Do business with the Revolutionary Guards at your peril

New US sanctions on the malign organization that is Iran’s political and economic backbone will have profound implications for the regime.

IT is a historic development. In one of the most critical moves since the establishment of the Iranian regime in 1979, President Donald Trump has instructed the US Treasury Department to impose new sanctions on the Islamic Revolutionary Guard Corps (IRGC) because of its support for terrorism.

This stops just short of designating the IRGC a terrorist organization, but it will nevertheless have significant and serious legal, political and economic implications on companies, governments and individuals who deal with the Iranian regime.

The IRGC is the backbone of the regime. It controls significant sections of Iran’s economic and ideological centers. The senior cadres of the IRGC enjoy the final say in Tehran’s domestic foreign policy and support for proxies. The IRGC is also engaged in domestic repression of dissidents, suppression of freedom of speech, press and assembly, and the imprisonment of opponents.

According to Amnesty International and Human Rights Watch reports, Iran has the highest number of executions in the world. The human rights violations increased under the presidency of the so-called “moderate” Hassan Rouhani. Many Iranians view the imposition of new sanctions as positive news, particularly for those who are suffering under the iron rule of the IRGC and the ruling clerics. The Iranian regime is also listed as the top state sponsor of terrorism.

The IRGC has been responsible for brutal repression and thousands of killings inside Iran, for sponsoring terrorism in the region and for supporting Bashar Assad in Syria, Houthis in Yemen, Shiite militias in Iraq, and Hezbollah in Lebanon.

In Europe – due to the enormous trade interests of some big countries and the EU’s improving relations with the Iranian regime – governments may lean towards ignoring the Iranian regime’s interventionist and aggressive policy. However, now that the IRGC is the subject of tough new US Treasury sanctions, European companies trading with Iran will risk financial penalties from the US, because the IRGC runs most of Iran’s economy.

Any company dealing with the Iranian regime should now be extremely cautious. Freezing the IRGC out of the US financial system means that any country, organization or individual that politically, militarily, tactically, strategically, financially or economically deals with the IRGC is taking an enormous risk.

More importantly, it is worth noting that almost every major transaction with the Iranian regime is conducted through the IRGC directly or indirectly, because it has the largest stake in Iran’s economy and political affairs.

The US Congress may now follow up with further sanctions against Iranian leaders.

More powerful acts and policies that are possibilities would be sanctioning third parties that deal with the Iranian regime and its organizations, including the IRGC.

In March of this year, the Washington office of the Iranian opposition National Council of Resistance of Iran released a 175-page book entitled “The Rise of the Revolutionary Guards Corps Financial Empire,” in which it demonstrated that the IRGC controls more than half of Iran’s GDP and owns several major economic powerhouses and religious endowments. In June, the group published a book on 15 terrorist training centers in Iran, where the IRGC provides ideological, military and tactical training to foreign recruits, who are later dispatched to countries in the Middle East region and beyond to conduct terrorist activities.

The new sanctions on the IRGC will have serious legal and political implications on dealing with the IRGC and the Iranian regime for every individual, entity, organization, or government.

The next step for the US government is to enforce inspection of Iran’s military sites regarding nuclear developments, and to sanction non-US parties dealing with the IRGC and the Iranian regime. This would be the biggest blow to the Iranian regime and its pursuit of regional domination. It will empower the Iranian people and the opposition.

Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. He is a leading expert on Iran and US foreign policy, a businessman and president of the International American Council. Twitter: @Dr_Rafizadeh

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