After Iran deal, EU to lift sanctions on Guards’ business empire

Friday 31/07/2015
Multifaceted organisation. A 2012 file photo of Iranian Revolutionary Guard speedboats cruising past an oil tanker off the port of Bandar Abbas, southern Iran.

Washington - While persuading Iranian negotiators to accept the July 14th Vienna Agreement, and per­haps in an attempt to entice Iran’s Islamic Revolutionary Guards Corps (IRGC) not to oppose the controversial nuclear deal, the European Union has decided to lift sanctions imposed on key figures in the powerful organisation and bod­ies linked to it.
This is scheduled to happen on the so-called Transition Day, when it will be determined whether Tehran has lived up to its obligations under the landmark agreement.
The European Union will delist the IRGC leaders and companies eight years after the implementation of the nuclear deal, which, barring unforeseen circumstances, should occur within the next three months.
Apart from a handful of current and former IRGC commanders who will be delisted on Transition Day, the European Union will also lift sanctions on the financial, engineer­ing, construction, energy and trans­portation arms of the vast business empire the Guards have built up over the years through power and privi­lege.
The EU delisting of the IRGC’s financial, engineering, construction, energy and transport sector arms is bound to have serious con­sequences: The European Union in practice will be helping to perpetuate the IRGC’s dominance of Iran’s economy but also implicitly accepts the corps’ access to cash generated by its economic fronts and tolerates IRGC financing of terrorism and arm­ing proxies and allies in the Middle East region and beyond.
The European Union’s approach is also likely to have important con­sequences for the IRGC’s position in Iran’s economy and its ability to extend support to proxies and allies but those considerations do not seem to have prevented the European Union making those concessions.
In the financial sector, the Euro­pean Union will delist the IRGC Co-operative Foundation, its subsidiary Ansar Bank, and Mehr Bank, which is a subsidiary of the Basij Coopera­tive Foundation.
Established as a non-profit organ­isation under the umbrella of the IRGC in 1986, the Guards’ Co-oper­ative Foundation was meant to pro­vide interest-free loans to active duty members and veterans of the IRGC and the Basij militia that it controls.
However, since the end of the war with Iraq in 1988, IRGC Co-operative Foundation and its fronts and subsidiaries have become major players on Tehran Stock Exchange.
On September 27, 2009, front com­panies of the Co-operative Founda­tion purchased more than 50 % of the shares of Iran Telecommunica­tions in the largest trade in the his­tory of the Tehran Stock Exchange, valued at around $8 billion.
The deal was completed only after the IRGC disqualified and intimidated Pishgaman-e Kavir-e Yazd, the only genuine private-sector competitor, from participating in the bidding process.
Ansar Bank, previously known as Ansar al-Mujahideen Interest-Free Credit Institute, also started as a micro-bank providing services to IRGC and Basij members but now has 600 branches across Iran. Six million Iranians have savings accounts with it.
Mehr Bank was previously known under the names Mehr Finance and Credit Institute and Interest Free Bank of the Basij Members. Mehr Bank is itself a part of the Mehr-e Eqtesad-e Iranian Investment Com­pany, another major shareholder on the Tehran Stock Exchange.
Doubtless, EU delisting of the Guards’ financial arms in eight years’ time will enable the corps to engage in economic activities and financial transactions in Europe, including terror financing that provoked the United States to impose sanctions against those same companies in the first place, through its vast and often murky web of business enterprises that dominate so much of the Iranian economy.
On Transition Day, the European Union will also remove sanctions against the IRGC’s Khatam al-Anbia Construction Base, the largest con­tractor in Iran, and its host of sub­sidiaries. These include the Ghorb Karbala Construction Base, Sahel Consultant Engineers, Sepanir Oil and Gas Engineering Company, Iran Marine Industrial Company and Fater Engineering Institute.
In 2007 and later designations, the US Treasury identified Khatam al- Anbia and its subsidiaries as engi­neering arms of the Guards Corps “that the IRGC uses to generate income and fund its operations.” The Treas­ury also assessed the profit generated by Khatam al-Anbia and its offshoots financed the “IRGC’s illicit activities, including weapons of mass destruc­tion proliferation and support for terrorism”.
It is unclear on what grounds the EU believes that Khatam al-Anbia will not continue those activities after Transition Day eight years from now.
The European Union is also delist­ing an airline, Pouya Air, also known as Yas Air, which the US Treasury designated in 2012 for “acting for or on behalf of the IRGC-QF for trans­porting illicit cargo, including weap­ons, to Iran’s clients in the Levant”, and the major port operating firm Tidewater Middle East Company, which the US Treasury sanctioned in 2011 because it is owned by the IRGC and for allegedly engaging in illicit weapons shipments.
Again, the European Union seems to ignore the risk of these entities engaging in similar activities after the eight-year period.