Australia has maintained a continuous diplomatic presence in Iran since our Embassy opened in Tehran in 1968. Iran opened an Embassy in Canberra in 1971 and has maintained a presence in Australia since then.
The 1979 Islamic revolution transformed Iran, abolishing the monarchy and establishing an Islamic Republic. The political system now comprises both elected and unelected institutions. The Supreme Leader is Iran's highest political authority and is chosen by the Assembly of Experts, a body of 86 clerics (elected on a regional basis). The President, the unicameral Islamic Consultative Assembly (or Majlis) and municipal councils are elected every four years on the basis of universal suffrage. Electoral candidates are vetted by the Guardian Council, which consists of six clerics appointed by the Supreme Leader, and six legal figures, appointed by the Head of the Judiciary and approved by the Majlis.
The Supreme Leader is responsible for choosing the head of the judiciary, setting general state policy, declaring war and peace, commanding the armed force (including appointment of commanders, control of intelligence and security agencies) and holds the authority to initiate changes to the constitution.
The Majlis has the power to initiate bills but the Guardian Council must approve all bills passed by the Majlis as consistent with Islamic law and the Iranian Constitution.
Elections in June 2013 saw Hassan Rouhani, a pragmatist, elected as President. Rouhahi has pledged greater transparency and cooperation with the international community to resolve concerns about Iran’s nuclear program, made conciliatory statements regarding relations with neighbouring states, and expressed support for improving Iran’s human rights record. Under Rouhani, Iran recommenced nuclear negotiations with the P5+1 (China, France, Russia, UK and USA plus Germany), leading to the ‘Joint Plan of Action’ (JPA) interim nuclear deal. The JPA was concluded in November 2013 and was extended on 24 November 2014 until 30 June 2015. Under the JPA, Iran has halted or rolled back aspects of its nuclear program, in return for a total of around $700 million in temporary EU and US sanctions relief per month.
Australia's bilateral relationship with Iran is long-standing, with a historically strong trade relationship. We continue to engage in dialogue on a range of important issues, including Iran's nuclear program, terrorism, regional issues and human rights.
The Australian Government has consistently reinforced with Iran Australia's long-standing opposition to the proliferation of nuclear weapons and the need to comply with UN Security Council Resolutions (UNSCR) on its nuclear program. Australia fully implements four UNSC resolutions (1737, 1747, 1803 and 1929) imposing sanctions that prohibit a range of activities, including the supply of certain dual use goods and services to Iran, the procurement from Iran of certain military and dual use goods and services, and travel and financial sanctions against designated persons and entities who are engaged in Iran's proliferation sensitive activities.
Since October 2008, Australia has also maintained additional autonomous sanctions in relation to Iran. These include travel and financial restrictions against individuals and entities not specifically designated by the UNSC, but which contribute to Iran's proliferation sensitive nuclear or missile programs or assist Iran violate its obligations under UNSC resolutions. The Australian Government announced additional autonomous sanctions in January 2013. The new measures took effect in July 2013 and January 2014.
The Australian Government remains deeply concerned about the human rights situation in Iran, including the use of capital punishment, in particular for juvenile offenders; violations of political and media freedoms; and discrimination against religious and ethnic minorities. The Government has repeatedly and strongly urged the Iranian authorities to respect the human rights of its citizens. Australia has expressed these concerns in multilateral fora, including the UN General Assembly and the UN Human Rights Council.
Iran is a significant regional economy with a large and fast-growing population (estimated to be over 77 million) and some of the world's largest oil and gas reserves.
The economy is heavily dependent on hydrocarbon exports and dominated by the oil industry, and economic growth is strongly influenced by oil market developments. Around 30-45 per cent of total budget income is generated from oil revenues. A goal of Iranian economic policy over the last 20 years or so has been diversification of the economy away from dependence on oil earnings.
Large state-owned enterprises dominate key industry sectors, and organisations controlled by charitable religious foundations also account for a significant share of GDP. The private sector is generally confined to small and medium enterprises. The IMF has recommended that earlier efforts at economic reform be renewed to improve economic performance. President Rouhani was elected on the promise of improving the economy, which suffered during the administration of previous President Ahmadinejad, due to a combination of financial mismanagement and international sanctions. The economic situation remains difficult.
International sanction measures and declining Iranian oil production have contributed to a drop in Iran’s GDP growth in recent years, although GDP growth was forecast to increase from -1.9 per cent in 2013 to 1.5 per cent in 2014. Inflation fell to around 20 per cent in 2014, from around 35 per cent in 2013. The Statistics Centre of Iran announced average unemployment in Iran for the Iranian year (ending 20 March 2014) of 10.3 per cent, although the real figure is thought to be higher.
Trade and Investment
The value of Australia's two-way trade with Iran was $330 million in 2013-14. Traditionally, Iran has been one of Australia's leading wheat export destinations. Other Australian agricultural exports to Iran include meat, dairy products and wool.
Australia's exports to Iran amounted to $302 million in 2013-14. Primary export items included wheat and meat (excluding beef). It is likely that a portion of Australia's exports to Iran are transshipped through Dubai and are not captured by these figures. Imports from Iran amounted to $28 million over the same period. Australians considering commercial or other dealings with Iran should familiarise themselves with the operation of the United Nations Security Council Resolution-mandated sanctions regime and Australia's autonomous sanctions, and seek independent legal advice before making commercial decisions.