BRIEFING PAPER Number CBP 7983, 8 June 2017

Iran and the re-election By Ben Smith

of Rouhani

Contents: 1. The 2017 election 2. What difference will it make? 3. UK relations

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 and the re-election of Rouhani

Contents

Summary 3 1. The 2017 election 5 System 5 Result 6 2. What difference will it make? 7 2.1 Rouhani’s first term 7 Human rights 7 Foreign policy 8 Economy 9 2016 elections 10 2.2 Second term 11 Trump Administration and Iran 11 Ballistic missile programme 12 Iran in the Middle East 13 Supreme Leadership 13 Economy 14 3. UK relations 15 Nuclear deal 16 Dual nationals cases 16

Cover page image copyright press conference by Tasnim News Agency. Licensed under the Creative Commons Attribution 4.0 International licence / image cropped.

3 Commons Library Briefing, 8 June 2017

Summary

Hassan Rouhani won the 2017 presidential election handsomely, winning 57% of the votes cast, against his conservative rival Ebrahim Raeisi’s 38.5%, and avoiding a second round. Many saw the election as a watershed moment for Iran. Both candidates were insiders, however, or they would never have been allowed to stand in Iran’s tightly controlled election. Neither candidate promised to tear up the international agreement on Iran’s nuclear programme. Towards the end of the campaign, Rouhani shifted his campaign style, to make some sharp attacks on his opponents and on the conservative establishment, including the Islamic Revolutionary Guards Corps. An apparent attempt to motivate more radical and younger voters, it sharpened the reformist flavour of the election result. Reformist candidates also did well in simultaneous local elections. Rouhani’s first term was dominated by the nuclear agreement and largely successful attempts to stabilise the economy; inflation was brought under control for the first time in many years. A better- functioning economy did not translate to better living standards for poor Iranians, however, and unemployment, especially among the young, remained very high. Although Rouhani had offered better protection for human rights, this was not delivered in the first term, largely because conservative factions (allied with Supreme Leader ) retain control of the judiciary, the security apparatus and other important domestic institutions. Amnesty International reported heavy suppression of freedom of conscience and common and widespread torture of detainees. In foreign policy, too, there was no moderation of Iran’s intervention in countries such as Syria and Lebanon. Iranian-funded and organised Shiite militias in Iraq were accused of war crimes. Here again, the President has limited influence. In the next few years the Trump Administration’s approach to Iran may determine the survival of the nuclear deal, which he described as “disastrous”. The US president has made hostile comments about Iran and sought to bolster traditional Middle East alliances with Israel and Saudi Arabia. So far, the Administration has not taken any decisive steps to end the nuclear deal. A review of policy towards Iran was announced in April 2017. The Iranian ballistic missile programme could be a flashpoint. It is not included in the nuclear deal but is covered by a UN Security Council Resolution that calls on Iran not to work on ballistic missiles that could carry a nuclear warhead. Iran carried out a test in January on a missile that the US said was nuclear-capable (Iran denied that it breached the Security Council Resolution). The Administration imposed new sanctions connected with the ballistic missile programme. 4 Iran and the re-election of Rouhani

The Trump Administration has made clear its view that the outgoing Administration, in order to secure the nuclear accord, allowed Iran too much leeway to disrupt the Middle East, and that the nuclear deal provided Iran with funds to do that. Getting Iran to change its policy in the Middle East will not be easy, however, as Iran considers itself to be facing existential threats. Although the power of the presidency is strictly limited and the Supreme Leader is far more powerful, the election is important to Iran – it will influence the choice of the next Supreme Leader (Ali Khamenei is 77 and in dubious health). The result also suggests that a new Iranian generation is less interested in preserving the principles of the Revolution than in pragmatic policies, engagement with other countries and personal freedom. Nevertheless, the conservatives, or ‘principlists’ – those who defend the principles of the Revolution – remain powerful and could well make a comeback at the next presidential election in 2021. The UK’s traditionally difficult relationship with Iran is unlikely to be changed rapidly by Rouhani’s re-election. The UK and Iran have had full diplomatic relations since 2015, but the relationship has been disrupted by arrests of UK-Iranian dual nationals and by disagreements over the Syria conflict, among other things. Nevertheless the UK supports the full implementation of the nuclear deal.

5 Commons Library Briefing, 8 June 2017

1. The 2017 election

Although many commentators presented the 2017 Iranian presidential election as something of a watershed moment for reformists and System conservatives, the candidates come from Subject to some age and education similar establishment backgrounds. They are criteria, Iranian citizens are eligible to both clerics and both have served the Islamic register to run in the presidential Republic for a long time. election. In March 2017 Supreme Leader Ali Khamenei Candidates are then vetted by the declared the ‘year of the resistance economy’, , the body set up to arguing for self-sufficiency and the defence of make sure that the democratic the revolution. Observers read this as a fairly elements do not undermine the direct challenge to the nuclear deal and Revolution. Loyalty to the principles incumbent President Hassan Rouhani’s attempt of the Revolution and political to open Iran up to the world and Western competence are required. Of the economies. However, the Leader’s favoured 1,636 contenders who applied to candidate, Ebrahim Raeisi, did not promise to contest the election, six were chosen. scrap the deal. The voting age is 18, and some 55 Rouhani only acquired the label ‘moderate’ million Iranians are registered to vote. after his endorsement in 2013 by Ali Akbar The Presidential election has a second Hashemi Rafsanjani, pragmatic conservative round if the first does not produce a President from 1989 to 1997, and Mohammed candidate with an absolute majority. Khatami, reformist President from 1997 to 2005. If Rouhani is closer to the Iranian clerical establishment (and perhaps a more natural supporter of Rafsanjani’s pragmatic conservatism) than his reputation suggests, Raeisi is clearly a hardliner: he is known for his role in the execution of thousands of socialists after the Revolution. The campaign started calmly enough but, despite the fact that no incumbent has ever lost the Iranian presidential election, polls did not predict an easy victory for Rouhani, especially if the conservative vote coalesced on one candidate. Towards the end of the campaign, Rouhani changed tack, launching into a ferocious attack on his main rival: …the people will say no to those who over the course of 38 years only executed and jailed; those who cut out tongues and sewed mouths shut; … those [who] banned the pen and banned the picture. Those people shouldn’t even breathe the word freedom, for it shames freedom.”1 He also criticised the Islamic Revolutionary Guards Corps for allegedly trying to undermine the Iranian nuclear deal, and said that the era of “violence and extremism” was over. Analysts saw Rouhani’s attacks on the hard-line establishment as campaign tactics more than indications of policy. However, the tactic’s apparent success strengthened the idea that the reformists have popular

1 Ali Vaez, ‘Iran’s Bipolar Election’, International Crisis Group, 18 May 2017 6 Iran and the re-election of Rouhani

legitimacy on their side and this may strengthen Rouhani’s hand in the tussles to come. In the week before the election, Es’haq Jahangiri and Mayor Mohammad Baqer Qalibaf pulled out of the race. Qalibaf withdrew to bolster the Raeisi campaign, Jahangiri in favour of Rouhani. Result In the first round, Rouhani received an unexpectedly high 57% of the votes cast, aginst Raeisi’s 38.5%.2 Since Rouhani won more than 50% there was no need for a second Rouhani gets 57% round. He won in 23 of the 31 provinces, so his support was quite well in the first round spread across the country. Turnout was surprisingly high, with polling stations opened extra late to cope with the extra traffic. Local elections Municipal councils were also elected on 19 May. All the seats on Tehran city council fell to the reformists, ending 15 years of control by the conservatives. Reformist candidates did well in other local elections across the country.

2 ‘Hassan Rouhani wins another term as ’, PressTV, 20 May 2017 7 Commons Library Briefing, 8 June 2017

2. What difference will it make?

Having commemorated Hashemi Rafsanjani in his victory speech, Rouhani said: “I would also like to appreciate my dear brother, Seyyed .”3 Former reformist President Khatami has been banned from Iranian politics by the establishment, with the media prohibited from publishing quotes or images of him; to mention Khatami’s name at all was a challenge to the hard-liners. Rouhani may intend to confront anti-reform forces, but does he have Does he have the the power? After previous President Ahmadinejad’s open challenge to power? the authority of the Supreme Leader, Khamenei took decisive steps to bolster the powers of his post at the expense of the presidency; the limitations of the presidency (and of Iranian ) have been on display during Rouhani’s first term.

2.1 Rouhani’s first term Hassan Rouhani was elected in 2013 on a flagship policy of negotiating the international agreement over the Iranian nuclear programme and an end to sanctions.4 This was intended to revive the economy and increase Iran’s integration with Western countries and regional neighbours. After the failures of the previous Ahmadinejad presidency – rampant inflation, economic stagnation and the worst public disorder in 10 years during demonstrations against his ‘fraudulent’ re-election in 2009 – analysts think that the Supreme Leader was willing to give the reformists a chance. So economic reforms and the nuclear deal were allowed to go ahead. Human rights If reforms to protect human rights were expected during Rouhani’s first term, they never materialised. Opposition leaders , Mir Hossein Mousavi and Zahra Rahnavard, Mousavi’s wife, remained under , even though Rouhani had spoken in favour of their release during the election campaign. There were just as many political prisoners during his first term as under his predecessor, with Kurdish representatives and journalists continuing to be particular targets, and many human rights defenders were imprisoned. Iran continued to execute large numbers, especially those found guilty of drugs offences, but also minors. Iran retained its number two spot in the world executions ranking.5 Restrictions on freedom of speech if anything became tighter, and executions continued unabated. In 2016 WhatsApp was added to the Tighter censorship list of banned social media, which included Facebook and Twitter.6 Music events were banned, particularly those featuring women.

3 USIP Iran Primer, Rouhani Victory Speech, 20 May 2017 4 For more on the nuclear deal see the Commons Briefing Paper The Lausanne nuclear accord with Iran, October 2015 5 ‘Iran is sentencing children and teenagers to death’, Amnesty International press release, 25 January 2016 6 Amnesty International, Iran 2016/2017 8 Iran and the re-election of Rouhani

A large number of dual nationals – particularly US Iranians and British Iranians – were arrested (see below). Foreign policy Another area where the Supreme Leader retains control is in foreign policy.7 Many in the West had hoped that the nuclear deal would bring easier relations with Iran, particularly in the Middle East; this was not to be. Partly driven by events, Iranian continued to intervene aggressively in Iraq and Syria and has maintained its support for Hizbollah. The Lebanese Shiite militia is at present Iran’s most convincing military threat against Israel, and Iranian strategists argue that it deters Israel from attacking Iran. The survival of the Assad government is essential to Hizbollah a vital asset facilitate Iranian support for Hizbollah; a hostile, Sunni-led government in Syria would be a huge blow to the militia. Observers argue that Iran and its allies are trying to secure a land corridor across Syria through which to supply Hizbollah and Damascus, reaching the Mediterranean. Iranian commanders re-routed it recently to avoid a growing US military presence, according to reports.8 Some Iraqi Shiite militias are funded and organised by Iran and have been accused of atrocities against Sunni civilians in areas of Iraq taken from ISIS. Hizbollah has also participated in the Syria conflict on the side of the Syrian government. Hizbollah has been re-armed by Iran with short and medium-range missiles and was highly significant in the recapture of Aleppo from rebel forces. It has also gained experience in Syria of working with conventional Russian and Syrian armed forces and with the IRGC, something which Israel is monitoring closely.9 Iran is accused by the Gulf States of stoking up the war in Yemen, by supporting the Houthi rebellion there. There is some evidence of support, particularly in the form of training for Houthi fighters, largely delivered by Hizbollah.10 The US Navy said that missiles fired by the Houthis at US warships in the Red Sea in October 2016 were Iranian- supplied and several shipments of weaponry destined for the Houthis were intercepted in the Red Sea.11 But the Houthis are not Shia, and many analysts are sceptical of the Saudi-led coalition’s narrative of Iran controlling the rebellion. Reports The Houthis are not suggest that Iran tried to dissuade the Houthis from taking over the Shia Yemeni capital, Sanaa, but were ignored.12 In Afghanistan Iran has shifted position from 2001, when it officially supported the campaign to oust the Taliban. Iran has become wary of

7 Geneive Abdo, ‘No Matter Who Wins, Iran’s Supreme Leader Controls Foreign Policy’, Brookings Institution, 14 June 2013 8 ‘Iran changes course of land corridor to Mediterranean coast’, Guardian, 16 May 2017 9 ‘Hizbollah boosted by battleground successes in Syria conflict’, Financial Times, 15 February 2015 10 Mareike Transfeld, ‘Iran’s Small Hand in Yemen’, Carnegie Endowment for International Peace, 14 February 2017 11 ‘U.S. Officials: Iran Supplying Weapons to Yemen’s Houthi Rebels’, NBC News, 27 October 2016 12 ‘Iran Warned Houthis Against Yemen Takeover’, Huffington Post, 20 April 2015 9 Commons Library Briefing, 8 June 2017

the US presence in the country and is pressing for a full US withdrawal. According to one US military commander, Iran is now building ties with the Afghan Taliban, hoping to undermine the US military presence.13 The Afghan government, too, has claimed that Iran is responsible for an upsurge in violence in western provinces of Afghanistan, bordering on Iran.14 Economy The President’s strongest role is in economic policy, and here Rouhani has made a difference. Inflation fell from 35% to 9% during his term and the economy, which had been contracting at about 4% annually in 2013,15 ended his first term posting annual growth of about 6%.16 Subsidies on basic goods were reduced and benefits were reformed to be more targeted, steps which many economists welcomed. Oil 6% GDP growth production rose quickly from the 2.8 million barrels per day produced under sanctions, to reach 3.8 million barrels per day in 2016; more than half of that is exported.17 Strong growth in oil sales has increased government revenues sharply and strengthened the balance of payments, although in January 2012, when the EU imposed the oil sanctions, oil was trading at twice the price compared with early 2017. Economic disappointments Unemployment remains quite high, particularly for young people, and in fact increased in the second quarter of 2016, despite robust growth. increased in 2014, probably because of reforms to the benefits system;18 the uneven distribution of the benefits of growth was a theme of the conservatives in the election campaign. One of the reasons for this is that levels of foreign direct investment that are far below those predicted by the Rouhani team. The US still has sanctions in place against Iran associated with the terrorism and ballistic missiles. Some Republicans have advocated adding more, including possibly the designation of the whole of the Islamic Revolutionary Guards Corps as a sponsor of terrorism. (At present the IRGC overseas arm, the Qods Force, is designated by the US and Canada.) This has had a ‘chilling effect’ on economic relations (particularly in the banking sector), even between Iran and third countries. Not only is there the disincentive of existing and threatened new sanctions. Conservative forces in Iran have a strong hold on the economy, especially the Islamic Revolutionary Guards Corps. The IRGC’s economic interests grew strongly during the Ahmadinejad Presidency, both because President Ahmadinejad favoured them and

13 ‘While the U.S. wasn’t looking, Russia and Iran began carving out a bigger role in Afghanistan’, Washington Post, 13 April 2017 14 Ahmad Majidyar, ‘Iranian Support for Taliban Alarms Afghan Officials’, Middle East Institute, 9 January 2017 15 Iran GDP Annual Growth Rate, Trading Economics 16 Aniseh Bassiri Tabrizi, ‘Iran votes between moderation and conservatism’ RUSI, 19 May 2017 17 ‘A Year After Iran Deal, Oil Flows But The Money’s Stuck’, Bloomberg, 25 July 2016 18 World Bank, Iran overview 10 Iran and the re-election of Rouhani

because the sanctions regime offered opportunities for the well- connected IRGC to take acquire large chunks of the telecommunications, banking, building sectors. So besides the ideological concerns, the IRGC is wary about the nuclear deal and better relations with the West for economic reasons – they worry that a less opaque economic system with companies moulded and strengthened by foreign investment could lead to stronger competition and weaken their economic levers.19 Not only have their interests in the economy allowed the IRGC to IRGC economic frustrate some of Rouhani’s reforms – they also dissuade foreign interests dissuade investment. The Rouhani government took steps to pressure IRGC investment economic interests to work within normal legal frameworks and to ensure competition in tenders, but the effectiveness of these was limited.20 One of Rouhani’s main offers to the electorate was to tackle corruption. In any country where it is so entrenched, this is a tall order, and in Iran the control by his opponents of the judiciary and important media outlets further complicates matters. Iran did make some progress in the ranking for the perception of corruption.21 2016 elections In 2016 Iranians went to the polls to elect members of the Islamic Consultative Assembly, the Parliament and the . At these elections Rouhani supporters made strong gains in Parliament, although they fell short of getting an overall majority (although the Iranian system is not based on parties so affiliation is not clear). The Parliament offered some support to the President on economic reform, where the Presidency was able to implement some of its reforms. It was less supportive on political, social and cultural questions, where the conservatives (and the Supreme Leader) would have put up more resistance. The 2016 elections were also significant because they were a test of A majority for strength of the different strands in Iranian politics, one which was won reformists and symbolically by the reformists, despite the Guardian Council’s veto on pragmatists in the 22 many reformist candidates. Members of Parliament who opposed the parliament economic opening that came along with the nuclear deal were punished by the electorate. The death in January 2017 of Rafsanjani, though, will weaken reformists; he was the major defender, according to one exiled Iranian journalist: “Rafsanjani was the main protective shield for Iranian reformists.”23

19 ‘Iranian Economic Reform Between Rouhani and the Guards’, Carnegie Endowment for International Peace, 12 April 2015 20 ‘Iran’s Revolutionary Guards wary of threat to business interests’, Financial Times, 2 July 2015 21 Trading Economics, Iran corruption index 2007-2016 22 ‘Why the Iranian Elections Are a Turning Point’, Huffington Post, 2 March 2016 23 ‘Will Iran's Alliance With Russia Last?’, VoA, 11 January 2017 11 Commons Library Briefing, 8 June 2017

2.2 Second term Trump Administration and Iran During a visit to the Middle East, setting out to solidify his alliance with traditional allies Israel and Saudi Arabia, Donald Trump said about the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with Iran: “The Iran deal made by the previous administration is one of the worst deals I have ever witnessed -- and I’ve witnessed some beauties.”24 On the other hand, during his January 2017 visit to the Gulf he agreed with King Salman of Saudi Arabia on the importance of “rigorously enforcing the [nuclear deal] with Iran and of addressing Iran’s destabilising regional activities.”25 While the Administration seems to have toned down its comments on China and Mexico, for example, the tone used towards Iran has remained hostile, as the Administration seeks to solidify US relations with traditional allies Israel and Saudi Arabia, broadly supporting their positions against Iran. Nevertheless, in April 2017 the Administration signed the statutory Nuclear deal letter certifying that Iran has not broken conditions of the JPOA, despite extended comments suggesting otherwise from Donald Trump. In May, the Administration renewed sanctions waivers that allowed foreign companies to trade in Iranian oil. At the same time, however, a human rights report critical of Iran was released just before the Iranian election and a further round of sanctions was imposed in relation to the ballistic missile programme. That could have bolstered the positions of hardliners, who have traditionally made political capital out of suspicion of the US, and analysts interpreted it as a sign that the Trump Administration does not intend to soften its policy in order to help reformers in Iran, whom many conservatives in the US regard as “faux.”26 Economically, US Administration hostility to the JCPOA and to Iran in general will undermine the confidence of foreign investors, who will fear new sanctions against doing business with Iran. The US Congress has introduced seven bills intending to impose new sanctions on Iran since the inauguration of Donald Trump, and some in Congress want the designation of the IRGC as a foreign terrorist organisation, but has run into opposition from the State Department and the Department of Defense, according to some reports, because IRGC-supported militias are fighting ISIS in Iraq. In May, however, the Administration gave Boeing clearance to sell planes to Iran, despite the IRGC’s heavy involvement in Iranian aviation. The Iranians may have concluded that the Trump Administration is talking tough about Iran but reluctant to tear up the deal. Several

24 ‘Remarks by President Trump and His Majesty King Abdullah II of Jordan in Joint Press Conference’, White House press release, 5 April 2017 25 “Trump chats with Saudi, Abu Dhabi leaders about 'safe zones'”, Politico, 29 January 2017 26 John Hannah, ‘Why Trump’s Iran Sanctions Waiver Should Worry the Mullahs’, Foreign Policy, 18 May 2017 12 Iran and the re-election of Rouhani

commentators have argued that it would be difficult to renegotiate the deal partially and neither European allies nor the Russians or Chinese are in the mood to re-impose sanctions. The EU High Representative for foreign policy, Federica Mogherini, tweeted the EU’s continued support for the JCPOA after Rouhani’s election success.27 An end to the deal could leave the way open for Iran to develop a nuclear weapon quickly, unless the US or Israel is prepared to take military action against the programme. Ballistic missile programme The JCPOA does not mention ballistic missiles. Negotiations for the nuclear deal were restricted to enrichment and the possible creation of warheads, to facilitate agreement, while ballistic missiles (the most likely vehicle for a nuclear warhead) were dealt with separately by UN Security Council Resolutions. Under the then existing UN Security Council Resolution 1929 of 2010, Iran was prohibited from undertaking any activity related to ballistic missiles capable of carrying nuclear weapons.28 Resolution 2231 of 2015, which endorsed the JCPOA and replaced Weakened Resolution 1929, merely “calls upon” Iran to halt the programme for constraint on eight years but does not legally require it. ballistic missiles Iran has tested several missiles since the inception of the JCPOA and the passage of UNSCR 2231 but on 29 January 2017 the IRGC tested a missile that the US Administration declared to be in violation of UNSCR 2231, although Iran stated that the test was in compliance. Some sources say that a nuclear-capable cruise missile was tested at the same time (hard information on Iranian missile tests is scarce). 29 UNSCR 2231 makes no mention of cruise missiles. On 3 February the US imposed sanctions on 25 Iranian individuals and organisations, most notably the IRGC Qods Force, who were allegedly “involved in procuring technology and/or materials to support Iran’s ballistic missile program.”30 Further sanctions were imposed in May 2017 on two Iranian defence officials, an Iranian company and members of a China-based network for supporting the ballistic missile programme.31 Iran has tested no further nuclear-capable missiles since January, although there have been tests of missiles viewed as defensive.32

27 ‘EU vows continued nuclear deal support following Rouhani re-election’, Euroactiv, 22 May 2017 28 ‘Security Council Imposes Additional Sanctions on Iran, Voting 12 in Favour to 2 Against, with 1 Abstention’, UN Security Council press release, 9 June 2010 29 ‘Iran tested nuclear-capable cruise missile: German newspaper’, Reuters, 2 February 2017 30 ‘Treasury Sanctions Supporters of Iran’s Ballistic Missile Program and Iran’s Islamic Revolutionary Guard Corps – Qods Force’, US Treasury press release, 3 February 2017 31 ‘Treasury Sanctions Iranian Defense Officials and a China-Based Network for Supporting Iran’s Ballistic Missile Program’, US Treasury press release, 17 May 2017 32 Farhad Razaei, ‘Iran’s Ballistic Missiles Program: Changing Course in the Trump Era?’, Harvard Belfer Center, 8 May 2017 13 Commons Library Briefing, 8 June 2017

Iran in the Middle East The Iranian reformists’ win in the 2017 may make little difference to policy in the Middle East, especially since foreign policy is largely in the hands of the Supreme Leader. Some middle class Iranians are reported to be resentful of military spending and corruption;33 the election may strengthen those within the government arguing for change, but they are not likely to prevail in the short term. A stronger US coalition against Iran would aim to deter Iran’s ‘meddling’ in the Middle East and its support for Hizbollah. This would be far from easy, though. Many in Iran’s security establishment see an effective Hizbollah as an existential concern for the Islamic Republic. There are also growing ties between Iranian-backed militias in Iraq and Hizbollah. Then there is the fact that the US-led coalition is nominally on the same side as Iran in the fight against ISIS in Iraq. Meanwhile, the future of the US/Russian relationship under Trump is Russia relations unclear. If US rapprochement with Russia solidifies, that could mean a less hostile US attitude to the Assad government – something which Iran would welcome. So far, Hizbollah has not attacked Israel during the Syria conflict, despite repeated Israeli military action to destroy Hizbollah arms convoys in Syria. If the Trump Administration turns up the pressure on Iran, that might change. Supreme Leadership The Rouhani victory’s biggest longer-term significance may be the influence it will have on the battle to succeed Ali Khamenei, who is aged 77 and whose health is deteriorating. The Supreme Leader is officially appointed by the Assembly of Experts, another powerful body under Iran’s revolutionary constitution. But the Supreme Leader has a strong influence over the composition of the Assembly of Experts. Akbar Rafsanjani said in 2015 that a committee of the Assembly of Experts was considering possible candidates but little public discussion of the succession takes place. Observers think that Raeisi has the backing of hard-liners and the present Supreme Leader, and a victory in the 2017 election could have confirmed his status as the most likely to succeed Khamenei. In the event, the decisive victory of the reformist camp has strengthened their hand in the coming contest for the Supreme leadership. Present Leader Khamenei was President before his promotion, but he had the backing of the first Leader, and Rouhani may not receive Khamenei’s support. If Khamenei survives until the next presidential election and conservatives win it, they would be in a much stronger position to take the position of Supreme Leader when it comes vacant. Major General

33 ‘Iranian Voter’s Plea: Stop Saying ‘Death to America’’, New York Times, 15 May 2017 14 Iran and the re-election of Rouhani

Qassim Soleimani is leader of the Qods Force, the overseas arm of the IRGC, and ‘star’ of Iranian action in Iraq; he is a possible conservative presidential contender in 2021.34 Until then, Rouhani will try to broaden his coalition among reformists and pragmatic conservatives. He will try to occupy the position vacated by the death of Akbar Rafsanjani – as a high-ranking counterweight to hard-liners in the establishment. Economy The second Rouhani term is unlikely to see a surge in inward investment, given the Trump Administration’s comments about the possibility of new sanctions. Nevertheless, if the economy continues its present pace of growth, the public will have felt some of the benefit before the next election. If the Iranian economy is not to integrate with the West, however, China and Russia could provide an alternative that many hardliners would prefer.

34 ‘Rouhani victory sets the scene for future battles between Iran’s competing factions’, Gulf States Newsletter, 25 May 2017 15 Commons Library Briefing, 8 June 2017

3. UK relations

The UK has had difficult relations with Iran for several years. The UK supported the 1953 coup against the elected Mossadegh government, after his government’s nationalisation of the Iranian oil industry, which had belonged to what became BP. The UK has been labelled ‘’ to the US’s ‘’. “Little Satan” The UK government pursued a relatively tough line against Iran’s nuclear programme before the deal, encouraging other EU member states to agree strong sanctions. Diplomatic relations In November 2011 relations took a turn for the worse. The UK, the US and Canada were the first countries to respond to an IAEA report on the Iranian nuclear programme, imposing financial sanctions on Iran.35 On 28 November Iran downgraded relations with the UK in response. On 29 November 2011 protesters, angry about the latest round of sanctions, stormed the British Embassy in Tehran, smashing windows and burning the British flag. It was widely assumed in the UK that the Iranian authorities had not done enough to prevent the incident, although the Iranian government issued a statement regretting the “unacceptable behaviour by a small number of protesters in spite of efforts by the police.”36 On 30 November all Iranian diplomats in the UK were expelled. In November 2013, the UK and Iran agreed that relations would be conducted through a non-resident Chargé d’Affaires, Ajay Sharma. Iran also appointed its own non-resident Chargé d’Affaires. On 20 February, the government ended the formal arrangement whereby Sweden and Oman acted as the protecting powers for British interests in Iran,37 meaning that bilateral business would thenceforth be conducted directly by British officials. On 17 June 2014, following an improvement in relations over the preceding few months, the then Foreign Secretary William Hague announced that the Government intended to re-open the Tehran embassy.38 In September 2014, Prime Minister David Cameron met Iranian President Rouhani in New York,39 and shook hands. It was the first such meeting since the of 1979. In 2016 full diplomatic relations between the UK and Iran were restored and Nicholas Hopton was appointed as the Ambassador; Hamid

35 For more on the sanctions, see the Commons Briefing Papers In Brief: The IAEA report and action against Iran, November 2011 and In Brief: The Financial Restrictions (Iran) Order 2011, December 2011 36 ‘Iran protesters storm UK embassy in Tehran’, BBC News Online, 29 November 2014 37 HC Deb 24 February 2014, c29 38 HC Deb 17 June 2014, c80WS 39 ‘Leaders of UK and Iran meet for first time since 1979 Islamic revolution’, Guardian, 24 September 2014 16 Iran and the re-election of Rouhani

Baeidinejad was appointed Iranian Ambassador to the Court of St James. Nuclear deal In a speech to the Gulf Cooperation Council in December 2016 Prime Minister Theresa May underlined the Government’s commitment to the nuclear deal but criticised Iranian actions in the region: The UK is fully committed to our strategic partnership with the Gulf and working with you to counter that threat. We secured a deal which has neutralised the possibility of Iran acquiring nuclear weapons for over a decade. It has already seen Iran remove 13,000 centrifuges together with associated infrastructure and eliminate its stock of 20% enriched uranium. That was vitally important for regional security. But we must also work together to push back against Iran’s aggressive regional actions, whether in Lebanon, Iraq, Yemen, Syria or in the Gulf itself.40 Responding to the comments, Supreme Leader Khamenei called the “policies and the actions of the British in the past two centuries a source of evil and misery for the peoples of the region.”41 “Evil and misery” Theresa May re-stated her support for the JCPOA after the Trump inauguration: We continue to believe that the Iran nuclear deal was an important step forward and an important contribution to stability in the region. We continue to support it.42 Dual nationals cases Nazanin Zaghari-Ratcliffe remains in an Iranian jail after being sentenced to five years on unspecified national security charges. Mrs Zaghari- Ratcliffe is married to a British citizen and has both British and Iranian passports. Iran does not, however, recognise dual nationality so treats her as an Iranian. Her sentence was confirmed after an appeal to the Iranian Supreme Court was dismissed in January 2017. There has been speculation that she is being held because of her work with Media Action, the BBC’s charitable arm that aims to promote press freedom and international development. Her husband, meanwhile, has claimed that she is being held as a ‘bargaining chip’ to pressurise the UK Government to pay back £500 million that it owes to Iran for an order Chieftain tanks of Chieftain Tanks that was never delivered to the Shah, because the revolution intervened. That was raised in the House of Commons in a Parliamentary Question in 2016: Bob Stewart: To ask the Secretary of State for Defence, what plans his Department has to return the funds owed to the government of Iran for the purchase of Chieftain tanks through International Military Services which were never delivered. Philip Dunne | Ministry of Defence: This matter is being handled by International Military Services Limited (IMS).

40 ‘Prime Minister's speech to the Gulf Co-operation Council 2016’, 7 December 2016 41 ‘Khamenei condemns Britain after PM May calls Iran a regional threat’, Reuters, 17 December 2016 42 HC Deb 6 February 2017, c35 17 Commons Library Briefing, 8 June 2017

Negotiations are commercially sensitive and a confidential matter between IMS and the Iranians. The UK Government does not dispute the outcome of court hearings on this matter, but the current EU sanctions against the Iranian Ministry of Defence remain in force.43 Other British nationals are in prison in Iran: Kamal Foroughi was born in Iran and moved to the UK in the 1970s. He was working in Tehran as a consultant for Petronas, the Malaysian oil company, when he was arrested and charged with espionage in 2011. The UK government maintains that he has done nothing wrong and has raised the matter with Iran.44 Roya Nobakht, another dual UK-Iranian national, was sentenced in 2013 for posting unfavourable remarks about the Iranian government on Facebook. Prime Minister Theresa May raised her case with the Iranian authorities in September 2016.45 It is not only UK dual nationals who have been subject to controversial arrest. French, Canadian and US citizens have also suffered similar fates. In January 2016 four US-Iranian dual nationals were released, reportedly as part of the nuclear deal. Jason Rezaian and three other US-Iranians went free, as the US released seven, mainly dual nationals, who had been convicted of nuclear smuggling.46 The motivations behind the detentions are complex and opaque. But it would seem reasonable to assume that they were, at least partly, prompted by some Iranian officials wanting to sabotage the Rouhani government’s strategy of building better relations with Western countries.

43 HC Written question – 41566, 5 July 2016 44 HL Deb 23 January 2017, c515 45 HC Written question – 52754, 14 November 2016 46 ‘Iran releases Washington Post journalist Jason Rezaian in prisoner swap with US’, Guardian, 16 January 2016

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