One of the main purposes of Tehran Bureau’s beneficial ownership research is to uncover conflicts of interest, the prevailing mechanism of corruption in Iran and, indeed, the world. Our research shows that Iran’s clan leaders deliberately place their associates and family members into powerful positions, then exploit their conflicts of interest to strengthen and expand the clans’ political business empires.
Given how prevalent the practice is, it is perhaps unsurprising that Iran’s conflict of interest (COI) laws fall below global standards. A whole swathe of anti-corruption legislation, including COI laws, has been stalled in the Majles (parliament) since 2019 under unusual circumstances.
Transparency International defines conflict of interest as a situation where an individual or the entity for which they work, whether a government, business, media outlet, or civil society organization, is confronted with choosing between the duties and demands of their position and their own interests.
Currently, the IRI’s laws and regulations in this area are limited and rudimentary:
Hassan Rouhani’s administration drafted a relatively comprehensive bill consisting of 40 articles, which was presented to parliament in November 2019 as a “double urgency” bill. It has yet to receive Majles approval, and judging by media and expert opinion, its passage does not seem imminent.
The current version of the bill, “The methods of managing conflict of interest in the fulfilment of legal responsibilities and provision of public services,” is available online. The bill, shortened from an original 70 articles, has been criticized by Iranian law experts and officials as overidealistic and impractical.1 It basically focuses on the “individual” and does not consider institutional or structural conflict of interest.
An alternative bill, consisting of 27 articles, has been drafted by MPs and is currently being reviewed by the parliament’s social commission.2 The drafting of alternative bills by the legislature is not common practice, as bills presented by the executive are supposed to take precedence over in-house parliament bills.
Current Legal Regime
A range of existing acts, law, and regulations explicitly or implicitly deal with the issue of conflict of interest, but they are unorganized, largely undetailed, and similarly oriented toward individual, not structural or institutional, conflict of interest. Here is a list:
An act dating from 1958 3: “Prohibition of the intervention of ministers and the members of the parliament and state employees in state and national transactions.” This is the most comprehensive law, although by international standards it is highly limited. Comprising eight main articles, it basically prohibits any employee of the state (or their close relatives4) from part taking in several types of transactions. Notably, retired state employees are exempt from the law.
“Prohibition of receiving commission in foreign transactions” (1993 act).
“Prohibition of holding more than one [governmental] occupation” (1994 act).
“The act of managing civil services” (2007) has two articles, 47 and 94, that consider conflict of interest among state employees.
“The act for increasing the integrity of the administrative system and for fighting corruption” (2001), especially article 5.
“Implementing the general policies of article 44 of the constitution” (2007 bylaw), especially article 5 (note 1) and article 46.
Finally, there is the 2015 act “Investigating the assets of authorities and officials of the IRI” and its 2019 regulative bylaw.
Source » tehranbureau