EghtesadOnline: Secretary of State Rex Tillerson warned global companies that they do business with Iran’s Revolutionary Guards “at their own risk,” remarks that will add to investment uncertainty in a country eager to reap the economic benefits of a 2015 nuclear accord.
Tillerson, visiting Saudi Arabia to help inaugurate an alliance against Iran between the kingdom and Iraq, called on governments to join a U.S. sanctions regime against the Islamic Revolutionary Guard Corps, a hard-line military and political force, Bloomberg reported.
“Both of our countries believe that those who conduct business with the Iranian Revolutionary Guard, any of their entities -- European companies or other companies around the globe – really do so at great risk,” Tillerson said at a briefing with Saudi Foreign Minister Adel al-Jubeir.
The Revolutionary Guards “foment instability in the region and create destruction in the region,” Tillerson said.
Tillerson traveled to the region as part of the Trump administration’s push to drum up support to confront Iran and keep it from filling the void in Iraq, now that the Islamic State has been driven from its strongholds there. Part of that effort included helping inaugurate a new Saudi-Iraqi council that will assist with Iraq’s reconstruction.
His sanctions comments signaled that the administration, while leaving the landmark 2015 accord intact for now, will increase economic pressure by other means to punish Iran for its alleged sponsorship of terrorism and development of ballistic missiles.
New Iran Strategy
President Donald Trump announced a new Iran strategy Oct. 13, refusing to certify the 2015 deal between the Islamic Republic and world powers. But instead of repudiating the deal, he asked Congress to change it to to ensure it counters Iranian political influence in the Middle East and announced more sanctions on the IRGC.
In turn, the U.S. wants European allies -- the U.K., France and Germany -- to get on board with strengthening the nuclear accord and extend some restrictions that are set to expire in 2025. The comments appear to be aimed at forcing U.S. allies to make a choice: Do business with Iran, with its economy of $393 billion, or the $19 trillion U.S. economy.
The U.S. Treasury Department has designated the IRGC as a supporter of terrorism for its backing of the Quds Force, which conducts operations outside Iran. Iran has frequently argued that it isn’t seeing economic benefit from sanctions relief it was granted under the nuclear agreement, and Tillerson’s comments may only exacerbate that concern.
Business in Iran
Many businesses, including Boeing Co., Airbus SE and General Electric Co., have ventured into Iran. Boeing is scheduled to begin initial deliveries next year for the first of 80 aircraft ordered by Iran Air under a deal valued at $16.6 billion before customary discounts. Boeing is still completing licensing for a $3 billion pact with Iran Aseman Airlines.
Tillerson also called on Iranian-backed militias to lay down their weapons and leave.
“Iranian militias that are in Iraq, now that the fight against Daesh and ISIS is coming to a close, those militias need to go home,” Tillerson said, using two terms to refer to the Islamic State. “Any foreign fighters in Iraq need to go home and allow the Iraqi people to regain control.”
Tillerson’s sanctions comments appeared to contradict statements he and Trump had made in recent days that it was safe to do business in Iran. Speaking to Fox Business News on Oct. 20, Trump said he had told European allies to “just keep making money.”
“Don’t worry -- we don’t need you on this one,” Trump said in the interview.
Making a Distinction
A senior State Department official, who asked not to be identified because he wasn’t authorized to speak about the issue, said the administration was making a distinction between investment in IRGC-linked entities and those not tied to the group.
Even so, the IRGC controls huge swaths of Iran’s economy, and groups such as the American Enterprise Institute and the Foundation for Defense of Democracies argue that the chief executive officer of Aseman is linked to it, for example.
Tillerson spoke at the briefing after helping convene the first meeting of the new alliance between Saudi Arabia and Iraq. He said the Saudi Arabia-Iraq Coordination Council “highlights the strength and breadth as well as the great potential of the relationship between your countries.”
Saudi Arabia and other Sunni Gulf states are engaged in their own efforts to roll back Shiite-led Iran’s expanding sway in the region, including in Iraq, where Shiite parties have dominated politics since the U.S. toppled the secular, Sunni-dominated regime of Saddam Hussein in 2003.
“Improved Saudi-Iraqi relations definitely is a positive,” said Rob Malley, vice president for policy at the International Crisis Group and President Barack Obama’s Middle East adviser. “But it is a pipe dream to think that Iran’s influence in Iraq isn’t going to remain preponderant.”
Trip to Qatar
Tillerson flew to Qatar later on Sunday. The U.S. is seeking to resolve a standoff between the emirate and a Saudi-led bloc of four countries that has cut most economic ties with Qatar, in part over its own growing connection with Iran.
At a briefing with Qatar’s foreign minister, Tillerson said Saudi Arabia’s leaders had rebuffed his request to end the standoff.
“I did in my meetings with Crown Prince Mohammed Bin Salman ask him please engage in dialogue,” Tillerson said at a briefing in Doha alongside Qatar’s foreign minister. “There is not a strong indication that the parties are ready to talk yet. So we cannot force talks upon people who aren’t ready to talk.”
Tillerson will also visit Pakistan, India, and Switzerland on the current trip.