MPs have argued that the UK should treat Iran’s Islamic Revolutionary Guard Corps (IRGC) as a terrorist organisation in future dealings with the country.
The Commons Foreign Affairs Committee said the Government should call out Iran’s "state hostage-taking" practices and lead future international efforts to tackle it.
The committee also advised that Britain takes the lead in working with US president-elect Joe Biden’s administration on the future of a deal curbing Tehran’s actions.
A report by the committee called for the Foreign Office (FCDO) to try to encourage Iran to play a "positive, constructive and predictable role" as a regional power.
The committee said the UK’s message should be clear: "Iran’s destabilising activities are unacceptable because they adversely impact the region and its people but that, when the time comes, the door is open for diplomacy."
The US has already listed the IRGC, the ideological military force that operates both inside and outside Iran, as a terrorist organisation.
The committee said the IRGC’s "clear and enduring support for terrorists and non-state actors working to undermine stability in the region" means Foreign Secretary Dominic Raab and Home Secretary Priti Patel should begin the process of proscribing it.
Committee chairman Tom Tugendhat MP said: "The group’s destructive philosophy and violence within Iran and across the region make a compelling case for it to be singled out for sanction."
One of the most high-profile disputes between the UK and Iran concerns the detainment of Nazanin Zaghari-Ratcliffe since 2016 on secret charges relating to national security.
The committee argues "reluctance to refer to Nazanin Zaghari-Ratcliffe as a hostage" damages efforts to leverage her return.
Mr Tugendhat said: "The UK Government must call the arbitrary detention of foreign nationals what it is: hostage-taking.
"The charges, trials and convictions of British citizens on Iranian soil are a parody of a justice system.
"Using young mothers and retirees as bargaining chips and leverage is an unacceptable form of diplomacy."
In January, US forces killed Iran's most senior general, Qassem Soleimani, in an air strike at Baghdad international airport in Iraq.
Gen Soleimani was the commander of the IRGC's elite Quds Force unit and three days of national mourning were declared in Iran after his death.
While in July 2019, the IRGC seized a British-flagged oil tanker, the Stena Impero, in the Strait of Hormuz for allegedly violating international maritime law.
Mr Raab said the vessel was "unlawfully seized" and it came after Royal Marines seized an Iranian tanker off the coast of Gibraltar.
Cover Image: Iranian Revolutionary Guards in speedboats patrolling the British-flagged oil tanker Stena Impero in July last year (Picture: PA).