Iran: Nuclear Issues

Matthew Offord Excerpts

Tuesday 24th November 2015 Commons Chamber

[Dr Matthew Offord (Hendon) (Con)]

Many Members on both sides of the House continue to have concerns about the Iranian nuclear deal. We have debated the issue on several occasions in Westminster Hall, and I remain disappointed that the opportunity to debate the full deal in Government time has never been afforded to the House. Back in June, the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), said:

“I would certainly ask the Backbench Business Committee to make time for it to be debated on the Floor of the House as well as in Westminster Hall.”—[Official Report, 16 June 2015; Vol. 597, c. 21WH.]

Unfortunately, that has not occurred. The Secretary of State did make a statement to the House in July, but limited time prevented a debate on the merits of agreeing to the deal. I do not intend to open up that discussion again, but I want to ask the Minister to clarify what the Government are seeking to achieve through this evening’s motion, and what the possible impacts might be on the middle east region.

The motion tonight is rather convoluted and requires the casual observer to undertake some research to determine what each of the EU Council decisions and subsequent amendments refer to. In the round, they seek to remove sanctions on transactions regarding foodstuffs, healthcare, medical equipment, equipment for agricultural or humanitarian purposes below €1 million, as well as transfers of personal remittances below €400,000. In addition, the motion is about suspending restrictive measures concerning the prohibition on the provision of insurance, reinsurance and transport for Iranian crude oil; the prohibition on the import, purchase or transport of Iranian petrochemical products and on the provision of related services; and the prohibition on trade in gold and precious metals with the Government of Iran, its public bodies and the Central Bank of Iran, or persons and entities acting on their behalf.

It is fair and rational to ask who will be the main beneficiary of the lifting of these sanctions. Surprisingly, it might not be the Iranian Government themselves but one individual, the Supreme Leader, Ayatollah Ali Khamenei, through his direct control of one of the most powerful and secretive organisations in Iran, the Setad Ejraiye Farmane Hazrate Emam, or Setad.

Setad has become one of the most powerful organisations in Iran, although many Iranians, and indeed many in the wider world, know little about it. In the past six years, it has morphed into a business juggernaut that holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming. The organisation’s total worth is difficult to pinpoint because of the secrecy of its accounts, but Setad’s holdings of real estate, corporate stakes and other assets total about £60 billion, according to Reuters. That estimate is based on an analysis of statements by Setad officials, data from the Tehran stock exchange and company websites, and information from the US Treasury Department.

The motion seeks to remove secondary sanctions on Setad and about 40 firms it owns or has a stake in, which will have a huge impact on events in the middle east. The de-listing of Setad has no direct connection to Iran’s nuclear programme, but its significance is in the company’s relationship to Iran’s ruling elite. The company has interests in almost every sector of Iran’s economy. It built its corporation on the systematic seizure of thousands of properties belonging to religious minorities, business people and Iranians living abroad—we have seen that in the history. Iranians who said their family properties were seized by Setad described in interviews in 2013 how men showed up and threatened to use violence against them if the owners did not leave the premises at once. Although there may be no evidence that Khamenei is personally enriched by Setad’s assets, it is through Setad that Khamenei has access to resources that allow him to bypass rivals and other branches of government.

The nuclear deal, reached in Vienna in July, allows the conglomerate to open bank accounts abroad and procure financing for partnerships. Secondary sanctions have previously prevented foreign banks that wish to operate in the United States and the UK from dealing with Setad. Although most of Setad’s holdings are in Iran, it has some global reach. The Setad-linked entities being removed from US and UK secondary sanctions include firms based in South Africa and Germany. Already, one Setad firm appears to be moving to take advantage of the changes; the Ghadir Investment Company, which the US Treasury identified as a Setad-linked firm, signed a €500 million contract with the engineering unit of Finmeccanica in Italy, as a spokesman confirmed in August.

The even more troubling aspect of the motion is who operates Setad and the other companies that will benefit from sanctions relief. Some have said that the people of Iran will benefit from that relief, but I disagree. It has been claimed in the media that the Iranian revolutionary guard corps, a branch of Iran’s military accused of funnelling arms and other support to Hezbollah and President Assad of Syria, has placed top commanders at the heart of more than 200 Iranian companies. Backers of the nuclear deal have argued that sanctions relief and renewed access to $150 billion in frozen assets will not benefit the revolutionary guard in its support of terrorist organisations in the region because restrictions remain in place against Hezbollah and Hamas. Such a view is not shared by others, including me.

A US think-tank, the Foundation for Defence of Democracies, says that some 229 Iranian companies have board members or shareholders belonging to the revolutionary guard, which also has links to President Assad. The FDD claims that the revolutionary guard either controls or holds shares in 14 companies listed on the Iranian stock exchange, with a combined economic worth of $17 billion. That is in addition to other companies, such as the construction corporation Khatam al-Anbiya, which has secured more than $20 billion in Government contracts and is believed to be the biggest private-sector company in Iran.

Earlier this month, Barack Obama said that the nuclear deal would result in more funding for the Iranian revolutionary guard, but that the alternative was war. He said:

“We have no illusions about the Iranian government or the significance of the Revolutionary Guard and the Quds Force. Iran supports terrorist organisations like Hezbollah. It supports proxy groups that threaten our interests and the interests of our allies—including proxy groups who killed our troops in Iraq.”

We all agree with the words of the Prime Minister in the House only yesterday, when he made the following clear and concise point:

“In ensuring our national security, we will also protect our economic security.”—[Official Report, 23 November 2015; Vol. 602, c. 1049.]

He meant here in this country. The Prime Minister is absolutely right that by protecting the United Kingdom’s economic security we can protect our country. It is my belief that by maintaining sanctions on the Iranian economy, we can prevent resources being fed into the conflict in Syria and other countries in the middle east. I urge the Minister tonight to follow the money ansd see where it takes him.