|Image source: IAEA website|
This follows the introduction on 21 November by the governments of the United States (US), Canada and the United Kingdom (UK) of additional autonomous sanctions against Iran in response to the International Atomic Energy Agency (IAEA) Board of Governors’ report about the advancement of Iran’s nuclear research and development program.
On 1 December the European Union (EU) foreign ministers decided to impose additional EU financial and energy sanctions against Iran. The same day Michael Danby MP, Chair of the Joint Standing Committee of Federal Parliament’s Foreign Affairs Defence and Trade, called on the Australian Government to impose additional sanctions against Iran.
On 8 November 2011, the IAEA produced its most detailed report to date about Iran’s nuclear program, entitled Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran. This report asserts that Iran’s capability to develop a ‘nuclear explosive device’ has significantly improved over the past few years, possibly with the help of foreign scientists. It alleges (p. 11) that:
…Iran may have planned and undertaken preparatory experimentation which would be useful were Iran to carry out a test of a nuclear explosive device.
On 18 November 2011, the IAEA adopted a resolution supporting the report’s findings, expressing ‘deep and increasing concern about the unresolved issues regarding the Iranian nuclear program’.
The Iranian Ambassador to the IAEA, Ali Asghar Soltanieh, dismissed the IAEA’s resolution, calling it ‘biased, illegal and politically motivated’. The Iranian Parliament suggested to the Iranian Government that Iran’s ties with the IAEA be reviewed. Speaker of the Iranian Parliament and former key nuclear negotiator, Ali Larijani, said that the IAEA report was ‘unrealistic’. He added that further international sanctions would not prevent Iran from pursuing nuclear technology, which he claims is for ‘peaceful’ or nuclear energy purposes.
The findings of the IAEA report have increased diplomatic tensions in an already volatile Middle East region. Israel renewed its threats to launch targeted military strikes against Iranian nuclear research facilities. The US Defense Secretary Leon Panetta cautioned that should Israel exercise such a threat, there could be unintended consequences for Middle East security and ‘severe economic consequences around the world’.
Russia has expressed doubts about the IAEA’s November report, while China voiced its concern about Israel’s threat of a military action against Iran.
UN Security Council sanctions
In December 2006, the United Nations (UN) Security Council Resolution 1737 introduced sanctions against Iran. On 23 December 2006 the Security Council Sanctions Committee 1737 was established to monitor their implementation. The Committee is a subsidiary organ of the Security Council and consists of all members of the Security Council. Its 90-day reports are available here.
The sanctions were extended under UN Security Council Resolutions 1747 (March 2007), 1803 (March 2008) and 1929 (June 2010) and previous measures reaffirmed with UN Security Council Resolutions 1887 (September 2009) and 1835 (September 2008). The fourth round of sanctions, which Australia has fully implemented, came into force in June 2010.
Australia’s autonomous sanctions
Australia imposed autonomous sanctions against Iran on 15 October 2008. These measures supplement the UN Security Council sanctions, and include financial sanctions against specific individuals and entities, travel restrictions against listed individuals, and arms and strategic goods embargo.
On 29 July 2010, the government announced additional measures against Iran, and publicly released a list of individuals and entities on 4 August 2010. Australia’s Autonomous Sanctions Regulations are currently under review following the passage of the Autonomous Sanctions Bill 2010. The Reserve Bank of Australia administers Australia’s financial sanctions against ‘Iranian entities and persons who contribute to Iran's proliferation activities but are not already listed by the UN Security Council’.
As noted above, Australia announced its intention to impose additional sanctions against Iran on 6 December 2011. According to the Minister for Foreign Affairs, Kevin Rudd, 'the measures will further restrict business with Iran's financial and petroleum sectors'.
Other autonomous measures (US, UK and Canada)
On 21 November in a coordinated measure the UK, Canada and the US imposed additional autonomous sanctions against Iran. The British Government’s decision to halt all financial transactions with the Central Bank of the Islamic Republic of Iran actively discourages trade with Iran. Her Majesty’s Treasury Department said that was the ‘first time that the UK has used these powers to cut an entire country’s banking sector off from the UK’s financial sector’.
A Canadian statement on additional sanctions is available here. The US State Department reported the US is expanding sanctions against Iran and ‘identifying the Islamic Republic of Iran as a jurisdiction of “primary money laundering concern” under section 311 of the USA Patriot Act’.
While Iran and the US do not have official diplomatic relations, the Iranian Parliament downgraded Iran’s relationship with the UK from the ambassador’s level to a charge d’affaires level. Following mob attacks on the UK embassy in Tehran on 29 November all British diplomatic staff had been withdrawn from Iran, and the UK Government also expelled all Iranian diplomats from Britain leading to the closure of Iran's embassy in London.
The Australian Minister for Foreign Affairs Kevin Rudd has condemned the UK embassy attack. Several countries, including France, Germany and Norway, have temporarily reduced their diplomatic representation in Tehran.
The Financial Action Taskforce, the global body responsible for anti-money laundering and anti-terrorist financing policies standards, has publicly identified Iran as a high risk nation since October 2007; and, since February 2009, has been calling upon its members (which include Australia, the US, Canada, China, the Russian Federation and the UK) to implement and strengthen counter measures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran.
In March 2010, the Minister for Foreign Affairs and the Minister for Justice jointly announced consultations on proposed regulatory measures to prohibit high risk transactions with Iran of AUD$20,000 or more. High risk transactions include international funds transfer, bills of exchange and promissory notes.
Individuals or businesses seeking to continue to deal with Iran would need to seek an exemption from the Department of Foreign Affairs and Trade. The Government is currently considering responses to the draft regulation.
Given Australia’s uninterrupted diplomatic relations with Iran since 1968, it is unclear how additional measures would precisely affect Australia’s trade with Iran as well as existing parliamentary relations between Canberra and Tehran.
Australia’s merchandise exports to Iran in 2010–11 were valued at $157 million and merchandise imports at $121 million, while data on trade in services is unavailable. Recent media reports indicate that in the past two years the Department of Foreign Affairs and Trade has referred ‘about 10 alleged breaches of sanctions to the Australian Federal Police’ whilst rejecting 11 applications to trade with Iran in 2010–11.