Reports indicate that the Trump administration is considering the promulgation of an Executive Order that would direct the Secretary of State to designate the Islamic Revolutionary Guard Corps (IRGC) – a branch of Iran’s armed forces – a Foreign Terrorist Organization (FTO) pursuant to Section 219 of the Immigration and Nationality Act (INA). As the Washington Post notes, it would be the first time that the United States has designated an official military unit of a foreign state as a Foreign Terrorist Organization. Due to this and other factors, Pentagon and intelligence officials are pushing back on the issuance of the Executive Order, warning that designating the IRGC an FTO and escalating tensions with Iran at this time could have serious consequences for U.S. interests in the Persian Gulf region.
Despite the seriousness of the debate at hand, most reports have failed to appreciate the sanctions consequences of an FTO designation, as well as the substantial sanctions authorities under which the IRGC is targeted at present. Policymakers and the public will require an accurate understanding of the legal implications of an FTO designation in order to factor this into deciding whether an FTO designation is merited in the case of the IRGC. (NOTE: The following does not provide a full detail of current sanctions imposed on the IRGC.)
What is an FTO designation?
Section 219 of the Immigration and Nationality Act authorizes the Secretary of State to designate an organization as a terrorist organization if the Secretary finds that (1) the organization is a foreign organization; (2) the organization engages in terrorist activity; or (3) the terrorist activity of the foreign organization threatens the national security of the United States or the security of U.S. nationals.
Such a designation carries with it distinct sanctions implications. Specifically, U.S. financial institutions are required to block all transactions involving assets of an FTO within their possession or under their control. Moreover, representatives or members of an FTO are barred from admission to the United States and can be made removable from the United States if present. Finally, and perhaps most importantly, 18 U.S.C. § 2339B renders it unlawful for persons to knowingly provide ‘material support or resources’ to a designated FTO, which includes, but is not necessarily limited to, currency or monetary instruments, financial services, lodging, training, expert advice or assistance, safe-houses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel, and transportation. Violations of this latter law are subject to civil and criminal penalties, including imprisonment for not more than 20 years (or even for life if death results from the offense). Most critically, 18 U.S.C. § 2339B provides for extraterritorial jurisdiction – meaning, that the conduct of non-U.S. persons taking place outside of the United States can – in certain circumstances – be civilly and criminally penalized in the courts of the United States. That constitutes the most significant sanction on dealings with designated FTOs.
Is the IRGC currently subject to U.S. sanctions?
The IRGC is designated under a number of U.S. sanctions programs administered by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). For instance, acting pursuant to Executive Order 13382, the State Department designated the IRGC for its involvement in Iran’s development of ballistic missiles capable of carrying nuclear warheads. According to the designation notice, the IRGC had “attempted, as recently as 2006, to procure sophisticated and costly equipment that could be used to support Iran’s ballistic missile and nuclear programs.” At the same time, OFAC designated the IRGC-Qods Force – the elite special forces branch of the IRGC – a Specially Designated Global Terrorist pursuant to Executive Order 13224 for its provision of material support to the Taliban, Hezbollah, Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC). In other words, the IRGC’s initial sanctions designation was tied to its support for Iran’s nuclear program and development of ballistic missiles, while OFAC chose to limit its use of the SDGT designation to a branch of the IRGC – the Qods Force.
On July 1, 2010, Congress enacted the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”) – Section 104(c) of which threatened to cut off foreign financial institutions’ access to the U.S. financial system for facilitating a significant transaction or providing significant financial services for the IRGC or any of the IRGC’s agents or affiliates whose property or interests in property are blocked pursuant to IEEPA (the International Emergency Economic Powers Act). In doing so, the IRGC’s access to the global financial system was effectively severed, as foreign banks withdrew from engagement in transactions involving the IRGC or its agents or affiliates.
OFAC took additional steps to sanction the IRGC when it designated the group under Executive Order 13553 for its responsibility for the serious human rights abuses that occurred in Iran since the June 2009 election. Pursuant to Executive Order 13553, any property in the United States or within the possession or control of a U.S. person, wherever located, in which the IRGC holds an interest is blocked – a sanction that is duplicative of that imposed pursuant to Executive Order 13382. Executive Order 13553, however, does also subject the IRGC and all of its member to travel restrictions to the United States.
Soon thereafter, the President issued Executive Order 13606, which targeted persons determined to have operated, or to have directed the operation of, information and communications technology that facilitates computer or network disruption, monitoring, or tracking that could assist in or enable human rights abuses by or on behalf of the Government of Syria or the Government of Iran. The Order instituted sanctions against the IRGC for its suppression of online information and its role in identifying and arresting protestors involved in the post-election unrest in 2009. Similar to the previous Orders, Executive Order 13606 blocks all property and interests in property by the IRGC held in the United States or within the possession or control of a U.S. person, wherever located, and prohibits U.S. persons from engaging in transactions with the IRGC.
In 2012, Congress enacted the Iran Threat Reduction Act (“TRA”), which imposed additional secondary sanctions on the IRGC. For instance, the Section 302(a) of the TRA imposed menu-based sanctions on non-U.S. persons who materially assist, sponsor, or provide financial, material, or technological support for, or goods or services in support of, the IRGC or any of its officials, agents, or affiliates blocked pursuant to IEEP, as well as non-U.S. persons that engage in significant transactions with the same. In doing so, the TRA effectively severed the IRGC’s commercial relations with the outside world, as non-U.S. persons engaged in transactions with the IRGC or its agents or affiliates blocked pursuant to IEEPA could be subject to bruising U.S. sanctions.
How does an FTO Designation Weigh against What’s Already on the Books?
In some ways, an FTO designation is a much lighter sentence for the IRGC than those sanctions authorities under which the IRGC is currently sanctioned. For instance, an FTO designation requires U.S. banks to block all assets in which the IRGC holds an interest, yet U.S. banks have been doing so ever since OFAC designated the IRGC under Executive Order 13382. Statutory authorities like CISADA and the TRA have severed the IRGC’s commercial relations with the outside world, as foreign banks are prohibited from providing financial services to the IRGC or its agents or affiliates and non-U.S. parties are restricted in their ability to commercially engage the IRGC or its agents or affiliates. Designating the IRGC an FTO would not impose the same kind of limitations on the IRGC’s commercial engagement.
However, an FTO designation does have one significant advantage over these other sanctions authorities: an FTO designation provides extraterritorial criminal jurisdiction if a person provides “material support” to a designated FTO in violation of 18 U.S.C. § 2339B. While CISADA and the TRA impose sanctions on foreign parties engaged in certain dealings with the IRGC, neither statute threatens to impose criminal penalties against foreign sanctions violators. Some foreign parties might view the threat of criminal liabilities to be a higher price to pay than being severed from the U.S. financial system. As such, to the extent that foreign parties are engaged in trade with the IRGC or its agents or affiliates, an FTO designation could pose an additional risk to such parties.