Foreign Affairs, Defence and Security
The relaxation of Iranian sanctions under the Joint Comprehensive Plan of Action will re-open trade opportunities with Iran—a historically significant market in the Middle East. Increased trade ties may also present an opportunity to influence Iran’s behaviour on a range of other non‑nuclear matters. However, monitoring Iran’s adherence to the nuclear agreement and amending Australia’s sanctions accordingly will be an ongoing process.
The Joint Comprehensive Plan of Action
The Joint Comprehensive Plan of Action (JCPOA) came into force in
July 2015, following extensive negotiations between Iran and the P5+1 (permanent UN Security Council
members plus Germany/EU). While Iran did not agree to
end its nuclear program, it did agree to give up critical elements of its
program that will put its progress towards nuclear weapons back by at least a decade.
In return, Iran gets relief from some, though not all, sanctions that have
crippled its economy, especially in recent years.
Over the decades, Australia has attempted to
balance its trade and economic objectives in the Middle East with its
non-proliferation and global security objectives. One of the more challenging
aspects has been the Australia-Iran
relationship, which, prior to the last decade, was mostly cordial,
bolstered by strong commercial and trade links. For much of the period following the 1968 opening of Australia’s embassy in Tehran, Iran was Australia’s largest trading
partner in the Middle East and the ninth largest overall.
Academics have described Australia’s approach to
Iran during this time as being distinctive for its constructive trade‑focused nature which differed from
the periodically hostile relationships with other Western countries. Academic Shahram
that ‘historically, Australia maintained a bipartisan consensus on keeping trade
with Iran separate from other political considerations’. Successive Australian
governments have pointed to the diplomatic and political advantages of
maintaining strong trade ties. Former foreign minister Gareth Evans put
this succinctly in 1995:
The Australian government has found these
positions [support for Hezbollah and Hamas, opposition to Israel, and nuclear
and chemical weapons] deeply unpalatable and has consistently said so ... But our
generally cordial relationship with Iran and the strong trade and commercial links between our two
countries have put us in a strong position to maintain a much more direct and
critical dialogue with the Iranians on these issues than would otherwise have
However, over the past 15 years, increasing international
concern over Iran’s nuclear program and state‑sponsored terrorism resulted
in international sanctions. Australia
implemented both sanctions and from 2008, additional autonomous measures. Specific regulations introduced in 2014
also imposed restrictions on financial transactions with Iran.
After the International Atomic Energy Agency declared Iran in 2005 to be non‑compliant
with its Non-Proliferation Treaty obligations, the UN Security Council developed
targeted sanctions that are binding on all member states, including Australia.
Sanctions against Iran vary across different
countries, have multiple objectives and look to counter multiple perceived threats
from Iran. But it is those directly related to Iran’s nuclear (and missile) program
that have recently been relaxed. Australia’s adoption of the UN sanctions and its
own autonomous sanctions were largely aimed
at addressing this specific nuclear threat, rather than a wider spectrum of
Conversely, the US has a long history of sanctions
against Iran—stretching back to the Iranian Revolution in 1979—that cover a broader
spectrum, namely ‘Tehran’s support for terrorism and destabilizing regional
activities’, and which remain current. Collectively, Iranian sanctions
are still the toughest the world community has imposed on any country.
The Australian Government has implemented
changes in line with its international obligations, but while it has repealed certain autonomous sanctions on Iran (including the financial
restrictions), others remain in place. In May 2016, the Foreign Affairs,
Defence and Trade References Committee recommended that the Department of
Foreign Affairs and Trade explain the reasoning
behind this selective approach and ensure that its website clearly states what
trade is still restricted or prohibited.
The Government has expressed strong
interest in trading with Iran, and plans to reopen a trade office in Tehran—which
it closed in 2010—noting that the
office will ‘establish a permanent presence within the Australian Embassy in
Tehran from the second half of 2016’. The Foreign Minister has also indicated on multiple occasions that she regards Iran as an important element of the fight against the Islamic State.
However, the Opposition has not been quite so
enthusiastic, with former shadow foreign minister, Tanya Plibersek, stating
earlier in 2016:
The Foreign Minister has been ... so prepared to
turn a blind eye to the anti‑American rhetoric of the Iranian government,
the anti-Israeli rhetoric of the Iranian government, to the human rights
abuses, where people are locked up for their sexuality, for following a
religion that’s not approved of by the regime, and most particularly, for
political organisation against an oppressive government.
Although there is enthusiasm to capitalise on new
opportunities afforded by the deal, the Brookings Institution notes
that while ‘there will be a trickle of new business with Tehran ... the
floodgates remain firmly shut for the foreseeable future’. The attitude of the
next US President towards the sanctions regime will also be key to the long-term
success of the deal. This uncertainly is a key impediment to doing business
with Iran in the near future.
For now at least, the deal may provide Australia
with an opportunity to reinvigorate its human rights dialogue and efforts
against the Islamic State. To do this, Iran needs to see benefits from the
deal, and the initial suspension of sanctions is just that.
N Markovic, It’s complicated: a timeline of Australia-Iran relations in a historical perspective
, Background note, Parliamentary Library, Canberra, 9 May 2013.
Back to Parliamentary Library Briefing Book
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.