The Takeaway: Trump's revenge as Biden deal with Iran stymied by IRGC sanctions

Leading the news: Terrorist designation of Revolutionary Guards at issue

The United States and Iran have never been closer to an agreement to revive the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, even as US Secretary of State Antony Blinken said today that he is “not overly optimistic” it will get done.

But whether the parties to the agreement can reach a signing ceremony in Vienna may hinge on a so-far-elusive solution to a legacy policy of the Trump administration: the designation of the Islamic Revolutionary Guard Corps (IRGC) in Iran as a Foreign Terrorist Organization (FTO).

Background

• One year ago this week, the Biden administration began indirect negotiations in Vienna to restore “compliance for compliance” with the JCPOA, first agreed upon in 2015 by the United States, the UK, France, Germany, Russia, China and Iran, as well as the EU. The core of the deal is sanctions relief for Iran in return for restraints on Iran’s nuclear programs.
• The Trump administration unilaterally withdrew from the deal in 2018, threatening sanctions on countries and companies doing business with Iran — an “us or them” approach — thereby squashing the economic gains of the JCPOA for Iran. In return, Iran expanded its nuclear programs beyond the constraints of the agreement.
•  In April 2019, the Trump administration designated the IRGC as an FTO, expanding already existing penalties for US persons and entities that deal with the IRGC. See the CRS report by Ken Katzman on Iran sanctions here.

Politics trumps compromise

• The US designation of the IRGC as an FTO carries more bark than bite, given that there are other US sanctions on the IRGC and affiliated entities, and that such a designation is unlikely to trip up much of the sanctions relief and investment Iran would receive from the JCPOA. Indeed, both Washington and Tehran seemed to have been preparing their capitals for a compromise:
  • US Iran Envoy Rob Malley said on March 27 that if the IRGC is de-listed as an FTO, other sanctions will remain "no matter what happens." In other words, no US or European company is likely to line up for business with the IRGC.
  • The next day, Iran Foreign Minister Hossein Amir-Abdollahian said IRGC officials told him that if the negotiations were stuck over sanctions on the IRGC, negotiators “should choose the interests of the country” and not allow that to become an obstacle.
• But the politics on both sides have proven raw and complicating — and more so by the day.
  • After backlash from conservative critics and hard-line parliamentarians, Amir-Abdollahian said there was an “incorrect understanding” of his interview and wrote that “the red lines (re: the IRGC) will be fully observed.”
  • In Washington, some Democrats have joined most or all Republicans to oppose an Iran nuclear deal, including a de-listing of the IRGC. An agreement would face a contentious review by Congress via the Iran Nuclear Agreement Review Act, but there is almost no chance of stopping the deal.

Iran not giving up on revenge for Soleimani …

• The Biden administration was ready to de-list the IRGC if Iran would agree not to target Americans implicated in the killing of IRGC-Quds Force Commander Qasem Soleimani by a US armed drone in January 2020.
• The US Justice Department is reportedly investigating an IRGC plot to kill former US national security adviser John Bolton and Secretary of State Mike Pompeo.
• “It is politically impossible for the Iranians to publicly close the file on taking revenge for Soleimani,” Ali Vaez of the International Crisis Group told Al-Monitor. “That proposal has been rejected by the Iranians. Iran has come up with a counterproposal that the US is now considering.”

Time running out

Both Washington and Tehran appear ready to sign — except for the IRGC, and the parties seem to be running out of ideas on a workaround.

• “I think both sides probably calculated, let’s put this at the very end and once the other side has gotten almost everything it wants, then it’s going to be more flexible and more reasonable,” said Trita Parsi of the Quincy Institute. “But so far that doesn’t seem to have played out the way either side anticipated.” 

EU Deputy Secretary-General Enrique Mora has been the man in the middle, shuttling between capitals, and Blinken and Malley are in Brussels today to meet with EU counterparts.

• “The Raisi administration and the national security apparatus in Iran believe that they need to have the IRGC’s buy-in in order to secure and sustain the deal,” says Vaez. “And that requires giving the IRGC something. … If indeed the FTO designation is not lifted, the IRGC is one of the only entities in Iran that will almost gain nothing out of a restored JCPOA.”

Linkage: A signal from Yemen? In a phone call with UN Secretary-General Antonio Guterres on April 3, Amir-Abdollahian expressed support for the UN-brokered cease-fire in Yemen. Iran likes to claim a healthy distance from the Houthis, but no attacks, or cease-fires, happen without the go-ahead in Tehran. If timing is everything, the Yemen truce might also be a sign, as it comes in what may be the closing days or weeks of the Iran talks, and amidst US, Israeli and other concerns about Iran’s policies in the region.

From our regional correspondents:

1. Russia, Syria escalate attacks under distraction of Ukraine

Fighting between pro-government and opposition forces in Syria’s northwestern province of Idlib has escalated in the shadow of Russia’s invasion of Ukraine. While a local source close to the government said there are so far no indications that a renewed military operation in Idlib is imminent, the region is nonetheless on edge. On Monday, Syrian regime artillery killed four children in the town of Maaret al-Naasan as Russia carried out a series of air raids in Idlib’s southern countryside. Turkish-backed rebel factions and Hayat Tahrir al-Sham (HTS), the powerful militant group that controls Idlib, retaliated by shelling the regime’s local headquarters and gathering points. Khaled al-Khateb reports that Russia may be trying to compensate for its losses in Ukraine with increased attacks in Syria.

2. Turkish inflation hits 20-year high amid Ukraine war 

Turkey’s annual consumer inflation jumped to a new two-decade high of 61.1% in March, a hike partly fueled by the commodity shock of Russia’s invasion of Ukraine. The war has caused problems in the supply of imported goods such as sunflower oil, which helped drive up food prices in Turkey by 4.7% last month. The price of diesel rose by an unprecedented 32%. 

President Recep Tayyip Erdogan, who is seeking re-election in 2023, has refused to raise interest rates to control inflation. “With Erdogan counting on economic growth to boost his electoral fortunes, his government has shown little intention of enacting deflationist measures to cool the economy,” writes Mustafa Sonmez. Keep reading for more on why the soaring inflation is bad news for Erdogan politically.

3. Iran-linked mob targets Kurdish party office 

An angry mob’s recent attack on the Baghdad office of a prominent Kurdish political party has added to the tensions stoked by Iran-linked factions in Iraq. On March 28, the Kurdistan Democratic Party’s office was ransacked and possibly looted by a mob of Iran-linked militias. Shelly Kittleson writes there was “so much damage to both the KDP office in Baghdad and public trust in the ability of the security forces to prevent such violence that the KDP decided simply to demolish the office and suspend its activities in the Iraqi capital.” The attack comes after months of threats and violence targeting the Kurdistan Region of Iraq and specifically the KDP. 

4. New generation runs for office in Lebanon 

A record number of women and young people are running in Lebanon’s May parliamentary elections, in what will mark the first nationwide ballot since the anti-government protests that swept the small Mediterranean country in 2019. Of the 1,043 registered candidates, 155 are women and 88 are between the ages of 25 and 35. The election comes as Lebanon faces its worst economic crisis in its modern history, marked by a plunging currency, rising inflation, and severe fuel and medicine shortages. Hanan Hamdan spoke with young candidates, including a 26-year-old biomedical engineer who said “the current economic crisis has destroyed our future as young people, and we have to do something about it.”

5. Egypt rallies climate consensus ahead of COP27 

Egypt has intensified climate policy discussions with African countries ahead of the COP27 climate conference in November, writes Ahmed Gomaa. Most recently, President Abdel Fattah al-Sisi hosted Congo’s Environment Minister Eve Masudi for talks on March 29. Last month, Egyptian Petroleum and Mineral Resources Minister Tarek el-Molla announced that the African Union will launch an Egyptian-led renewable energy initiative during the summit. Experts say urgent action is needed to combat climate change in Africa, where a warming of more than 2 degrees Celsius would mean a loss of 5% of gross domestic product each year by 2030. 

Multimedia this week: Israeli terror attacks, US-Saudi relations, Middle East architecture 

Listen: Following the recent wave of terror attacks in Israel, Ben Caspit and counterterrorism expert Boaz Ganor discuss how improved intelligence-gathering could help thwart future attacks. 

Listen: Andrew Parasiliti interviews Gulf Research Center chairman Abdulaziz Sager about challenges to the US-Saudi relationship, as well as the IRGC’s potential de-listing as a Foreign Terrorist Organization. 

Watch: Check out the latest episode of "Reading the Middle East with Gilles Kepel," where he interviews renowned French architect Jean Nouvel about his experience designing world-famous buildings throughout the Middle East.