BICOM

1. BICOM, the Britain Israel Communications & Research Centre, is an independent research centre producing research and analysis about Israel and the Middle East. BICOM’s research team is based in London and Jerusalem and we have published a number of papers about Iran including the Iran nuclear deal, UK policy towards Iran and Hezbollah. The following submission draws on that experience and the extensive research that has been conducted by the BICOM research team.
2. BICOM has previously submitted written and oral evidence to the FASC on issues regarding Iran. In January 2019, written evidence was submitted by BICOM on the topic of Global Britain: ‘The future of UK sanctions policy inquiry,’ which was subsequently published by the FASC. In September 2014, BICOM sent written evidence – followed by an oral presentation – to the FASC on the topic of UK policy towards Iran, which was widely quoted in the report.
3. This submission will address UK policy towards Iran by focusing on the UK’s response to Iran’s role in the region, the FCO’s role in multilateral diplomacy regarding Iran, and the UK’s priorities therein.

Introduction

4. Since the JCPOA nuclear agreement with Iran was signed in 2015, UK foreign policy toward the Islamic Republic has focused predominately on three pillars: grand diplomacy regarding the state of the JCPOA; improving our trade partnership; and protecting British nationals and assets in the region from Iranian activity. The UK has sought to pursue these objectives despite the US withdrawal from the JCPOA, the diplomatic crisis over Nazanin Zaghari-Ratcliffe (and several other dual-national citizens under arrest in Iran), the seizure of the British-flagged Sterna Impero in the Straits of Hormuz and three Iranian violations of the JCPOA agreement.
5. The JCPOA deal led to an improvement in UK-Iran relations. Then Foreign Secretary Philip Hammond paid a historic visit to Tehran and reopened the UK’s diplomatic mission, which closed in November 2011. Bilateral trade increased by 42 per cent from January to October 2016 and 57 per cent in the same period in 2017, and British Airways began flying direct from London to Tehran. However, the economic rebound did not persuade Iran to moderate its behaviour.
6. Following the US withdrawal from the JCPOA in May 2018, Iran’s actions (as described below) have escalated in order to: increase the cost for the US (and regional allies) of its withdrawal; pressure other JCPOA signatories to provide economic concessions and; build leverage for future talks, regardless of whether President Donald Trump is re-elected.
7. The UK’s long-term interest in the region should be to prevent a US-Iran war that would put at risk our own facilities and personnel. In the short-term, the UK should encourage its Western allies to seek greater leverage for future negotiations with Iran, through a more balanced approach of military action and economic steps, including the prospect of selective sanctions relief.

What has Iran been doing in the Middle East?

JCPOA

8. In May 2018, President Trump reinstated US sanctions on Iran in what his administration calls a “maximum pressure” campaign to try and force the Iranian regime to renegotiate a more comprehensive agreement. In response, Iran waited whilst the EU tried to ensure the economic benefits of the JCPOA in an effort to rescue the agreement. After a year, Iran increasingly applied more pressure on the UK, France and Germany (‘the E3’) to provide sanctions relief or face the agreement collapsing. In July 2019, Iran breached several JCPOA limits set on its nuclear programme: on 1 July it increased stockpiles of low-enriched uranium above the 300kg limit; on 8 July it increased uranium enrichment from the limit of 3.67 per cent to 4.5 per cent; and on 6 September it activated 20 IR-4 and 20 IR-6 centrifuges. (Under the accord, Iran is allowed to operate no more than 5,060 IR-1 centrifuges until 2026. Iran can only begin testing of up to 30 IR-6 centrifuges after 2023.) These steps have so far been calibrated to avoid the immediate collapse of the agreement and/or a military response from the US. Iran has also threatened to enrich uranium up to 20 per cent, which would pose a significant proliferation threat and reduce Iran’s breakout time (a few thousand centrifuges are needed to reach 20 per cent enrichment while a few hundred are enough to cross from 20 per cent to the 90 per cent needed for a nuclear bomb).
9. Iran’s non-compliance is part of a two-fold strategy: to create discord between the US and E3; and to apply more pressure on the E3 to fulfil their economic commitments or face the prospect of the agreement collapsing and an unrestricted Iranian nuclear programme. Whether and how there will be a willingness on the part of the Iranian regime to return to the negotiating table remains an open question. But Iran’s perception of the West’s lack of resolve to respond forcefully – whether diplomatically or militarily – to its recent provocations (military and nuclear) may lead Tehran to escalate further.

Regional Activities

10. Iran continues to destabilise the region. Most recently, US officials believe Iran launched more than 20 drones and at least a dozen missiles at two Saudi oil facilities on 14 September. If correct, it would represent a major escalation from attacks attributed to Iran earlier this year. Iran has threatened to cut off the Straits of Hormuz, a vital transit route for 30 per cent of the world’s oil supply. Six oil tankers sailing through the Straits have been damaged since May in apparent sabotage operations by Iran, and on 19 July Iranian forces seized the UK-flagged oil tanker, Stena Impero, in Omani waters. The seizure was believed to be a retaliation for the UK seizure of the Grace 1 super-tanker off the straits of Gibraltar, suspected of carrying Iranian oil bound for Syria in violation of EU sanctions.
11. Iran treats the entire region as a single operational space and provides military and financial support to its regional proxies without concern for state sovereignty. According to a recent BICOM paper, Iranian funding is estimated at: $700m per year to Lebanese Hezbollah; $100m+ per year to the Houthis in Yemen; up to $1bn per year to Shia militias in Iraq; and $100m per year to Hamas and Islamic Jihad in the Palestinian Territories. In August, a Jerusalem Post report suggested that Iran has increased its funding to Hamas to $30m per month in exchange for intelligence on Israel’s missile capabilities.
12. Iran’s involvement in Iraq, Syria and Lebanon is deep, long-term and proactive. Tehran seeks the transformation of these areas into Iranian satellite states through the creation of new political organisations and sub-state paramilitary structures, which provide forward military positions to either deter (or respond to) direct conflict with Iran, as well as advance Shiism in the region. Its proxies dominate Lebanon (Hezbollah), constitute the strongest non-state military force in Iraq (Popular Mobilisation Units, or PMUs), and maintain independent military bases in Syria, in cooperation with the Assad regime and Russia.
13. Iran has escalated its proliferation of missile technology, including strategically game-changing precision-guided missile technology to Hezbollah, which poses a grave threat to Israel and neighbouring states, and to the Houthis in Yemen, which threatens the security of the Gulf. There are also concerns that Iran has equipped Shia militias in Iraq with similar missile capabilities, in violation of several Security Council resolutions, including 2231, 2216 and 1540.
14. Iran still seeks to establish a land corridor to the Mediterranean, which has the potential to accelerate sharply the shipment of weapons to southern Lebanon and the Golan Heights in Syria in an attempt to open a new front against Israel. This led to a direct confrontation with Israel in May 2018 in which Israel did severe damage to Iranian military infrastructure in Syria.
15. Iran has begun moving its missiles to pro-Iranian militias in Iraq because of Israel’s relatively effective military campaign in Syria. In summer 2019, there were explosions of weapons storehouses at four bases controlled by Iranian-backed Iraqi militias, and most recently one at a base in the Syrian border town of Albu Kamal, which killed up to 21 fighters. Israel has been blamed for these attacks. Prime Minister Benjamin Netanyahu in August 2019 issued a statement in which he confirmed Israel was acting militarily against Iranian assets in Iraq.

Missile testing

16. Iran continues to test ballistic missiles in contravention of UN Security Council Resolution 2231. On 24 July 2019, Iran carried out a test on a medium-range Shahab-3 ballistic missile. According to US officials, the missile was launched from southern Iran and flew some 1,100km before landing east of Tehran. The Shahab-3 is widely believed to be capable of delivering a nuclear warhead. The July 2019 test was the 7th test of either the Shahab-3 or the more advanced Khorramshahr ballistic missile that Iran has conducted since Trump entered the White House in January 2017.
17. Iran conducted two (failed) satellite launches in January and February and a missile explosion before a scheduled satellite launch in late August prevented a third test this year. In mid- August 2019, Iran’s Minister of Communications and Information Technology Mohammad Javad Azari-Jahromi said Iran was preparing to launch a locally built telecommunications satellite named Nahid 1 (Venus 1). The US believes that Iran’s satellite programme is a cover for ballistic missiles development.
18. In August 2019, Iran unveiled new precision-guided air-to-air missiles. The new line-up of missiles dubbed the “Yasin,” “Balaban” and a new series of the “Ghaem” were developed jointly by the Defence Ministry and Iran Electronics Industries. According to the Times of Israel, Yasin is a smart, guided missile with folding wings that can be fired from a range of 30 miles of its target from manned or unmanned aircraft. The Balaban is guided by GPS and sensors, equipped with folding wings and can be mounted under aircraft, while the Ghaem is a heat-seeking missile that can hit within 50cm of a target.

What has the UK and international response been?

UK caught between JCPOA and the US

19. Since Trump’s withdrawal from the JCPOA, the UK has tried, along with France and Germany, to preserve the agreement. Ministers have argued that the deal represented a nuclear counter-proliferation success achieved by multilateral diplomacy and backed up by international law, and that abandoning it increased the risk of proliferation, a regional nuclear arms race and war. UK officials argue that the deal pushed Iran back from the nuclear threshold, lengthening its breakout time from a few months to at least a year and closed off the plutonium track completely. It is also argued that there is no alternative to the deal.
20. However, after Iran’s decision to stop compliance with some JCPOA limits, the UK has taken a stricter line with Iran. In July, the E3 released a statement that said: “While we continue to support the JCPOA, its continuation is contingent on Iran’s full compliance, and we strongly urge Iran to reverse its recent decisions in this regard. We will continue to explore the avenues of dialogue foreseen under the agreement to address Iran’s compliance, including through the Joint Commission of the JCPOA.”
21. The EU has set up a dedicated financial channel, called INSTEX, to facilitate trade with Iran that is not subject to US sanctions. INSTEX was created to allow EU-Iran trade in non-sanctioned goods without the need for cross-border financial transactions. In late June, the European External Action Services announced that the first INSTEX transactions were being processed. But INSTEX offers Iran no solution to sustain its oil sales to Europe, which facilitate the billions of euros worth of imports from Europe.
22. To try and rectify this problem, France has proposed a multi-billion credit package for Iran in exchange for its return to full compliance with the JCPOA and an end to the obstruction of shipping in the Gulf. The credit line, which essentially allows Iran to “pre-sell” oil to Europe, is dependent on the Trump administration agreeing to issue waivers for sanctions on Iranian oil sales – which so far it has said it will not. However, at a G7 meeting in August, Trump appeared open to the idea of credit lines and offered to meet Iranian President Hasan Rouhani.

Regional activities & missiles

23. Following Iran’s seizure of Stena Impero, the UK has increased its naval presence in the Gulf. The UK, along with Israel and Australia, has also joined the US-led maritime security mission and dispatched HMS Kent to the Gulf. The Times reported on 2 September that HMS Montrose has faced 115 confrontations with IRGC ships since the start of July.
24. The UK, along with its European partners, has condemned Iran’s testing of ballistic missiles but has stopped short of adopting new punishments – the last batch of missile penalties from the EU came in December 2012. Following the December 2019 missile test, then Foreign Secretary Jeremy Hunt said in a statement that he was: “deeply concerned by Iran’s test firing of a medium-range ballistic missile. Provocative, threatening and inconsistent with UNSCR 2231. Our support for JCPOA in no way lessens our concern at Iran’s destabilising missile programme and determination that it should cease.” In April, the E3 wrote to the UN secretary-general criticising Iran’s attempts to launch a satellite into orbit via the Simorgh vehicle.
25. While France and the UK have led efforts for new EU missile sanctions against Iranian entities, the lack of consensus in the EU28 on the Iran missile threat and the means for dealing with the issue has prevented their adoption.
26. Prime Minister Boris Johnson has previously expressed concern about Iran’s missile arsenal. In a written statement to the House of Commons in October 2017, Johnson said: “the Government share serious concerns about Iran’s ballistic missile programme and its destabilising activity in the region. Addressing these issues is a fundamental part of the Government’s policy towards Iran and we will consider further appropriate measures.”

Proscribing Hezbollah

27. On 26 February 2019, then Home Secretary Sajid Javid announced in the House of Commons that he was banning Hezbollah as a whole under the Terrorism Act 2000, bringing UK law into line with US, Canada, Israel and the Arab League. The UK first banned what was then described as Hezbollah’s “terrorist wing” in 2001, and its “military wing” followed in 2008 after the group targeted British soldiers in Iraq. Javid said: “We are no longer able to distinguish between their already banned military wing and the political party. Because of this, I have taken the decision to proscribe the group in its entirety.” Anyone expressing support for any part of Hezbollah could in future face a prison sentence of 10 years.
28. In July 2019, the Telegraph broke the story that the Metropolitan Police and MI5 uncovered a Hezbollah bomb plot in North London in 2015, just months before the UK signed the JCPOA agreement. The report noted that police discovered three tonnes of ammonium nitrate stored inside disposable ice packs when they raided four properties in north-west London – three businesses and a home – arresting a man in his 40s on suspicion of planning a terrorist attack. The discovery of the bomb plot was reportedly assisted by information from Israel’s external intelligence agency, the Mossad.

How effective has UK policy been?

JCPOA

29. Britain has played a vital role, along with France and Germany, in reaching a diplomatic solution to the nuclear issue. The JCPOA is a result of numerous E3-Iran talks and agreements since 2003, making the E3 model a cornerstone of European diplomacy. This can be seen in the consensus among countries that the E3 format be maintained after Brexit.
30. At present, the UK is caught in a balancing act between maintaining the JCPOA in concert with Germany and France and maintaining close relations with the US. The near-term outlook for re-engagement between Iran and the US, even indirectly, is poor, as stated by Supreme Leader Khamenei. The Trump administration’s “maximum pressure” campaign is putting great stress on the Iranian economy, but Iran has shown no inclination to capitulate to US demands and has in fact escalated its military confrontations in the region.
31. On Iran’s JCPOA breaches, the UK should encourage a pragmatic approach from the international community. Thus far, Iran’s main goal is to regain negotiating leverage ahead of any resumption of talks, and concurrently to pressure Europe to provide economic relief. As Iran has done in the past, it will likely calibrate the pace and scope of its nuclear activities based in part on the international community’s response. The West’s approach should equally seek to acquire its own leverage for future negotiations, including the re-imposition of EU sanctions if Iran continues with its escalations in the region. Additionally, the UK should encourage the US not to end sanctions waivers that allow Iran to import 20 per cent enriched fuel for its research reactor; the end of such waivers may make it easier for Tehran to publicly justify higher enrichment.
32. The UK should support French efforts to offer some economic relief to Tehran, but only as an outcome of negotiations, not as a condition for negotiations. The UK should also work with its European allies to ensure that INSTEX is not used by the IRGC and affiliated companies for money laundering or to finance terrorism.
33. In the long-term, there is still a contradiction between the goal of preventing Iran from acquiring the means to build a nuclear bomb, and the sunset clauses in the JCPOA agreement, which in time give Iran unlimited scope for uranium enrichment, including stockpiling weapons grade uranium. The UK should warn Iran that if it wants to ensure the economic benefits of the JCPOA, it has to negotiate new limits to its nuclear programme before the sunset clauses end. The UK should also consider threatening to leave the JCPOA within 3-6 months unless Iran return to full compliance with the agreement.

Iran’s nuclear archive

34. The UK should put more pressure on the IAEA to investigate unanswered questions stemming from the discovery of Iran’s secret nuclear archive, which identified additional nuclear facilities, equipment, and activities previously unknown that constitute a violation of Iran’s 1974 Comprehensive Safeguard Agreement and of the NPT’s Articles II and III.
35. The UK should oppose the IAEA adoption of broader conclusions that all nuclear material in Iran is for peaceful activities, and in light of the discovery of the nuclear archive, reopen the IAEA investigation into possible military dimensions (PMD) of Iran’s nuclear programme which was closed in December 2015. This investigation should remain open unless and until Iran provides a complete and credible account of its past military nuclear programme.

Regional activities

36. UK policy regarding the Adrian Darya 1 should be a warning sign to the government that Iran cannot be trusted to keep its word. Iran repeatedly gave assurances that the ship would not deliver oil to any EU-sanctioned entity in Syria or elsewhere before it was released last month. Iran claimed it has sold the cargo to a private entity, but the destination of the cargo is still highly likely to be Syria. The UK should consider urgently what punitive measures it can take against those responsible in Iran and make clear that the outcome was a totally unacceptable violation of sanctions and assurances received and relied upon in good faith.
37. The UK decision to ban Hezbollah was praised by the US and Israel, and it should be encouraged by the recent decision by the Paraguayan government to ban Hezbollah. The UK should put more pressure on its European allies, such as Germany, to proscribe Hezbollah as a foreign terrorist organisation and pursue sanctions measures and intelligence cooperation to address Iran’s ongoing transfer of game-changing precision missile technology to Hezbollah, among other destabilising regional activities.
38. The UK should follow its decision to ban Hezbollah by also designating the IRGC as a terrorist organisation, just as the US did in April 2019. There is support for such a move in the House of Commons, when in January 2018 69 MPs backed a motion to designate the Revolutionary Guards as a terrorist organisation over its suppression of protests in Iran and support for dangerous non-state organisations engaged in terrorist activities.
39. The UK has made significant investments to support its capability to project force into the region. Whilst these forces are geared primarily for naval security, the anti-ISIS campaign and training missions, the UK should make it clear to the US and allies that it can play a larger supporting role in countering Iranian-backed proxies in the region. This can be achieved by improving the defence capabilities of, and greater intelligence sharing with, partners in the region.
40. The UK Government should consider requesting a special meeting at the UN Security Council to debate Iran’s destabilising activity in the Gulf and build international support for a UK-backed resolution re-imposing international sanctions on the IRGC’s business if Iran does not stop harassing shipping through the Straits of Hormuz.

Missile testing

41. The E3’s attempts to impose EU sanctions on Iran over ballistic missile testing have been hampered by the lack of consensus in the EU28 regarding the missile threat. Outside of the EU, the UK can play a leading role in rallying global support for reinforcing national and multilateral trade controls – such as the Missile Technology Control Regime – as well as pressuring key source countries (e.g., China) and transit and trans-shipment countries (e.g., UAE, Singapore, Malaysia) to strengthen their missile-related trade controls.
42. If Iran continues to export missiles and missile production technology to proxies in the region, in violation of international law, then the UK, along with other allies, should take steps to publicise Iran’s proliferation and supply networks and start implementing sanctions on key personnel and organisations.

Relevant BICOM publications

BICOM Briefing | Britain’s Iran dilemma, June 2019 https://www.bicom.org.uk/wp-content/uploads/2019/06/UK-Iran-paper-June-2019.pdf

BICOM Briefing | Hezbollah’s Precision Missile Project, February 2019 https://www.bicom.org.uk/analysis/bicom-briefing-hezbollahs-precision-missile-project/

BICOM Briefing | British Middle East strategy after Brexit, November 2018 https://www.bicom.org.uk/analysis/britain-middle-east-strategy-brexit/

BICOM Analysis | Brig-Gen Michael Herzog on Israel’s pushback against Iran, August 2019 https://www.bicom.org.uk/analysis/brig-gen-michael-herzog-on-israels-pushback-against-iran/

BICOM Briefing | Proscribing Hezbollah as a terrorist organisation, February 2019 https://www.bicom.org.uk/wp-content/uploads/2019/02/Hezbolah-final.pdf

BICOM Briefing | The situation in southern Syria, by Michael Herzog, July 2018 https://www.bicom.org.uk/analysis/briefing-the-situation-in-southern-syria-by-michael-herzog/

BICOM Briefing | Where next for the Iran nuclear deal? A view from Israel, by Michael Herzog, June 2018 https://www.bicom.org.uk/analysis/where-next-for-the-iran-nuclear-deal-a-view-from-israel-by-michael-herzog/

BICOM Briefing | Iranian forces and Shia militias in Syria, March 2018 https://www.bicom.org.uk/analysis/briefing-iranian-forces-shia-militias-syria/