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Export Control (Iran) (Amendment) Order 2010

Volume 718: debated on Tuesday 30 March 2010

Motion to Resolve

Moved By

To move to resolve that this House regrets that Her Majesty’s Government have laid before Parliament the Export Control (Iran) (Amendment) Order 2010 (SI 2010/144) without explaining to Parliament how it would be implemented; and calls on the Government to explain why they consider the European Commission to be the appropriate institution for exercising this United Kingdom policy most effectively.

Relevant Document: 10th Report from the Merits Committee

My Lords, it is appropriate that this debate, which I hope will be very short, should come straight after the important resolutions that have just been moved by the Leader of the House—which may or may not be considered tough enough and radical enough—that govern European Union scrutiny reserve and opt-in procedures, since the matter that I am raising touches on the distribution of powers between this House and the EU institutions, although in a way that is rather different from the way in which they are usually handled and described through the scrutiny procedures.

This Export Control (Iran) (Amendment) Order has a clear-enough purpose. It is to extend the list of goods and technology that it is an offence to supply, sell or transfer to Iran. I make it crystal clear that we entirely agree with the policy. Any pressures that can help to curb the destructive ambitions of a repulsive regime are welcome, particularly if that regime is now moving in an unapproved way towards weaponising its nuclear power and threatening to destroy neighbouring countries. This is not the place to go into wider issues about making strengthened sanctions work, which are currently being discussed in a number of forums, or to discuss the prospects of getting Chinese and Russian co-operation, without which no sanctions will be fully effective. That is a much wider issue.

Why then are we concerned about this amended order? Although it is a small item, it stands at the crossroads of much larger ones. In this case, I have the excellent report by the Merits of Statutory Instruments Committee to thank for identifying the issue and urging that we give it further examination. The outcome of the order is to give the European Union Commission new powers, although admittedly very modest ones, over our national policy, in this case, in the highly sensitive area of shaping and determining our foreign policy. The Merits Committee stated:

“The Commission will now be able to amend these Annexes without reference to the Council, on the basis of information supplied to them by EU Member States, and not just on the basis of determinations made by either the UN Security Council or the UN Sanctions Committee as was the case under the previous Regulation. The Department for Business, Innovation and Skills (BIS) have said that they do not think this amendment causes problems in practice and have explained that the nature of an amendment to an Annex would determine whether they would lay a new SI or not. As the Annexes will be directly applicable to the UK, the House may therefore wish to satisfy itself that there are sufficient safeguards in place around this extended”—

I emphasise the word “extended”—

“power of the Commission”.

It is that satisfaction that I now seek in the interests of your Lordships' House and of serving our proper duty to be vigilant in protecting this Parliament’s powers and safeguarding any further transfer of powers that may be taking place.

As I say in my regret Motion, I find it a little difficult to understand how this type of regulation and the power shift implicit in it can take place without the Government at least explaining to Parliament how it would be implemented in practice and how our sovereignty will be affected. When the Minister replies, I would like him to explain that to noble Lords and also why the Government consider that the European Union Commission is the appropriate institution for taking this power and exercising this aspect of UK policy most effectively. It is obvious that the overall application of sanctions pressures by the European Union should be in the hands of the institutions, but the power to shape our own foreign policy considerations should surely rest with us.

Handing yet more powers—I have to say that—to the European Union institutions needs deep consideration. Some may think it is a marvellous idea; some may think it has gone too far. It needs deep thought and, frankly, I do not believe that this order has had very much of that either. I am concerned about the lack of time that has been spent on scrutinising the implications of this order—although the Merits Committee have done an excellent job—and I am concerned about the precedent it sets for the future. If we are an effective legislature, we should not let something like this simply pass without very careful examination and comment. I beg to move.

My Lords, we on these Benches express gratitude to the Merits Committee for bringing this to the attention of this House and the other place, and also to the noble Lord, Lord Howell of Guildford, for raising it in the debate today. It is an important point. I, too, thank the Minister for coming from the BIS today to answer this debate and hope that he will be able to reassure the House on the points raised by the noble Lord, Lord Howell of Guildford. As stated in the SI, the power of the Commission is increased not by an enormous amount but at the margin by a moderate amount, which I, on these Benches, would suggest is a practical measure which should not really cause excessive anxieties in the consideration of these matters. I think it is right that the evolution of the Union has been characterised not only by literal treaties and implementation—and Lisbon is the latest—which enable a much greater degree of co-ordination and the extension in majority voting, quite rightly, in many areas, but also pragmatically, with now a much larger number of countries. Obviously common sense must prevail, therefore, in the way in which the sovereign member states, the sovereign countries—fully sovereign, only conceding rights to the collectivity by freewill of the parliamentary and governmental representatives on every occasion—can decide to assign to the Commission this modest increase in powers.

We take comfort from paragraph 2 of the SI details which refers to the fact that although the 2007 regulation, for example, was directly applicable in all EU member states, national implementation legislation is and was

“required in relation to licensing, enforcement, offences and penalties”.

Furthermore, in the BIS evidence and answers given to the Committee, in Appendix 1 of the report and then in A.4 towards the end, the reassurances are expressed there quite properly and in a satisfactory way, stating that,

“sanctions Regulations often give the Commission some scope for amending Annexes”,

It also states that the Commission is now being given a slightly broader power than usual and

“we do not think that this causes problems in practice. This is because the wording of Articles 2(1)(a)(iii) and 3(2) of the 2007 Regulations set out limits for what the Annexes can include (broadly, only items with WMD end-uses can be listed)”.

I welcome any reassurance the Minister can give.

In conclusion, I thank the noble Lord, Lord Howell for raising this matter. I would just widen it out into the geo-political implications in the Middle East with the British Government, the European Union and the wider international community being resolutely even-handed in the way in which they deal with these problems that are producing a much darker situation in the Middle East with the threat of war, renewed violence and so on. Because of the failure of the international community in not seeking a proper resolution of the Israeli-Palestinian dispute, the rage and anger of the Arab man and woman in the street, and in other non-Arab Muslim countries, is on the increase. Whatever the nature of the regime in Tehran— and I think there is ample and justified criticism about the things that the present Ahmadinejad Government are up to—if there is not a balanced policy and a balanced approach by the UK Government and the Union, that rage and anger will continue. Saddam Hussein was rightly expelled from Kuwait after one year of occupation; Israel is still in the occupied territories now after 34 years. This therefore must be solved by the international community, along with Israel, a country which I much admire, and the less powerful but equally needful Palestinians. And on that note I end, hoping the Minister might have time to refer to that if it is not considered to be out of order.

My Lords, I thank the noble Lord, Lord Howell, for his comments. I think we all share his concern that EU legislation should be subjected to proper scrutiny and that this House and the other place should have the opportunity properly to scrutinise both EU measures and the domestic legislation that implements them.

First, it is simply not true that the Government laid the order without explaining to Parliament how it would be implemented. The December EU Council regulation that led to the order was cleared from scrutiny without comment but was cleared by the European Union Select Committee in this House and by the equivalent committee in another place. The committees had the benefit of a full Explanatory Memorandum.

Secondly, I am very clear that it is appropriate for the European Commission to exercise the powers that were delegated by the regulation. As the FCO Explanatory Memorandum to the regulation says, it improves the speed and efficiency of the process in Brussels. It does not cede any further policy control to the Commission, as any revisions to the list must still come from the United Nations Security Council, from the UN sanctions committee or from member states.

That is not, of course, a complete answer to the noble Lord’s questions. To be clear, we are talking about two instruments. The first instrument is an EU Council regulation that was adopted in December 2009 and amended the earlier 2007 Council regulation that imposed sanctions against Iran. The Commission has always been able to make minor amendments to that regulation. The December regulation simply added a power for the Commission to amend the lists of prohibited and of controlled goods and technology on the basis of information provided by member states. The second instrument—an order under the European Communities Act 1972 and the Export Control Act 2002—just updated a 2007 order that created offences and penalties and supplemented the original EU Council regulation.

The order is very short, and the Merits Committee has not suggested that it implemented the December regulation inappropriately. Indeed, there was very little scope for policy choices on implementation. As noble Lords will know, we do not have to transpose the substantive provisions of EU regulations into national legislation as we do with directives. The debate is ostensibly about the order, but most of the argument has been about the regulations.

In preparing for this debate, I have taken the opportunity to look back over the explanatory material which the Foreign and Commonwealth Office prepared for the December EU Council regulation and the explanatory material which BIS then prepared for the order. I am very clear that the Commission’s powers to amend the EU regulations were properly set out there, and that the Commission can amend the list of controlled goods and technology,

“on the basis of information provided by either the United Nations Security Council or the sanctions committee, or by member states”,

and that there is no formal reference back to the Council.

The FCO memorandum was submitted in mid-October, so there is no question of there having been insufficient time for comments. It may be that the Government can consider ways in which articles with provision for the Commission to amend sanctions regulations can be highlighted even further, but I do not accept the accusation implied by the Motion that we did not do enough to bring the effect of the December regulation on the 2010 order to the House’s attention.

Some commentators in the Opposition might say that we have ceded too much control to Europe. My response is that we have not ceded any powers, as the Lisbon treaty did not change the intergovernmental nature of common foreign or security policy or member states’ responsibility for foreign policy. EU member states make foreign policy decisions unanimously and case by case. That is what we have done here. We worked at the EU to get the right EU-wide policy on Iran that included a tough sanctions package to accompany and reinforce existing UN measures.

This has had a greater impact than unilateral UK action. I am in complete agreement that we need to be careful about what powers are delegated to the Commission and on what terms. However, I am satisfied that, in the particular circumstances of this case, the delegation was appropriate. As the noble Lord, Lord Sykes, says, there is a delicate situation in the Middle East. No reasonable person would disagree that there is a real threat posed by Iran’s proliferation of sensitive nuclear activities—it is in defiance of five UN Security Council resolutions—and that this threat needs to be carefully managed, ensuring that each member state has the time and opportunity to consider any proposed changes in approach.

I thank the Minister for giving way. I have two corrections. One is on his part: it is Dykes, not Sykes. The other is on mine: I meant to say 43 years of occupation.

I thought that I did say that; please accept my apologies.

We need to join with our European partners on this. The threat can be more effectively tackled at a European Union, rather than at a national level, by ensuring that there are uniform measures binding on all member states. Without such action, we could not guarantee that member states would have equivalent controls in place on exports to Iran, with the consequent risk that Iran would be able to further its nuclear ambitions by procuring equipment within the EU.

This is not just about UK policy; the knowledge that we have about Iran’s nuclear procurement necessitates changes from time to time and we need to remain vigilant. It is essential that the EU has the ability to act quickly. The alternative to the process used in these regulations would be to seek the agreement of the Council to changes of this kind. In my view, this would be inappropriate for as serious and volatile a situation as that in Iran.

Finally, the Commission’s power to amend the list of controlled goods, software and technology in the Iran Sanctions regulation is still very closely circumscribed. Without UN involvement, it can only act on the basis of information supplied by member states and only in relation to goods, software and technology,

“which could contribute to enrichment-related, reprocessing or heavy water-related activities, to the development of nuclear weapon delivery systems, or to the pursuit of activities related to other topics about which the International Atomic Energy Agency (IAEA) has expressed concerns or identified as outstanding”.

In addition, the Council is able to amend the common and foreign security policy measure on which the Iran Regulation is based. That gives member states a further level of control. In practice, member states would ask for additions to the controlled list in the context of a working group. The Commission can only act on the basis of information supplied by member states and in practice, such information would be given in the context of a working group with all member states operating by consensus. Therefore, the UK should be able to block any proposition which raises national concerns.

Once again, I am grateful to the noble Lord, Lord Howell, for giving us an opportunity to debate this important issue, but I hope, in view of the further explanation I have given, that he will feel able not to press his Motion.

My Lords, I am extremely grateful to both the noble Lord, Lord Dykes, and to the Minister for addressing this issue and responding to my Motion in a very detailed way. I accept what the Minister says in his assurance that the Commission’s powers—which are new powers, although of a very modest kind—will be clearly circumscribed, in his words, and that therefore, we are fulfilling our duty to be on guard and to watch anything that concerns the powers of your Lordships’ House, or, indeed, of this Parliament.

I cannot resist one comment on the assertion that popped into his brief, and which I have heard so many times before, that the Lisbon treaty did not impinge upon our foreign policy under national control. The general public will stand astonished and bewildered at all the hoo-ha going on about control of the European External Action Service; and about the role of our former distinguished Member, the noble Baroness, Lady Ashton; about the quarrels about what her powers should be, with national governments’ foreign ministers saying she should not take too many; and about the Commission saying she should take more. All that has led to great bitterness and dispute in Brussels, and clearly arises from the Lisbon treaty. To argue that the Lisbon treaty did not affect foreign policy leaves the layman utterly bewildered. It may be technically true, but in the real world it really is not true at all.

I was unable to resist that remark, but I try to sweeten it by saying that the Minister has presented a perfectly sensible response to a matter that I think it was right to raise before the House. In the light of what he says, I beg leave to withdraw my Motion.

Motion withdrawn.