Financial Restrictions (Iran) Order 2009

My Lords, this has been an interesting and informative debate. I thank all noble Lords for their attendance and questions today. I hope that all noble Lords will agree that the decision to issue this direction is a proportionate and reasonable response to the threat of proliferation and that this action mitigates the risk of the UK financial system being used to facilitate proliferation-sensitive activities in Iran. It is vital that the UK takes action to ensure that its financial sector is not employed in this manner and the Government are committed to putting in place all necessary steps to ensure that that is the case. I welcome the support expressed by both the noble Baroness, Lady Noakes, on behalf of the Conservative Opposition, and the noble Lord, Lord Newby, for the actions that are being taken by the Government in connection with Iran. We are greatly encouraged by the fact that there is unanimity on the need to take a robust line. The noble Baroness asked when we first became aware that there were problems with the involvement of Bank Mellat and IRISL in activities related to terrorism and nuclear proliferation. I am afraid that details of the sensitive information underlying the restriction cannot be provided since, in the Government’s view, disclosure would be contrary to the public interest. However, I can assure the Committee that we took action as quickly as was appropriate, given the young age of the legislation. Members will be aware that the Counter-Terrorism Act came into force in November 2008. Immediately following its enactment, HM Treasury initiated discussions with the Foreign and Commonwealth Office to consider the most appropriate cases for this use. As noble Lords will appreciate, before we decided to issue this direction under the Act, it was crucial to follow a robust process to gather and analyse relevant intelligence and to ensure a sound legal basis for any action. Furthermore, it was important to ensure that Parliament had sufficient opportunity to consider the direction. I assure noble Lords that the Treasury laid this direction at the earliest appropriate opportunity. The noble Baroness asked about the level of engagement between UK financial institutions and the two targeted entities. A small number of financial institutions had significant existing business relationships with the two target entities. We are working closely with the affected parties to ensure that they are implementing the restriction and that their previous relationship is wound down in an orderly fashion. The majority of UK financial sector companies voluntarily withdrew from business with Iran over the last two or three years. In answer to a further question from the noble Baroness, since the announcement that 17 applications for licences had been granted, two further licences have been granted. The Treasury continues to work with affected parties to issue licences of exemption where appropriate. It is not possible at this point to place a value—