US Extraterritorial Jurisdiction (British Foreign & Commercial Policy)

Part of the debate – in Westminster Hall at 4:23 pm on 26 March 2014.

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Photo of Mark Simmonds Mark Simmonds The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs 4:23, 26 March 2014

I am grateful for the right hon. Gentleman’s intervention, because it leads me on quite neatly to my next remarks. Before I move on, however, I must say that I do not think he can conflate the challenges that some UK banks have—we can come on to the specifics—with the whole range of issues that affect the bilateral trade relationship between the United Kingdom and Iran. For example, banks must consider other aspects in order to comply with regulatory authorities in the UK and the European Union, as well as in the US. Such considerations include anti-money laundering, concerns about counter-terrorism and all the other aspects that banks must consider when assessing risk and ensuring that they comply with the whole package of important regulatory regimes, US or otherwise.

The right hon. Gentleman referred to banks that have fallen foul of the US regime, but those cases concerned not extraterritorial sanctions but transactions that had a connection to US territory. The allegations were that the banks had directly violated US law by conducting business with Iran from the United States, and it is correct that those banks should respond to allegations that they have broken US regulations within US territory.

I want to move on to secondary or extraterritorial US sanctions, which are at the heart of the thrust of the right hon. Gentleman’s remarks. Along with the European

Union, we have taken steps to protect UK companies from such extraterritorial jurisdiction. The key to our approach to Iran is that our sanctions are so closely aligned with those of the US that the scope for such jurisdictional conflict is small. As I mentioned, we recognise the importance of US and EU sanctions in bringing Iran to negotiations.