The Bush administration has decided to label Iran's Revolutionary Guard as a "specially designated global terrorist."  --  The designation, described Wednesday by the Washington Post (citing unnamed "U.S. officials") as an "initial decision"[1] and by the New York Times (citing unnamed "senior administration officials") as part of "current plans" that might still be altered [2], will be taken under Executive Order 13224, issued after September 11 to give the U.S. new means to obstruct terrorist funding.  --  There is no precedent for designating a national military as a terrorist organization.  --  Robin Wright of the Washington Post indicated that the many businesses owned or controlled by the Revolutionary Guard seems to be this move's main target, but Helene Cooper and Jim Rutenberg of the New York Times noted:  "Because Iran has done little business with the United States in more than two decades, the larger point of the designation would be to heighten the political and psychological pressure on Iran, administration officials said, by using the designation to persuade foreign governments and financial institutions to cut ties with Iranian businesses and individuals."  --  Both the Washington Post and the New York Times put the size of the Revolutionary Guard at 125,000, but the Financial Times estimated its size as 250,000.[3]  --  The piece in the Financial Times (also picked up by MSNBC) quoted an Iran expert at the Eurasia Group who attributed the move to the administration being "outflanked on the right" in Congress.  --  Demetri Sevastopulo and Gareth Smyth took a critical tone, and quoted Ray Takeyh saying that "the move 'reflected the incoherence of Iran policy' in the administration, and question[ing] how the U.S. could expect to hold constructive negotiations with Tehran while designating part of the regime as a terrorist organization."  --  (The Post also quoted Takeyh, but omitted his criticism.)  --  The Financial Times added:  "Mr. Takeyh said the U.S. would have difficulty imposing sanctions because the administration does not have the necessary data to determine which Iranian companies are associated with the Revolutionary Guard," a point made by neither the Post nor the Times.  --  Bloomberg News quoted an unnamed "U.S. official" who confirmed the news of the impending designation, and added that Iran had dismissed the news as "propaganda."[4] ...

1.

Nation

IRANIAN UNIT TO BE LABELED 'TERRORIST'
By Robin Wright

** U.S. Moving Against Revolutionary Guard **

Washington Post
August 15, 2007

http://www.washingtonpost.com/wp-dyn/content/article/2007/08/14/AR2007081401662.html

The United States has decided to designate Iran's Revolutionary Guard Corps, the country's 125,000-strong elite military branch, as a "specially designated global terrorist," according to U.S. officials, a move that allows Washington to target the group's business operations and finances.

The Bush administration has chosen to move against the Revolutionary Guard Corps because of what U.S. officials have described as its growing involvement in Iraq and Afghanistan as well as its support for extremists throughout the Middle East, the sources said. The decision follows congressional pressure on the administration to toughen its stance against Tehran, as well as U.S. frustration with the ineffectiveness of U.N. resolutions against Iran's nuclear program, officials said.

The designation of the Revolutionary Guard will be made under Executive Order 13224, which President Bush signed two weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding. It authorizes the United States to identify individuals, businesses, charities and extremist groups engaged in terrorist activities. The Revolutionary Guard would be the first national military branch included on the list, U.S. officials said -- a highly unusual move because it is part of a government, rather than a typical non-state terrorist organization.

The order allows the United States to block the assets of terrorists and to disrupt operations by foreign businesses that "provide support, services or assistance to, or otherwise associate with, terrorists."

The move reflects escalating tensions between Washington and Tehran over issues including Iraq and Iran's nuclear ambitions. Iran has been on the State Department's list of state sponsors of terrorism since 1984, but in May the two countries began their first formal one-on-one dialogue in 28 years with a meeting of diplomats in Baghdad.

The main goal of the new designation is to clamp down on the Revolutionary Guard's vast business network, as well as on foreign companies conducting business linked to the military unit and its personnel. The administration plans to list many of the Revolutionary Guard's financial operations.

"Anyone doing business with these people will have to reevaluate their actions immediately," said a U.S. official familiar with the plan who spoke on the condition of anonymity because the decision has not been announced. "It increases the risks of people who have until now ignored the growing list of sanctions against the Iranians. It makes clear to everyone who the IRGC and their related businesses really are. It removes the excuses for doing business with these people."

For weeks, the Bush administration has been debating whether to target the Revolutionary Guard Corps in full, or only its Quds Force wing, which U.S. officials have linked to the growing flow of explosives, roadside bombs, rockets and other arms to Shiite militias in Iraq and the Taliban in Afghanistan. The Quds Force also lends support to Shiite allies such as Lebanon's Hezbollah and to Sunni movements such as Hamas and the Palestinian Islamic Jihad.

Although administration discussions continue, the initial decision is to target the entire Guard Corps, U.S. officials said. The administration has not yet decided when to announce the new measure, but officials said they would prefer to do so before the meeting of the U.N. General Assembly next month, when the United States intends to increase international pressure against Iran.

Formed in 1979 and originally tasked with protecting the world's only modern theocracy, the Revolutionary Guard took the lead in battling Iraq during the bloody Iran-Iraq war waged from 1980 to 1988. The Guard, also known as the Pasdaran, has since become a powerful political and economic force in Iran. Iranian President Mahmoud Ahmadinejad rose through the ranks of the Revolutionary Guard and came to power with support from its network of veterans. Its leaders are linked to many mainstream businesses in Iran.

"They are heavily involved in everything from pharmaceuticals to telecommunications and pipelines -- even the new Imam Khomeini Airport, and a great deal of smuggling," said Ray Takeyh of the Council on Foreign Relations. "Many of the front companies engaged in procuring nuclear technology are owned and run by the Revolutionary Guards. They're developing along the lines of the Chinese military, which is involved in many business enterprises. It's a huge business conglomeration."

The Revolutionary Guard Corps -- with its own navy, air force, ground forces and special forces units -- is a rival to Iran's conventional troops. Its naval forces abducted 15 British sailors and marines this spring, sparking an international crisis, and its special forces armed Lebanon's Hezbollah with missiles used against Israel in the 2006 war. The corps also plays a key role in Iran's military industries, including the attempted acquisition of nuclear weapons and surface-to-surface missiles, according to Anthony H. Cordesman of the Center for Strategic and International Studies.

The United States took punitive action against Iran after the November 1979 takeover of the U.S. Embassy in Tehran, including the breaking of diplomatic ties and the freezing of Iranian assets in the United States. More recently, dozens of international banks and financial institutions reduced or eliminated their business with Iran after a quiet campaign by the Treasury Department and State Department aimed at limiting Tehran's access to the international financial system. Over the past year, two U.N. resolutions have targeted the assets and movements of 28 people -- including some Revolutionary Guard members -- linked to Iran's nuclear program.

The key obstacle to stronger international pressure against Tehran has been China, Iran's largest trading partner. After the Iranian government refused to comply with two U.N. Security Council resolutions dealing with its nuclear program, Beijing balked at a U.S. proposal for a resolution that would have sanctioned the Revolutionary Guard, U.S. officials said.

China's actions reverse a cycle during which Russia was the most reluctant among the veto-wielding members of the Security Council. "China used to hide behind Russia, but Russia is now hiding behind China," said a U.S. official familiar with negotiations.

The administration's move comes amid growing support in Congress for the Iran Counter-Proliferation Act, which was introduced in the Senate by Gordon Smith (R-Ore.) and in the House by Tom Lantos (D-Calif.). The bill already has the support of 323 House members.

The administration's move could hurt diplomatic efforts, some analysts said. "It would greatly complicate our efforts to solve the nuclear issue," said Joseph Cirincione, a nuclear proliferation expert at the Center for American Progress. "It would tie an end to Iran's nuclear program to an end to its support of allies in Hezbollah and Hamas. The only way you could get a nuclear deal is as part of a grand bargain, which at this point is completely out of reach."

Such sanctions can work only alongside diplomatic efforts, Cirincione added.

"Sanctions can serve as a prod, but they have very rarely forced a country to capitulate or collapse," he said. "All of us want to back Iran into a corner, but we want to give them a way out, too. [The designation] will convince many in Iran's elite that there's no point in talking with us and that the only thing that will satisfy us is regime change."

--Staff researcher Madonna Lebling contributed to this report.

2.

World

Middle East

U.S. SET TO DECLARE IRAN GUARDS TERRORISTS
By Helene Cooper and Jim Rutenberg

New York Times
August 15, 2007

http://www.nytimes.com/2007/08/15/world/middleeast/15cnd-diplo.html

WASHINGTON -- The Bush administration is preparing to declare that Iran’s Revolutionary Guard Corps is a foreign terrorist organization, senior administration officials said Tuesday.

Today, a White House spokeswoman deflected questions about the designation, saying that the Treasury and State Departments would be the lead agencies in the decision and that President Bush himself “doesn’t actually have to take any action” to make it official.

Referring to the international group of nations negotiating with Iran over its uranium enrichment program the United States, Russia, China, France, Britain, (the permanent five members of the United Nations Security Council), and Germany the spokeswoman said, “We have been working with the P-5-plus-1 to make sure that Iran is held to account.

“And they have an opportunity to come forward,” said the spokeswoman, Dana Perino, speaking with reporters in Crawford, Tex., where President Bush is vacationing. “And we would like Iran to behave in a way that the rest of the world could embrace them.”

President Bush seemed to signal a tougher approach to Iran last week when he called attention to what American officials have said was an active role by the Revolutionary Guard in providing munitions, training, and other support to Shiite militants who have been attacking American troops in Iraq.

“When we catch you playing a nonconstructive role, there will be a price to pay,” Mr. Bush said of Iran during a news conference on Thursday.

Asked today whether Mr. Bush was alluding to military action in that statement, Ms. Perino said he was not, and that the “consequences” to which the president referred were diplomatic.

If imposed, the declaration would signal a more confrontational turn in the administration’s approach to Iran and would be the first time that the United States has added the armed forces of any sovereign government to its list of terrorist organizations.

The Revolutionary Guard is thought to be the largest branch of Iran’s military. While the United States has long labeled Iran as a state sponsor of terrorism, a decision to single out the guard would amount to an aggressive new challenge from an American administration that has recently seemed conflicted over whether to take a harder line against Tehran over its nuclear program and what American officials have called its destabilizing role in Iraq.

According to European diplomats, Secretary of State Condoleezza Rice has warned of the move in recent conversations with European counterparts, saying that a delay in efforts to win approval from the United Nations Security Council for further economic sanctions on Iran was leaving the administration with little choice but unilateral action.

A move toward putting the Revolutionary Guard on the foreign terrorist list would serve at least two purposes for Ms. Rice: to pacify, for a while, administration hawks who are pushing for possible military action, and to further press America’s allies to ratchet up sanctions against Iran in the Security Council.

The State Department and Treasury officials are pushing for a stronger set of United Nations Security Council sanctions against members of Iran’s government, including an extensive travel ban and further moves to restrict the ability of Iran’s financial institutions to do business abroad. American officials have also been trying to get European and Asian banks to take additional steps against Iran.

Senior administration officials said current plans called for the declaration to be made this month, but cautioned that it could be put off, and that the effort could still be set aside if the Security Council moved more quickly to impose broad sanctions on Iran over its nuclear program.

The officials said the declaration was being pushed by Ms. Rice, and would not say if it had been endorsed by the National Security Council or the Pentagon.

Listing would set in motion a series of automatic sanctions that would make it easier for the United States to block financial accounts and other assets controlled by the guard. In particular, the action would freeze any assets the guard has in the United States, although it is unlikely that the guard maintains much in the way of assets in American banks or other institutions.

In the internal debate over American policy toward Iran, Ms. Rice has succeeded over the last year in holding the Bush administration to a diplomatic course in which America and five other world powers have used the Security Council to impose sanctions to try to get Tehran to suspend its enrichment of uranium.

But in recent months, there has been resurgent debate within the administration about whether the diplomatic path is working, with aides to Vice President Dick Cheney said to be among those pushing for greater consideration of military options. The debate has been kindled by reports from international inspectors detailing Iran’s progress in its nuclear program, including the installation of more than 1,000 centrifuges to enrich uranium, as well as the assertions from American intelligence officials about an Iranian role in providing arms and other support to Shiite militias in Iraq and to Taliban militants in Afghanistan.

Iran has repeatedly denied that it is seeking to build nuclear weapons, that it is helping in any way to facilitate attacks on American troops in Iraq, or that it is shipping any weapons to the Taliban, a group Iran opposed in the 1990s.

On Tuesday, President Mahmoud Ahmadinejad again dismissed American complaints that Iran is providing weapons to the Taliban. Speaking in Kabul, Afghanistan, after talks with President Hamid Karzai, he said Iran was “fully supporting” its new government.

Mr. Karzai played down the dispute over the weapons shipments, as he did during a visit to the White House this month. He said that Afghanistan and Iran were “brothers” and that both the United States and Iran were helping reconstruct his country.

In June, Defense Secretary Robert M. Gates said the volume of weapons reaching the Taliban from Iran made it “difficult to believe” that the shipments were “taking place without the knowledge of the Iranian government.” In a television interview the same day, Assistant Secretary of State R. Nicholas Burns said there was “irrefutable evidence” that the weapons were coming from the Revolutionary Guard.

There are currently 42 organizations on the State Department’s list of foreign terrorist organizations, including Al Qaeda, the Lebanese militant group Hezbollah and the Palestinian groups Hamas and Islamic Jihad.

In taking aim at the guard, the administration is also trying to divide Iran’s population. During his news conference on Thursday, President Bush addressed the Iranian people directly. “My message to the Iranian people is, ‘You can do better than this current government,’” Mr. Bush said. “‘You don’t have to be isolated. You don’t have to be in a position where you can’t realize your full economic potential.’”

The United States government has not made a public estimate about the size of the Revolutionary Guard, an organization that dates to the Islamic revolution of 1979 and whose branches are believed to extend widely throughout the Iranian military. An estimate by GlobalSecurity.org, a research group based in Alexandria, Va., puts the total guard forces at 125,000.

The guard and its military wing are identified as a power base for Mr. Ahmadinejad. Under his administration, American officials said, the guard has moved increasingly into commercial operations, earning profits and extending its influence in Iran in areas involving big government contracts, including building airports and other infrastructure, oil production, and providing cellphones.

The immediate legal consequence of the guard’s designation as a terrorist organization would be to make it unlawful for anyone subject to United States jurisdiction to knowingly provide material support or resources to the guard, according to the State Department. Any United States financial institution that becomes aware that it possesses, or has control over, funds of a foreign terrorist organization would have to turn them over to the Treasury Department.

Because Iran has done little business with the United States in more than two decades, the larger point of the designation would be to heighten the political and psychological pressure on Iran, administration officials said, by using the designation to persuade foreign governments and financial institutions to cut ties with Iranian businesses and individuals.

The decision would have little impact on American military activities in Iraq, where coalition forces already pursue fighters, advisers, and financiers who support antigovernment forces, according to a senior Defense Department official. “We are going to go after any forces that are engaged in activities that are disruptive to the stability and security of Iraq,” said the official, who spoke on condition of anonymity because the subject was pending administration policy.

--Helene Cooper and Thom Shanker contributed reporting from Washington, Jim Rutenberg from Crawford, Tex., and David Rohde from Kabul, Afghanistan.

3.

In depth

Iran

U.S. MAY BRAND ÉLITE IRAN GUARDS TERRORISTS
By Demetri Sevastopulo (Washington) and Gareth Smyth (Tehran)

Financial Times (UK)
August 15, 2007

http://www.ft.com/cms/s/555464de-4b62-11dc-861a-0000779fd2ac.html

The Bush administration is considering designating the Iranian Revolutionary Guards as a terrorist organization in an effort to ratchet up pressure on the government in Tehran.

Washington has grown increasingly frustrated with Iran’s alleged support for insurgents in Iraq and Afghanistan. The move to place the élite military force on the “specially designated global terrorist” list also reflects the administration’s view that United Nations sanctions are failing to prevent Iran from proceeding with its nuclear program.

“[There is] increased frustration over the slow pace and perceived lack of effectiveness of U.N. sanctions,” said Cliff Kupchan, an Iran expert at Eurasia Group. “The administration is telling the world, ‘if you don’t act, we will.’”

The administration has already imposed sanctions on senior members of the Iranian Revolutionary Guard, an elite 250,000-strong force that reports directly to the supreme leader of Iran. But this would be the first time the U.S. has placed a national military force on the ­“specially designated global terrorist” list.

Mr. Kupchan said the administration had also been “outflanked on the right” by Congressional proposals to tighten sanctions on Iran that would include designating the Revolutionary Guard as a terrorist group.

The proposal comes on the heels of a high-level meeting between U.S. and Iranian officials in Baghdad to discuss U.S. allegations that members of the Revolutionary Guard are facilitating attacks on U.S. forces in Iraq by supplying advanced roadside bomb technology to insurgents.

Ray Takeyh, an Iran expert at the Council on Foreign Relations, said the move “reflected the incoherence of Iran policy” in the administration, and questioned how the U.S. could expect to hold constructive negotiations with Tehran while designating part of the regime as a terrorist organization.

“The U.S. and Iran are at the table in Baghdad -- and it seems the Americans mistakenly think they can improve their bargaining position like this,” said Amir Mohebian, political editor of *Resalat*, a conservative newspaper.

Mr. Takeyh said the U.S. would have difficulty imposing sanctions because the administration does not have the necessary data to determine which Iranian companies are associated with the Revolutionary Guard, which has taken a growing role in the economy in recent years through company ownership.

U.S. Treasury rules already bar U.S. banks from dealing with Iranian banks and companies. But under certain conditions, U.S. banks have been able to make use of the so-called U-turn exemption which has allowed them to process international dollar payments between Iranian banks and non-U.S. financial institutions.

George Kleinfeld, a lawyer at Clifford Chance in Washington, said the designation would limit the usefulness of that exemption. “Now, any U.S. bank will have to be wary of whether any U-turn payment involving Iran is ultimately for the benefit of the Iranian Revolutionary Guard, in which case they will be obligated to freeze such payment,” he said.

4.

IRANIAN REVOLUTIONARY GUARD TO GET 'TERRORIST' LABEL
By Viola Gienger and Alison Fitzgerald

Bloomberg News
August 15, 2007

http://www.bloomberg.com/apps/news?pid=20601091&sid=aD2o5pQmFpcM

The U.S. is preparing to designate Iran's Revolutionary Guard Corps, an arm of the country's security forces, as a terrorist group to block financing and prevent others from doing business with it, an official said.

The U.S. official, speaking on condition of anonymity because an announcement hasn't been made, confirmed a *Washington Post* report today on the planned designation. The corps, which would be named a "specially designated global terrorist," operates its own companies and provides investment capital for others, terrorism-finance experts said.

State Department spokesman Sean McCormack declined to discuss "anything that might be under active consideration," when asked about the move by reporters in Washington today.

Inclusion on the list, which is compiled with and maintained by the U.S. Treasury Department, blocks assets of a group and anyone who supports it. The U.S. is seeking to stop what it says is Iranian help to insurgents in Iraq and Afghanistan while pressing the United Nations Security Council for tougher measures against the country's suspected nuclear arms program.

While McCormack said regulatory restrictions prevent him from discussing the matter, he said the U.S. strategy is to "raise the cost to the Iranian government" for behavior hostile to American interests. Treasury spokeswoman Molly Millerwise declined to comment.

Iran called media reports of the potential designation "propaganda," according to the state-run Islamic Republic News Agency, which cited an unidentified Foreign Ministry official.

FINANCIAL PRESSURE

The new designation would be separate from Iran's status since 1984 on the State Department's list of "state sponsors of terrorism," which includes sanctions such as limits on U.S. foreign assistance and defense exports and sales.

The Bush administration already has imposed sanctions on some Iranian banks in an attempt to narrow the country's access to the international financial system. In a related effort, American diplomats have been trying to persuade European companies to curtail energy investments in Iran, the second-largest oil producer in the Middle East.

The Revolutionary Guard's commercial activities are worth "hundreds of millions, if not billions of dollars," said Victor Comras, a consultant on U.S. sanctions who ran the State Department's sanctions programs during the Clinton administration.

"They have control over certain oil and engineering activities, they build airports, they have construction companies and retail outlets, and they have large investment companies," Comras said.

RISK OF DOING BUSINESS

Still, the designation might be mostly symbolic because of the previous U.S. sanctions on Iran.

"There's already a reputational risk in doing business with Iran," said Roger Robinson, chief executive officer of the Conflict Securities Advisory Group, which tracks publicly traded companies that conduct business in nations listed as sponsors of terrorism. "The designation could stigmatize foreign publicly traded companies doing business with such an entity and present a further reputational risk."

Inclusion on the U.S. list would be more effective should European countries follow with similar moves, Comras said.

'SENDING A SIGNAL'

"They are sending a signal that, if you deal with these people, then you're dealing with terrorists, and that could have an impact on your dealings with us," Comras said. The action also may fuel a movement among states and public pension funds to sell their shares in companies that do business in Iran, he said.

U.S. officials have accused the Revolutionary Guard of supplying technology and training to insurgents. The U.S. previously said five Iranian officials detained after a raid on the Iranian consulate in Arbil, Iraq, on Jan. 11 may be members of the Revolutionary Guard.

The five might belong to a unit of the Guard known for providing money, weapons, and training to groups trying to destabilize Iraq and attack U.S. and allied forces, the American military said in a statement at the time.

Iran shares a 906-mile (1,458-kilometer) border with Iraq to the west and both have Shiite Muslim majorities.

President George W. Bush said Aug. 9 that Iran is being told "there will be consequences" for people sending deadly explosives to Iraq to be used against U.S. soldiers.

Diplomatic talks with Iran have failed to curb the insurgency, and Iranian-linked bomb attacks on troops are increasing, the State Department said last week. U.S. Ambassador Ryan Crocker has held two rounds of talks with his Iranian counterpart in Baghdad in addition to lower-level negotiations between the two sides.

--To contact the reporter on this story:  Viola Gienger in Washington at This email address is being protected from spambots. You need JavaScript enabled to view it. ; Alison Fitzgerald in Washington at This email address is being protected from spambots. You need JavaScript enabled to view it. .