Prevention of Nuclear Proliferation

Debate between Jack Straw and Chris Leslie

Tuesday 13th December 2011 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

As the Minister has outlined, events in Iran in recent months and weeks have been deeply concerning. It is right that we have a debate today on the nature of the British response to those troubling developments. Elements within the Iranian regime have been fomenting public discontent outwards towards other countries, partly in an attempt to stop the Iranian people looking inwards at the regime itself. The increased fuelling of hostility to the outside world is a worrying move, to which neither we nor the international community can afford to turn a blind eye.

Last month, the comprehensive and unequivocal report from the International Atomic Energy Agency made clear the fact that there is an accumulating body of evidence regarding the possible military dimensions of the nuclear programme in Iran. As the Minister has said, in the light of that, it was right that the UK, along with the US and Canada, took the decision to increase diplomatic pressure on the regime in Iran.

We welcome the Chancellor’s announcement that the UK would sever all ties with Iranian banks, including the Central Bank of Iran. As the Minister said, a position came into force on 21 November and is now formally before the House. Since then, important developments have taken place. Following the announcement of the further sanctions, the Iranian Parliament approved a Bill that called for the downgrading of diplomatic ties between Iran and the UK, and several MPs in the Iranian Parliament chanted “Death to Britain” as the measure was adopted. Within a few days, hundreds of demonstrators overran the city centre compound of the British embassy in Tehran. They looted and vandalised the homes of embassy staff and set fire to the main buildings, while Britain’s second embassy compound in the north of Tehran was simultaneously attacked and looted.

I echo the Minister’s comments. I also fully support the remarks made on 30 November by the shadow Foreign Secretary, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), about the “unyielding professionalism and… bravery” of our UK diplomatic staff in Iran.

The notion that such an assault against our embassy could take place without permission, and indeed instruction, from elements in the Iranian regime is too far-fetched to be entertained, and the belated and limited response from the Iranian diplomatic police serves further to discredit such delusions. Let us be clear: this was a co-ordinated attack on two British embassy compounds by a student militia controlled by elements within the regime.

All diplomatic avenues available to the UK and the international community must surely be pursued to increase the peaceful pressure on the regime in Iran to ensure that it fulfils its responsibilities and obligations under international law, and the financial restrictions that we are discussing today should be seen in that light. The attacks on and looting of the British embassy compounds in Tehran following the measures that we are debating serve to highlight the desperation of the regime in the face of increasing pressure and isolation from the international community. It is therefore right for us to cease dealings with Iranian banks and their subsidiaries, and with the Central Bank of Iran, to avert the risk of the financing of terrorism or money-laundering activities emanating from Iran.

[Mr Straw]

May I say now what I should have said in my first intervention? I declare my interest as a co-chairman of the all-party parliamentary group on Iran, although I have absolutely no financial interest.

I am listening carefully to what my hon. Friend is saying. Does he share my significant concern about the fact that we were joined by only two other countries in advancing this proposal? If the case was as strong as is suggested, we could surely have had many others alongside us, and our diplomats would not have been exposed in Tehran as they were.

[Chris Leslie]

I understand my right hon. Friend’s point, which brings me neatly to the five questions that I wish to ask the Minister.

The Government say in the impact assessment that they want to press for further international action. They also say that

“there is a risk that the measure will be weakened by financial institutions in other countries providing financial services to Iranian banks, including in support of Iran's proliferation-sensitive activities”.

My question to the Minister echoes some of the concerns expressed by my right hon. Friend. Will he assure us that he and his Foreign Office colleagues will be active in using all available diplomatic channels to put pressure on other countries to impose sanctions similar to those bilaterally imposed by the United Kingdom, the United States and Canada? It is clear that a concerted international effort is greatly needed to put further pressure on Iran to change course.

We think it important to support the order, but some of my questions are important as well, including one concerning enforcement and penalties. We know that there have been instances of financial institutions breaking rules laid down to prevent Iran’s progress towards nuclear capability. Two years ago, in December 2009, Credit Suisse was fined $536 million in the United States for the removal of information in relation to the origination of US-bound transactions from the “Atomic Energy Organization of Iran” and the Iranian “Aerospace Industries Organization”. In January 2009 Lloyds bank was fined a substantial $350 million in the United States for similar breaches involving Iran and other international restrictions, while in August 2010 Barclays was fined $300 million.

Criminal offence and civil penalties will apply in relation to non-compliance with—or knowledge of, and intentional circumvention of—the new requirements that we are discussing. The penalties are the same as those that the enforcement authorities and courts have in respect of non-compliance under the money laundering regulations 2007—fines, imprisonment for a maximum of two years and so on. The Americans clearly take breaches very seriously, as is shown by the scale of the fines they have imposed, so my question to the Minister is: can he reassure the House that the UK will take a similarly robust approach, with penalties on a scale that reflects the seriousness of the offence, both to prevent breaches of the rules and to punish appropriately those who breach them?

My third question for the Minister relates to the explanatory memorandum, which makes it clear that a licence for exemptions from this order can be granted by the Minister on a case-by-case basis. The impact assessment states that

“it is unlikely we will license significant further exemptions for businesses as this would risk undermining the purpose of the measure”.

That is self-explanatory. We recognise that exemptions are not likely to take place on a significant scale, but will the Minister set out in what circumstances exemptions might be made to those restrictions?

My fourth question relates to the fact that the order has a time limit of a year and, under paragraph 38 of schedule 7 to the Counter-Terrorism Act 2008, the Treasury will be obliged to report every year on the exercise of its functions under that schedule. The Minister has said, as does the explanatory memorandum, that the order will be kept under review, but given the fast-moving developments and narrow time scales involved in the situation with Iran, will he commit to reporting to this House before the annual deadline if circumstances change—for instance, if negotiations on the nuclear programme were to improve or worsen? We hope that the latter would not be the case.

Lastly, will the Minister make it clear to the House, and leave no doubt about the message we are sending today to the people of Iran and to the international community more widely, that despite attacks on our channels of diplomacy with assaults on our embassy, we will not be deterred from actively and creatively pursuing all diplomatic options at our disposal to ensure that Iran upholds its responsibilities and obligations under international law? There is a widespread hope that diplomacy must prevail. We, and other nations around the globe, cannot afford to be complacent. The Opposition welcome this measure from the Treasury and hope that, with the Foreign Office, it will, as my right hon. Friend the Member for Blackburn (Mr Straw) said, be proactive in building a broader diplomatic effort across the globe to stop Iran flouting international law.