The U.S., the Revolutionary Guard, and the Fate of the JCPOA

A new U.S. sanctions bill against Russia, Iran, and North Korea was passed by the House of Representatives on the night of July 25 with 419 votes in favor and 3 against. This bill had previously been approved in the Senate about a month earlier with 98 votes in favor and 2 against. The text must pass through two more legislative stages (return to the Senate and presidential signature) to become law. Here, we will focus solely on the case of Iran. What stands out in this bill, which could have very heavy consequences for both the politics and economy of the Islamic Republic if it becomes law, is how it addresses the Islamic Revolutionary Guard Corps (IRGC) and all its subunits, including in the economic sphere. The bill describes the IRGC Quds Force as the main arm of the Iranian government in implementing its policies in support of terrorism and insurgent groups and adds: 'The Islamic Revolutionary Guard Corps, and not just the Quds Force, is responsible for executing destabilizing activities, supporting international terrorism, and Iran's ballistic missile program.' If these phrases remain unchanged until the bill is finally enacted into law, the IRGC and the Quds Force will effectively be considered 'terrorist organizations,' even though their names do not appear on the list of 'terrorist organizations' compiled based on U.S. criteria. This significant development, which creates very complex issues both within Iran and in the country's international relations, has certainly not gone unnoticed by senior IRGC officials and the media close to them. A few days ago, Mohammad Ali Jafari, the commander of the IRGC, warned regarding this outlook that if the IRGC is sanctioned by Washington, 'the U.S. must gather its regional bases up to a thousand kilometers around Iran.' The Tehran-based newspaper 'Kayhan' goes further in assessing the potential consequences of the IRGC being placed on the 'terrorist organizations' list, describing the bill as a 'black hole of sanctions.' 'Kayhan' explains the choice of this term: 'A black hole is something that pulls all nearby objects into itself. This is the situation that can be described in terms of sanctions for the aforementioned bill. Because if the Islamic Revolutionary Guard Corps is placed on the list of terrorist organizations, given that the IRGC is an official entity with systematic relations with governmental and non-governmental structures, it will cause a large part of the governance, including the government and other powers and institutions, to fall into the sanctions list. This event acts like a black hole and sanctions many institutions that are unpredictable. It is even conceivable that the Central Bank, which was removed from sanctions under the JCPOA, could be returned to the sanctions list.' 'Kayhan' is not mistaken in its assessment of the consequences of the IRGC's name being placed on the 'terrorist organizations' list from the U.S. perspective. Even if the IRGC's name is not officially included in the desired list, the phrases used in the sanctions bill, if enacted into law, will more or less yield the same legal results. The IRGC's comprehensive presence in Iran's economy is now a well-known phenomenon internationally. Numerous companies affiliated with the subunits of this entity are present in various sectors of the country's economy, from construction activities to oil and gas, telecommunications, transportation, imports and exports, pharmaceuticals, tourism, etc., and their total assets are estimated to be several hundred billion dollars. The necessity of 'self-sanctioning' foreign companies that come to invest in Iran makes it difficult for them to avoid contact with the IRGC-controlled enterprises. Currently, many institutions and businesses affiliated with the IRGC are under U.S. sanctions, and this is one of the factors of the severe caution that European financial institutions show regarding Iran. We know that none of the major European banks have participated in financing investments in Iran, partly because they do not want to risk being drawn into transactions with sanctioned companies out of fear of U.S. penalties. Now, if the IRGC is to be considered a 'terrorist organization,' European caution regarding Iran will naturally intensify. Immediately after the sanctions bill was passed by the U.S. House of Representatives on Tuesday night, a list of French companies that could face a new wave of difficulties in Iran was published in several French media outlets, including names like Citroën, Peugeot, and Renault (automobile manufacturing), Total (oil and gas), Alstom (rail transport), Bouygues and Paris Airports (construction and airport infrastructure), Vinci (construction), Airbus (aircraft manufacturing), etc. If the IRGC is officially placed on the 'terrorist organizations' list or is introduced in the new U.S. sanctions text as the arm of the Islamic Republic in carrying out terrorist activities, Iranian banks will also be forced to cut their relations with the economic entities affiliated with the IRGC. In this regard, 'Kayhan' is not mistaken when it writes that one of the goals of the sanctions bill is to intensify the phenomenon of 'self-sanctioning' within Iran: 'That is, the U.S. wants to weaken the connections of internal institutions, such as banking relations, with the IRGC by creating a terrifying atmosphere around revolutionary institutions like the IRGC.' The 'self-sanctioning' that 'Kayhan' refers to has already occurred. If Iranian banks want to sort out their situation and resolve their problems with foreign banks, they must implement international banking laws, including anti-money laundering and counter-terrorism financing. This is why two banks, Sepah and Mellat, sanctioned the 'Khatam al-Anbia' headquarters. This 'self-sanctioning' caused a scandal, to the point that the Central Bank had to intervene to put an end to it. But if the IRGC is considered a 'terrorist organization,' will Iranian banks be able to maintain their relations with this institution, and if they do, will they be able to engage with reputable banks worldwide? What has been said so far raises the fate of the JCPOA, which is just over two years since its signing. In relation to this international text, which ended the crisis over Iran's nuclear file, questions arise today: Will the intensification of non-JCPOA sanctions, such as the bill passed by the House of Representatives on Tuesday, turn the JCPOA into a toothless entity? In short, is Iran returning to the pre-JCPOA era? The answer to the latter question is negative. The most important factor in the success of the sanctions imposed against Iran was the close unity that existed in their implementation between the European Union and the U.S. Currently, this unity does not exist. Europeans, unlike Americans, adhere to the JCPOA and welcome Iran's return to the international community. They do not see Iran as the world's leading terrorist and structure their strategy regarding Iran based on the distinction between the reformist faction and the hardline factions. In this context, Washington has abandoned the theory of discarding and tearing up the JCPOA, which was once favored by Donald Trump and his close associates. Instead, the U.S. argues that Iran is not loyal to the 'essence of the JCPOA,' claiming that the Islamic Republic has continued its previous policies against Western interests in its surrounding regions after signing this agreement. In fact, the White House knows that key members of the European Union are unwilling to question the JCPOA, but they are concerned about Iran's role in Iraq, Syria, Lebanon, and Yemen, and this could form the basis for their renewed unity with the U.S. against Iran's regional policy. Striking at the IRGC and weakening it is carried out with this goal in mind.