US eases effects of sanctions on Iran's Revolutionary Guard

The Trump administration on Wednesday granted important exemptions to the latest sanctions on Iran's Revolutionary Guard.

Foreign governments and businesses that have dealings with the Revolutionary Guard and its affiliates will not be subject to a ban on US travel under waivers outlined by Secretary of State Mike Pompeo in two notices published in the Federal Register.

The exemptions weaken the effect of the measures and will frustrate members of Congress backing tough measures against Iran. But it lifts the threat that those who work with the US in Iraq and Lebanon, where the Guard's subsidiaries are active, will face the full weight of American penalties.

The waivers leave intact sanctions that apply directly to Iran's Revolutionary Guard and its proxies. It is the first agency of a foreign government that have ever been designated a foreign terrorist organisation by the United States. The designation, which took effect April 15, is part of a broader administration effort to increase pressure on Tehran.

Iranian Foreign Minister Mohammad Javad Zarif, speaking on Wednesday in New York, said the administration is creating dangerous conditions with its campaign against Tehran. "Iranians are allergic to pressure," he said, adding that he believes the conflict can be resolved diplomatically.

Under US immigration law, foreigners found to have provided designated foreign terrorist organisations with "material support" can be banned from the US.

When it was announced earlier this month, the designation raised fears that US diplomats and troops might have to end contacts with officials in countries that have ties with Iran or elements of the Guard, a paramilitary organisation formed in the wake of Iran's 1979 Islamic Revolution to defend its clerically overseen government.

Lebanon, where Iran and the Guard are active in their support of the militant Hizballah movement, and Iraq, where they back Shia militias and have close ties to the government, are two such countries where the US is heavily engaged on military and diplomatic fronts.

'Wise carve-out'

Pompeo said in the notices that he decided to waive the travel bans in US foreign policy and national security interests.

In one notice, he said the sanctions "shall not apply to any ministry, department, agency, division, or other group or subgroup within any foreign government" unless that entity is covered by existing US sanctions.

In the second notice, he said the sanctions won't apply "to any business, organisation, or group, whether public or private, solely based on its provision of material support to any foreign government sub-entity that has been designated as a foreign terrorist organisation."

"At first glance, it looks like a wise carve-out," said Daniel Fried, a former sanctions coordinator for the State Department who is now with The Atlantic Council. "One of the rules of sanctions is that you need to account for unintended consequences and have wide licensing and waiver authority. Otherwise, if there are unintended consequences you find yourself unable to act."

The notices were published two days after the administration announced that it would not renew sanctions waivers for countries that import Iranian oil - exposing the eight countries effected to US sanctions if they continue imports.

In the days since, however, concerns have been raised by Iran hawks that the administration may not impose sanctions on countries continuing their imports.

Under one scenario being considered by the administration, the countries could be allowed to place and pay for future orders of Iranian oil before May 2, essentially front-loading continued imports, according to officials, congressional aides and outside advisers familiar with the matter who spoke on the condition of anonymity to discuss internal deliberations.

The administration could then grant waivers from sanctions to transport and refine the oil under a 2012 law.

The State Department declined to comment on the possibility that Iranian oil imports might continue without sanctions.

President Donald Trump has said the goal is to cut Iranian oil exports to zero to choke off the estimated $50 billion a year it provided before sanctions were reinstated in November following the US withdrawal from the 2015 Iran nuclear deal.

But officials in charge of Iran policy have not ruled out the possibility of allowing some importers additional time to wind down those purchases, drawing criticism from supporters of a "maximum pressure" campaign aimed at Tehran, which the US says destabilises the Middle East by supporting militant activity around the region.