America, IRGC and fate of JCPOA

ByFereydoun Khavand

New U.S. sanctions legislation against Russia, Iran, and North Korea was passed by U.S. House of Representatives on Tuesday, July 25 (the vote was 419-3). The U.S. Senate passed the same legislation, with some differences, about a month ago (on a 98-2 vote). This legislation would naturally pass the other two stages of lawmaking in the U.S. (returning to the Senate, and being signed by the U.S. president), and become the law without any obstacles.
» “Black hole of sanctions”
Here we will only deal with the case of Iran. What is conspicuous here more than anything else and can have serious consequences for Iranian Republic’s policies and economics, if it becomes the law, is the way Iranian Revolutionary Guards Corps (IRGC) and all its subsets including those in economic domains are treated.
This legislation describes IRGC’s Quds Force as the main arm of the Iranian government in implementing its policies regarding support for terrorism and rebel groups, and adds, “IRGC, and not just Quds Force, is responsible for implementing destabilizing activities, supporting international terrorist measures, and Iran’s ballistic missile program.”
If these phrases stay the same until the legislation eventually becomes the law, then IRGC and Quds Force will be in actuality considered as “terrorist organizations,” even though their names will not be seen on the list of “terrorist organizations,” prepared according to the U.S criteria.
This remarkable development, which will create many complicated issues both inside Iran and in its international relationships, has naturally not been ignored by IRGC’s senior officials and their affiliated media. A few days ago, IRGC Commander Mohammad Ali Jafari warned in this regard that if IRGC is put under sanctions by Washington, “America must close all its regional bases within 1000 kilometers of Iran.”
Kayhan newspaper, published in Tehran, goes beyond this in assessing the possible dangers of enlisting IRGC as a “terrorist organization” in its July 26 edition, and calls this the “black hole of sanctions”. Kayhan reasons as such:
“Black hole is something that draws all the close objects inside itself. This can be used to describe the above mentioned plan. Because if IRGC is enlisted as a terrorist organization, it will put a large part of the establishment –the government or other branches and institutions – in the sanction list, given that IRGC is an official organization and has a regular relationship with governmental and non-governmental organizations. This will act as a black hole, and will unpredictably put sanctions on many institutes. It even imaginable that the Central Bank, whose sanction was lifted due to JCPOA, will return to the sanction list.”
Today, IRGC’s comprehensive presence in Iran’s economy is universally acknowledged. Many companies affiliated with this organization are present in various sectors of the country’s economy – from construction activities to oil and gas, Telecom, transportation, import and export, pharmaceutical productions, tourism, etc. And their assets are estimated at several hundreds of billions of dollars.
» Necessity of “Self-Sanctioning”
The foreign companies that come for investment to Iran can hardly avoid coming in touch with businesses that are under IRGC. Currently, many institutes and businesses affiliated with IRGC are under sanction, which is one of the reasons why European financial institutes are very cautious in their relationships with Iran.
We know that none of the big European banks have participated in financing investments in Iran because they are afraid of U.S. punishments and don’t want to be dragged into a transaction with companies under sanctions. Now if IRGC is going to be considered as a “terrorist organization”, Europeans will be naturally much more cautious in their relationships with Iran.
Tuesday night, immediately after passing of sanctions legislation by U.S. House, the list of French companies that can face new waves of difficulties in Iran was published in some French media, and it included Citroen, Peugeot, Renault (car making), Total (oil and gas), Alstom (rail transportation), French airports (airport building and infrastructure), Vansi (building), Airbus (aircraft manufacturer), etc.
If IRGC is officially designated as a “terrorist organization”, or is designated as the arm of Iranian Republic’s government in terrorist activities in the new U.S. sanctions legislation, Iranian banks will have to disconnect their ties with economic institutes affiliated with IRGC.
“Self-sanctioning” that Kayhan is talking about has happened before. If Iranian banks want to reintegrate themselves and resolve their issues in relation with foreign banks, they have to implement international banking laws such as fighting money-laundering and financing terrorism. That was why Sepah and Mellat Banks put Khatam al-Anbiya Headquarters under sanctions. This “self-sanctioning” was so controversial that eventually, the Central Bank had to mediate in this regard. But if IRGC is considered as a “terrorist organization”, will Iranian banks keep their relationships with this institute? And if so, will they be able to have transactions with valid banks in the world?
What has been said so far would bring up the fate of JCPOA, which was signed a little more than 2 years ago. In relation to this international document which ended the crisis over Iran’s nuclear case, these questions can be posed: Wouldn’t intensification of none-JCPOA sanctions such as the legislation passed by U.S. House on July 25 make JCPOA useless? In a word, isn’t Iran going back to pre-JCPOA period?
The answer to the recent question is negative. The most significant factor in the success of sanctions that were put against Iran was the close unity which existed in its implementation between EU and the U.S. Currently, no such unity exists. Europeans, unlike Americans, are committed to JCPOA and welcome Iran’s return to the international community. Unlike Americans, Europeans do not consider Iran as the leader of terrorists in the world, and regulate their strategy about Iran according to distinctions between reformists against totalitarian factions.
Under these conditions, Washington has abandoned the theory of discarding and tearing JCPOA, which was what Donald Trump and his colleagues had once in mind. Instead, America questions the lack of Iran’s commitment to the “spirit of JCPOA”, reasoning that the Iranian Republic, after signing the nuclear agreement, has continued its former policies against the interests of the West in the region.
In fact, the White House knows that significant members of EU are not ready to question JCPOA, but have objections to Iran’s role in Iraq, Syria, Lebanon, and Yemen, and this can be the foundation of their reunification with America against Iran’s regional policies. Hitting IRGC and weakening it is done with the same goal.
Translated Piece: Radio Farda

Opinions in this article reflect the writer’s point of view, not necessarily the view of The Arabain GCIS

Fereydoun Khavand
Fereydoun Khavand
Economic Analyst