U.S. decision on Revolutionary Guards could further damage Iran’s economy

Move would mark first time Washington officially designates a military branch in another country a ‘terrorist’ entity.

Members of the Iranian Revolutionary Guards march during a parade to commemorate the anniversary of the Iran-Iraq war (1980-88), in Tehran September 22, 2011. (photo credit: REUTERS/STRINGER)
Members of the Iranian Revolutionary Guards march during a parade to commemorate the anniversary of the Iran-Iraq war (1980-88), in Tehran September 22, 2011.
(photo credit: REUTERS/STRINGER)
A reported decision by the US to designate Iran’s Islamic Revolutionary Guard Corps (IRGC) a “terrorist organization” could significantly damage the Islamic Republic’s already failing economy, analysts believe.
President Donald Trump’s administration is set to announce the move in the coming days, according a report in the Wall Street Journal. If it comes to pass, it would mark the first time Washington officially labeled another country’s military a “terrorist” entity.
Dr. Raz Zimmt, an expert on Iran at the Institute for National Security Studies (INSS) in Tel Aviv, told The Media Line that such a decision had “the potential to cause a lot of damage,” but he was unsure it would ultimately be an effective strategy.
“It will be very difficult, if not impossible, to really trace all individuals and companies involved in economic activities linked to the IRGC,” Zimmt explained.
As an example, he cited an oil worker employed by a company with links to the IRGC.
“Is [this worker] considered to be someone who would be under sanctions? I don’t know exactly what the US administration is prepared to do,” he noted.
The IRGC was established by Ayatollah Ruhollah Khomeini following the 1979 Islamic Revolution in a bid to consolidate several paramilitary forces and protect the country’s Islamic system of law. Its reach has evolved such that it now also controls a significant portion of the country’s economy, including its nuclear program and key sectors of the oil, gas and telecommunications industries, as well as major infrastructure projects.
Some estimate that the IRGC controls anywhere from 10 percent to 33% of the entire Iranian economy via subsidiaries and trusts.
“Saying that as a whole the IRGC is a terror organization means that actually millions of Iranians are members of a terror organization,” Zimmt elaborated, adding that men in the Islamic Republic between the ages of 18 and 20 must serve in the military, and many are therefore recruited into the IRGC.
“The bottom line is that, yes, the IRGC controls quite a significant segment of the Iranian economy, but it will take many efforts to see which individuals and companies are indeed related to the organization,” he stressed.
Adding complexity to the issue, according to Zimmt, is the fact that the IRGC’s main activities in the missile and nuclear programs are already under sanction. The same goes for the Quds Force, an elite armed wing of the IRGC, which carries out activities in other countries across the Middle East and farther afield.
The Trump Administration’s upcoming move would mark an escalation in the White House’s increasingly harsh strategy toward Tehran, and comes amid recent reports that the US is preparing to impose additional economic sanctions on the Islamic Republic in the coming months.
Dr. Eldad Pardo, an Iranian affairs expert at the Hebrew University of Jerusalem, told The Media Line the move would also heighten the impact of economic sanctions already in place since Trump reimposed them last year.
“It’s one thing to breach American sanctions, but it’s another to support a terrorist organization, so it will add to the fears that some businesspeople feel when dealing with Iran,” Pardo stated.
“Basically, if you want to deal with Iran, you have to deal with the Revolutionary Guards because they are involved in everything,” he said.
“It’s not a smart business decision to invest in a country that is in direct confrontation with the United States,” he added. “The great majority of the Iranian people want to stick with the nuclear deal; they want to open the economy; they want a transformation of the regime. This will add to that pressure.”
Pardo concluded by saying: “Of course, the policy will be judged by its implementation. The goal is not to destroy Iran, but to force it to change its policies.”
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