U.S. Labels Iran's Guard Corps as Terrorists, Boosting Pressure

(Bloomberg) -- The Trump administration designated an elite wing of Iran’s military as a foreign terrorist organization, the first time the U.S. has slapped that label on a government entity and the latest step in the president’s push to starve the regime of access to cash.

The move to designate the Islamic Revolutionary Guard Corps a “foreign terrorist organization,” which takes effect April 15, is aimed at further scaring away any foreign business or government that does business with Iran. The terrorism label means that anyone providing “material support” to the IRGC could face criminal prosecution.

The move “underscores the fact that Iran’s actions are fundamentally different from those of other governments,” President Donald Trump said in a statement announcing the move. “This action will significantly expand the scope and scale of our maximum pressure on the Iranian regime.”

The U.S. has been seeking new ways to ramp up pressure on Iran since Trump last year quit the multinational accord negotiated during President Barack Obama’s administration that sought to constrain the country’s nuclear program. While Obama’s approach was to persuade Iran to change its behavior by strengthening its links with the rest of the world, Trump has taken the opposite approach with a bet that economic isolation will force the regime to switch course.

The Islamic Revolutionary Guard Corps, created after Iran’s 1979 revolution to support the regime, is deeply embedded in the country’s economy and is already under heavy sanctions. Iran’s government has been on the U.S.’s list of state sponsors of terrorism since 1984, and the Guard’s elite Quds Force has also been branded a terrorist group.

But the administration had previously held off on the terrorist designation, in part because it will pose difficulties for U.S. officials dealing with Iraq and Lebanon, where political parties and militias have close ties to the Guard. The designation means U.S. officials and troops could be prohibited from dealing with officials in Iraq or Lebanon who can be linked to the organization.

The U.S. move came with a lengthy list of accusations against the IRGC, which it said has been involved with the death of more than 600 American troops in Iraq since 2003.

Iran’s Retort

Iranian officials say the Guard isn’t a separate entity but a vital institution that helps protect Iran from external threats and ensure its national security and sovereignty. The U.S. State Department’s special representative for Iran, Brian Hook, downplayed concerns that U.S. officials or troops could run afoul of the designation, saying it wouldn’t impede American diplomacy.

Shortly after the U.S. announcement, Iranian Foreign Minister Mohammad Javad Zarif, in a letter addressed to President Hassan Rouhani, indicated that Iran’s Supreme National Security Council will designate Central Command, which oversees U.S. armed forces in the region, as a “terrorist organization.”

Zarif accused U.S. armed forces of “open and covert backing of terrorist groups” in the Middle East, according to a report by the state-run IRIB news channel published on its website. After the announcement he portrayed the U.S. move as an “election-eve gift” to Israeli Prime Minister Benjamin Netanyahu.

So far the Trump administration has sanctioned almost 1,000 Iranian individuals and entities as a way of further isolating the regime.

“Our designation makes clear to the world that Iran’s regime not only supports terrorist groups but engages in terrorism itself,” Secretary of State Michael Pompeo told reporters. “If you’re the general counsel for a European financial institution today there’s more risk. It is absolutely the case that the IRGC amounts to a significant piece of the Iranian economy through pure kleptocracy.”

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