Dozens of companies tied to Iran’s elite Revolutionary Guards, a military force commanding a powerful industrial empire with huge political influence, will win sanctions relief under a nuclear deal agreed with world powers.
The development is likely to anger critics of the accord, not least in the United States and Israel, but may be welcomed by Iranians eager for Iran to reopen to the outside world. The Islamic Revolutionary Guards Corps (IRGC) will act for Western firms in many ways as a gatekeeper to some of the most lucrative areas of Iran’s economy.
Such is the clout of companies with ties to the IRGC, which sees itself as the defender of Iran’s Islamic revolutionary ideals and bulwark against US influence, that their release from financial curbs could of itself help ease return of swathes of the economy to the mainstream of world trade.
The process is complex and will unfold in stages, with some firms obliged to wait eight years for sanctions relief and others who can expect no concession even then from Washington, a reflection of concerns over activities beyond Iran’s borders.
Among the latter is the IRGC’s construction arm Khatam al Anbia, controlling at least 812 affiliated companies worth billions of dollars and deemed by Washington “proliferators of weapons of mass destruction.”
The European Union will delist the company for sanctions in eight years, while the United States will maintain its measures against the firm. Foreign businessmen must gauge at that time to what extent they can trade with such partners without themselves inviting US measures.
In all, about 90 current and former IRGC officials, entities such as the IRGC itself, and firms that conducted transactions for the Guards will be taken off nuclear sanctions lists by either the United States, EU or United Nations, according to a Reuters tally based on annexes to the text of the nuclear deal.
Any IRGC companies delisted at the implementation stage would be able to “move money through global banks, access the SWIFT financial system, obtain and extend credit,” among other activities, said Mark Dubowitz, executive director of the Foundation for Defense of Democracies. They could also get the backing of European export financing.
Most IRGC entities such as the elite Quds force, which carries out overseas operations, and Guards’ airforce and missile command will not be de-listed by the EU until the second phase in some eight years. But all will remain then under US sanction for “terrorism support activities” or as “proliferators of weapons of mass destruction.”
Iran denies any involvement in terrorism.
The benefits that will accrue to the Guards, its recent annual turnover from all business activities estimated at around $10-12 billion by one Western diplomat, have been the focus of much of the outrage in US Congress over the deal.
Western critics say the deal does not in any case go far enough to ensure Iran will never be able to develop a nuclear weapon - an ambition Iran denies. Republicans in Congress, and some Democrats, are pursuing a motion to scrap the deal.
Business interests
Dozens of smaller companies linked to the Guards, some of which are directly involved in the purchase or manufacture of military materiel, are also scheduled for sanctions relief.
Among those is the Iran Aircraft Manufacturing Company, which builds military aircraft and unmanned aerial vehicles, and Marine Industries, responsible for marine military acquisitions for both the IRGC and Iran’s navy, according to the US Treasury. The EU will lift sanctions in about eight years while the United States will retain them.
Under sanctions, the Guards were still able to thrive by controlling the smuggling of banned goods across the Gulf and from neighboring countries, experts claim.
So widespread are IRGC business interests that providing significant sanctions relief in Iran may be hard without relaxing restrictions on some key companies to some degree.
“Without delisting certain parties on implementation day –some of the banks or oil-related companies, for example –sanctions relief would have been hard,” said Zachary Goldman, a former adviser at the US Treasury and now at New York University’s Center on Law and Security.
Now, the Guards will be able to lever their dominance in Iran’s economy to serve as a conduit for the new business flowing into Iran, and will likely demand joint ventures, shared profits, and other benefits from companies seeking to access Iran’s lucrative markets, Dubowitz said.
“Any company that wants to do business in a key strategic sector of Iran’s economy will have to do business with the Revolutionary Guards,” he said.
The Obama administration has sought to play down benefits potentially accruing to the Guards from the deal, which eases sanctions in return for curbs on Iran’s nuclear programme.