, Iran is not specified as a threat in the integrated review; I think it is described as a “persistent destabilising” influence in the middle east. Does she agree with that?

[Ms Ghani]

I assume that my right hon. Friend was reading exactly from the integrated review. Obviously, I would agree with the exact words of the integrated review, or the integrated review refresh.

[Sir Iain Duncan Smith]

Worth a try.