The designation of the IRGC as a foreign terrorist organization will complicate any future talks between Iran and the United States. It also sets an important international precedent that could lead to the spread of the practice of labeling foreign military branches as terrorist groups. The impact on the IRGC itself, however, might be limited given the extent to which existing U.S. sanctions already covered Iran and the IRGC. Iran's response is likely to remain proportional and not escalate into military reprisals.
Following two years of debate, the administration of U.S. President Donald Trump opted on April 8 to designate Iran's Islamic Revolutionary Guard Corps (IRGC) a "Foreign Terrorist Organization." This is the first time that the U.S. State Department has listed a branch of a foreign military as a terrorist organization, setting an important international precedent. Iran responded in kind the same day, designating the United States a supporter of terrorism and U.S. Central Command (CENTCOM) a terrorist group.
The Big Picture
The U.S. strategy of pushing Iran into a corner continues, with Washington now labeling Iran's Islamic Revolutionary Guard Corps a foreign terrorist organization ahead of a looming decision on whether to expand sanctions on Iranian oil exports. This is the first time that the United States has issued such a designation for a foreign military unit, creating an important international precedent and escalating U.S.-Iran tensions yet again.
Designating the IRGC as a foreign terrorist organization is a provocative new component of an ongoing U.S.-led process of widening and tightening the sanctions net on Iran. Washington hopes eventually to force Tehran to negotiate a comprehensive agreement curtailing its support for Iranian allies in the region and its ballistic missile program.
The new sanctions step will, however, complicate any future negotiations between the United States and Iran, even after Trump has left office. Iran will almost certainly demand a reduction in sanctions pressure on the IRGC in talks over a comprehensive deal with the United States. But the United States will be more willing to provide relief on other types of sanctions, such as those related to Iran's nuclear or ballistic missile activities, given the political difficulty that any U.S. president will encounter in attempting to delist the IRGC in the absence of a substantial change in Iranian regional strategy and policies toward Israel, the United States and the West.
An Important International Precedent
The United States maintains four different kinds of "terrorist lists" it can use to target different individuals, groups and countries. It designated Iran a state sponsor of terrorism in 1984. In 2007, it labeled the Quds Force of the IRGC, which handles overseas IRGC operations, a specially designated global terrorist (SDGT) under Executive Order 13224. And in 2017, it designated the IRGC itself an SDGT under the Countering America's Adversaries Through Sanctions Act. The U.S. foreign terrorist organization designation — the only one of the four terrorism lists the United States reserves for organizations — under the Immigration and Nationality Act previously had only been used to target non-state actors including al Qaeda, Hezbollah and the Revolutionary Armed Forces of Colombia.
The new designation may not have much additional impact on the IRGC's ability to finance itself and move money around to support its allies.
The April 8 designation of the IRGC is thus the first time the United States has labeled an entire unit of a foreign military a foreign terrorist organization. The United States had previously avoided taking such action because it did not want to set a precedent that could be used against it. By keeping the foreign terrorist organization designation squarely focused on non-state actors, it could also avoid the thorny debate of what state actions could provoke such a direct designation. Now, the United States has broken a taboo in international relations, and other countries could soon pass similar designations about their adversaries.
Limited Effects on the IRGC
The IRGC and its subunits such as the Basij, Quds Force and Aerospace Force are already subject to numerous overlapping U.S. sanctions, so the new designation may not have much additional impact on the group's ability to finance itself and move money around to support its allies. Moreover, the IRGC and Iran itself have already proved creative at skirting U.S. sanctions.
In some ways, the foreign terrorist organization designation is not even as strong as the other three types of U.S. designations. For example, the SDGT designation provides broader powers for sanctioning foreign individuals and entities that support groups on the SDGT list. Nevertheless, the new designation will pose some new challenges for the IRGC. Just being a member of the IRGC will now incur more pervasive sanctions, and its officials will face broader travel bans. Whether current or former IRGC officials will now reduce their travel to Western countries for fear of U.S. extradition, however, remains to be seen.
Either way, the new sanctions do not fundamentally alter the reality of existing sanctions. As before, the nature of the sanctions against the IRGC means foreign companies must conduct thorough checks when working with Iranian companies to ensure the latter have no ties with the IRGC lest the foreign companies incur U.S. financial penalties.
Iran's Likely Pragmatic Response
Iran's immediate response to the new U.S. designation — counterdesignations of its own — has been proportionate. The difference is that Iran's counterdesignations of CENTCOM and the United States are largely symbolic. At least rhetorically, however, some Iranian officials — including IRGC commander Mohammad Ali Jafari — have hinted at stronger actions against the United States, such as attacks on U.S. military forces in the region by the IRGC, or by Iranian-trained militias in places like Iraq.
There are very good reasons, however, for Iran not to act on such threats — namely, the significant U.S. response such attacks would incite, including on military targets in Iran. The tit-for-tat legal designations simply do not change the dynamic that keeps simmering Iran-U.S. tensions from bubbling over into open conflict. Instead, Iran is likely to continue with a more subtle response, such as cyberattacks against U.S. companies and allies in the region.
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