Benoit Faucon reports for Dow Jones News Service on measures that the Iranian Revolutionary Guard Corps — which is subject to US sanctions under the Treasury Department’s “Designated IRGC Affiliates and Designated Iran-Linked Financial Institutions” list — has taken to tighten its economic control in Iran:
The withdrawal of Western [...]]]>
Benoit Faucon reports for Dow Jones News Service on measures that the Iranian Revolutionary Guard Corps — which is subject to US sanctions under the Treasury Department’s “Designated IRGC Affiliates and Designated Iran-Linked Financial Institutions” list — has taken to tighten its economic control in Iran:
The withdrawal of Western companies from the country is also opening up new opportunities for the business interests of the politically powerful Guards in areas as diverse and oil tanker construction and road building. This raises questions over whether economic sanctions will apply enough pressure on the Iranian regime to force concessions on the country’s nuclear program. One Iranian businessman told Dow Jones Newswires of how Western sanctions have forced him into the arms of the Revolutionary Guard, enriching the organization in the process.
After Swiss companies stopped selling the businessman fuel because of the sanctions, the trader found alternate supplies in neighboring Iraq. The new trade route required new permits, so to get a customs clearance only valid for month, the businessman said he had to drop by the office of an intelligence operative in the force with $70,000 in cash.
It is unclear if the guard kept the money for himself or paid it to the force.
In addition to profiting from the reshaping of established trade routes, the Revolution Guard has also seen sanctions give a competitive advantage to some parts of its diverse of business interests.
Another consequence of the sanctions for the fuel importer was that banks were unwilling to handle his foreign currency transactions. To get around this restriction, he said he had to fork over 3% of the value of a $1.4 million deal to black market foreign-exchange traders.
The Revolutionary Guards have no such problem. The force has access to foreign currency rates and free customs clearance, according to a former revolutionary guard and businessmen who works with them.
“For them, the currency exchange rate is the official one,” which is much cheaper than the black market rate private businessmen must rely on, the former guard says.
And as the country’s main security agency, “they are advantaged for clearance” on imports which normally cost 10% to 50% of the goods value, he said.
When the fuel importer paid the Guards $70,000 for customs clearance, it went directly to a member of the corps’ intelligence division, which was created specifically to monitor the risk of mass dissent after post-elections protests in 2009.
The US denies that sanctions are strengthening the IRGC:
]]>David Cohen, undersecretary of the U.S. Treasury for terrorism and financial intelligence, said the Guards’ expanded economic power is the result only of government support, not of the sanctions.
“Our sanctions are clearly focused on trying to impede the [Guards'] effort to take over important parts of the Iranian economy,” he said.
Abedin writes:
]]>A top priority for the IRGC high command is to respond so harshly and decisively so as to deter the Americans from a second set of strikes at a future point. The idea here is to avoid what happened to Iraq in the period , when the former Baathist regime was so weakened by sanctions and repeated small-scale military attacks that it quickly collapsed in the face of American and British invading armies.
The range of predictable responses available to the IRGC high command include dramatic hit ad run attacks against military and commercial shipping in the Persian Gulf, the use of mid-range ballistic missiles against American bases in the region and Israel and a direct assault on American forces in Iraq and Afghanistan. All these options are likely to be used within 48 hours of the start of hostilities.
What is less predictable is the response of the IRGC Qods Force, which is likely to be at the forefront of the Pasdaran’s counter-attack. One possible response by the Qods force is spectacular terrorist-style attacks against American intelligence bases and assets throughout the region. The IRGC Qods Force is believed to have identified every key component of the American intelligence apparatus in the Middle East, Afghanistan and Pakistan. They are likely to put this information to good use, especially since the Qods Force suspects that the CIA had a hand in last October’s Jundullah-organised suicide bombing targeting IRGC commanders in Iran’s volatile Sistan va Baluchistan province.
The IRGC navy will also play a key asymmetrical role in the conflict by organising maritime suicide bombings on an industrial scale. By manning its fleet of speedboats with suicide bombers and ramming them into American warships and even neutral commercial shipping, the Pasdaran will hope to close the Strait of Hormuz, through which nearly 40 percent of world crude oil supplies pass.
The combination of these asymmetrical forms of warfare with more conventional style missile and even ground force attacks on American bases in the region will likely result in thousands of American military casualties in the space of a few weeks. The IRGC has both the will and wherewithal to inflict a level of casualties on American armed forces not seen since the Second World War.
Even if the United States manages to destroy Iran’s nuclear infrastructure and much of the country’s military assets, the IRGC can still claim victory by claiming to have given the Americans a bloody nose and producing an outcome not dissimilar from the Israeli-Hezbollah military engagement in the summer of 2006.
The political effect of this will likely be even more explosive than the actual fighting. Not only will it awaken the sleeping giant of Iranian nationalism, thus aligning the broad mass of the people with the regime, it will also shore up Iran’s image in the region and prove once and for all that the Islamic Republic is prepared to fight to the death to uphold its principles. Suddenly Iran’s allies in the region – particularly non-state actors like Hezbollah and Hamas – would stand ten feet tall.