The IRGC’s Sanctions Relief Bonanza

The European Union is slated to delist the Islamic Revolutionary Guards Corps (IRGC), its commanders, and dozens of its commercial entities within the next eight years, pursuant to the nuclear deal.  Washington has downplayed this, noting that the agreement only grants relief for nuclear-related sanctions, and that the IRGC will benefit minimally if at all, noting that IRGC entities will remain under U.S. sanctions even after the EU has delisted them. But what Washington and Brussels fail to note is that the lifting of U.S. and EU sanctions against Iran’s economy will enable public bidding for contracts by IRGC companies – especially those that have remained under the U.S. radar.

Over the years, U.S. and EU sanctions have jointly targeted only a few dozen companies linked to the IRGC. These firms do not include all publicly traded companies where the IRGC has a controlling or minority stake, or private companies where the Guards have either majority ownership or appoint the majority of the board. There are more than a hundred such companies, most of which stand to benefit significantly from sanctions relief.

And it will only get better for the Guards. Eight years after the deal’s implementation, the EU will delist companies like the IRGC Cooperative Foundation (the Guards’ financial and investment arm) and Tidewater Middle East (the Guards’ branch that operates Iran’s ports).

Khatam al-Anbia, the IRGC construction giant, which is probably Iran’s largest firm outright, is also set to be delisted after eight years. Khatam al-Anbia employs over 135,000 people, works with over 5,000 contractors and has over 800 reported subsidiaries active in Iran’s construction sector. Among its projects: 51 contracts with the oil ministry  worth more than $17 billion; the $2-billion Bakhtiari Dam, slated to be the tallest in the world; the $3-billion “shrine-to-shrine” highway connecting Qom and Mashad; Tehran metro line 7, part of a $7 billion metro expansion program currently underway;  a $7 billion special cooperation contract with the city of Tehran; a $400 million contract to build Mashhad metro line 3; and the $1.3 billion NGL 3200 construction project in the West Karoun oil fields.

While there is disagreement over how Iran might use its sanctions relief to enrich its terror proxies, the administration openly acknowledges that lifting sanctions will give a massive boost to Iran’s public spending on infrastructure. IRGC companies are the ones to cash in, accumulating the resources that the Guards need to fund its military objectives, both inside the country and abroad.

Emanuele Ottolenghi is a Senior Fellow at Foundation for Defense of Democracies where Saeed Ghasseminejad is an Associate Fellow. Follow them on Twitter @eottolenghi and @SGhasseminejad