Australia could ramp up actions against Iran for its "egregious" human rights abuses, a parliamentary inquiry has been told.
The federal government could also take action against Iranian diplomats connected with the recent executions of Iranian protesters, and cancel visas of any senior Islamic Republic officials or their families in Australia.
But for the time being, the Albanese government is continuing to engage with Iran, and will keep its embassy in Tehran open and push for a nuclear deal, the inquiry heard.
The inquiry's second public hearing was held in Canberra on Wednesday, with representatives attending from the Department of Foreign Affairs and Trade (DFAT), the Department of Home Affairs and the Australian Federal Police (AFP).
They were called to respond to criticisms that Australia's government is not doing enough to tackle the Iranian regime's brutal crackdown on protesters, including this month's executions of 23-year-olds Mohsen Shekari and Majidreza Rahnavard.
More than 500 civilians, including 69 children, have been killed and about 18,500 arrested since the anti-government protests began in September, according to estimates by the Human Rights Activist News Agency.
The protests — seen as one of the most serious challenges to the Islamic Republic since the 1979 revolution – were triggered by the death in custody of 22-year-old Mahsa Amini on September 16.
DFAT's Marc Innes-Brown told the hearing that while "the regime has kept persisting with its violent and reprehensible crackdown", and the situation in Iran "remains deeply disturbing", Australia would continue engaging with the regime.
But he said Australia could target Iranian government diplomatic staff in Australia if it can be shown they have played a part in the executions of protesters.
"I don't want to go into what policy measures we may or may not be contemplating," Mr Innes-Brown told the inquiry.
"But what I can say, is at the present, we are obviously, in our public statements in our diplomatic contact, trying to discourage the Iranian government from carrying out these executions."
Reports of Australian-Iranians targeted by the regime investigated
The inquiry has also been given evidence of reports of surveillance and abuse by the regime against Australian-Iranians who speak out against its human rights abuses.
Mark McIntyre, AFPs Counter Terrorism and Special Investigations Command, said police had been working with law enforcement counterparts overseas, "particularly with five eyes partners" (the intelligence alliance comprising Australia, Canada, New Zealand, the UK and the US) to identify threats.
He said there were "a number of investigations and operations that are currently held within the AFP and [are] ongoing, that involve a range of allegations involving foreign principals or state actors".
Mr McIntyre said a recent report made by a member of the community to National Security Hotline had been investigated, but not all cases warranted criminal investigation.
"We are acutely aware of the risks and threats that exist, particularly around social media, digital footprints, and the ability of state actors to monitor," Mr McIntyre said.
"That may or may not constitute foreign interference. I can only encourage individuals that have identified potential activity (of Iran's regime) monitoring their social media accounts to report it."
The Department of Home Affairs' representative David Chick told the hearing that generally "espionage and foreign interference is the number one national security threat in Australia".
"Reporting of suspicious acts relating to foreign interference are taken extremely seriously," Mr Chick said, noting that Australian-Iranians could contact the National Security Hotline to report concerns.
Asked if the Department of Home Affairs knows whether there are senior Islamic Republic officials and/or their families in Australia, Mr Chick said: "If there are issues raised in relation to individuals that would result in a breach of their visa conditions, or trigger visa cancellation, then we will take action in relation to that."
Australia urged to take stronger action
Earlier in the hearing individuals from the Iranian diaspora – including members of activist group "Women, Life, Freedom Australia" — said the Albanese government needed to take stronger action by continuing to impose Magnitsky-style sanctions against the Iran and the Islamic Revolutionary Guard Corps (IRGC) officials and individuals.
Human rights barrister Geoffrey Robertson told the hearing while the sanctions imposed so far would not on their own change the way the regime behaves, it was important Australia continued to use them.
He said it would be "enormously impactful" if Australia also called out some of the countries that do not support actions taken against Iran and Russia.
Many of the submissions to the hearing have also called on the government to freeze assets of regime leaders and their affiliates, and impose travel bans against individuals connected to Iran's regime.
Other calls have included expelling the Iranian ambassador — along with those who are closely connected with the regime — and formally recognising the Islamic Republic of Iran as a terrorist nation, and the IRGC as a terrorist organisation.
They also want the government to put in place measures to avoid Australian taxpayer money being used to "support the brutality of the IRI and its regime".
But Mr Innes-Brown said it was important "to continue to have diplomatic lines of communication open" with Iran and that its embassy remained opened so it could provide people who get into trouble with consular assistance.
"The bottom line is (that) we've assessed it's in our national interest to keep that embassy there and be able to engage with the Iranian government," Mr Innes-Brown said.
"Whether we like it or not, they [Iran's government] are influential, including in the region, and they do impinge or have an effect on our interests."
"If we're not talking to the Iranian government about their behaviour, well, nothing's going to change."
Iranian officials summoned eight times since September
Mr Innes-Brown told the hearing DFAT had also summoned the Iranian Chargé d'Affaires eight times since the protests began in September.
These meetings had ramped up since the "particularly egregious" cases of two 23-year-old protesters, Mohsen Shekari and Majidreza Rahnavard, who were executed.
There have also been calls worldwide for the United States and its allies to halt discussions on the Iran nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA).
But Mr Innes-Brown told the hearing, "there have been ongoing discussions with Iran and about reviving the JCPOA" around the world.
Recent human rights abuses by the regime had not changed Australia's position.
"We are hopeful that there can be some sort of agreement in that context that will restrain Iran's nuclear program," he said.
Mr Innes-Brown also rejected suggestions from some senators involved in the inquiry that Foreign Affairs Minister Penny Wong had not been doing enough to support the Iranian people.
He said as well as Ms Wong imposing the Magnitsky sanctions, she had been posting personal messages of support for the Iranian protesters on social media accounts including Twitter.
