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Abu Dhabi, UAESaturday 15 December 2018

Targeting Revolutionary Guard crucial to Trump's Iran policy

Treasury department imposes fresh sanctions on Iran’s Islamic Revolutionary Guard Corps but Trump avoids full terror designation

The US Treasury imposed sanctions against the nine who it said had funnelled millions of dollars to the Iranian Revolutionary Guard’s elite Qods Force. Reuters
The US Treasury imposed sanctions against the nine who it said had funnelled millions of dollars to the Iranian Revolutionary Guard’s elite Qods Force. Reuters

Wide-ranging new US sanctions targeting Iran’s Islamic Revolutionary Guard Corps show that countering the group will be a focal point of America’s new approach to Iran.

The sanctions were announced on Friday as Donald Trump directed Washington’s Iran policy towards confrontation and containment with his decertification under US law of Iran’s compliance with the historic nuclear deal. The decision now forces the US congress to decide whether to snap back suspended sanctions.

No violations of the deal by Iran have been found by US or international monitoring agencies, and the five other world powers that are signatories are opposed to unilateral changes or a renegotiation of the accord.

But the US president is set on using the decertification to show he is determined to roll back his predecessor’s engagement with Tehran and will aggressively attempt to counter its growing regional influence.

“The IRGC has played a central role to Iran becoming the world’s foremost state sponsor of terror. Iran’s pursuit of power comes at the cost of regional stability, and Treasury will continue using its authorities to disrupt the IRGC’s destructive activities,” US Treasury Secretary Steven Mnuchin said after new sanctions were issued on Friday.

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US partners in the region, especially Gulf countries, Saudi Arabia and the UAE, maintained throughout the negotiations that led to the Joint Comprehensive Plan of Action that they were far more concerned with Tehran’s destabilising activities aimed at cementing control and influence across the Middle East. This included the IRGC’s training and support for proxy militias in Lebanon, Syria, Iraq, Bahrain and Yemen.

Iran’s non-nuclear ballistic missile programme — controlled by the IRGC — has also been a primary concern for GCC countries, and they were dismayed that it was not addressed in the JCPOA.

Trump administration officials had said during the Iran policy review process in recent weeks that the IRGC would itself be declared a specially-designated terrorist organisation, putting it on par with Al Qaeda, ISIL and Hizbollah.

But the White House apparently heeded opposition to such a move by senior military and national security personnel, and only added additional sanctions for the IRGC’s support for its own Quds Force, which has already been designated as a terrorist organisation. The IRGC was also sanctioned for its support of Hizbollah, Hamas and the Taliban.

The US military probably has contacts with the IRGC due to the proximity of their operations against ISIL and indirectly coordinates with forces it backs in Iraq and Syria in the fight against the extremist group. Iranian officials have warned that those same Shiite militias would target vulnerable US forces in retaliation for designating the IRGC.

“If US officials commit this strategic mistake, the Islamic Republic of Iran will surely reciprocate,” Iranian foreign minister Mohammad Javad Zarif said last week. “The IRGC is an honour for our country and a guarantor of the defence of our homeland.”

The IRGC began during the 1979 revolution as a militia protecting the clerics who overthrew the Shah. Since then it has become the most powerful security force in Iran, superseding the regular military services. It controls the ballistic missile programme that is Iran’s most strategic conventional asset, as well as a maritime force operating in the Gulf separate from the Iranian navy. Its elite Quds Force operates across the region backing Shiite militias and militant groups, and was designated by the US as a terrorist entity a decade ago.

After the Iran-Iraq war, and over the past 15 years of international sanctions that choked Iran’s private sector in particular, the IRGC has also come to play a dominant role across the country’s economy.

The former US administration of Barack Obama thought the nuclear deal and greater engagement with Tehran’s elected leadership would strengthen moderates and gradually undermine the IRGC and other hardliners’ economic and social control.

The easing of sanctions and sharp increase in deals with European and Asian firms in Iran has spurred hopes in the country that private businesses may take a greater share of the economy, which the IRGC has opposed. Iranian president Hassan Rouhani in part campaigned on reducing IRGC’s role in the economy.

The new US sanctions appear intended to again increase the risk for European companies and banks to operate in Iran, where they may do business with IRGC-linked entities.

“We urge the private sector to recognise that the IRGC permeates much of the Iranian economy, and those who transact with IRGC-controlled companies do so at great risk,” Mr Mnuchin said.

Some analysts and proponents of the harder line on Iran said the new sanctions on the IRGC could significantly raise pressure on Iran, without the US scuttling the nuclear deal itself.

“The decertification doesn't necessarily lead to the reimposing of sanctions…This on the other hand, imposes actual sanctions on an entity that controls significant parts of the Iranian economy,” Michael Horowitz, an analyst at Prime Source risk consultancy said on Twitter. He said that if the US decides to be zealous and actively target any organisation, including banks, with ties or deals with the IRGC, “this could be akin to reimposing sanction”.

But for other observers, the decision to not classify the IRGC as a terrorist group and only impose some new sanctions would not have a major impact on the group’s economic interests or its military capabilities.

“So far the sanctions will [only] freeze the IRGC out of the US financial system, target three Iranian companies and a Chinese company,” said Marc Martinez, a UAE-based Iran analyst. “Far from significant.”

French, German and other European businesses were also unlikely to be dissuaded from pursuing opportunities in the untapped Iranian market — where they have no American competitors — by the new sanctions, Mr Martinez said.

“European companies already spend a fortune on due diligence to be sure their potential business partner is not related to the IRGC,” he added. “As the final ownership of a company is often behind three, four, or five layers of screens, this due diligence is very thorough. For foreign companies, the IRGC is already de facto blacklisted.”

Mr Martinez also speculated that with punitive new US measures long predicted since Mr Trump’s election, IRGC-linked companies were probably prevented from any involvement in the recent major contracts signed with European companies in recent months.

Mr Trump’s bellicose rhetorical approach to Iran also risks rallying the Iranian public and increasing support for the IRGC, which has been at the forefront of the fight against ISIL. Mr Rouhani’s maneouvring to reduce the IRGC’s economic role may also be undermined by the White House’s moves.