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U.S. Imposes New Sanctions Against Iran

By Robin Wright
Washington Post Staff Writer
Thursday, October 25, 2007 10:19 AM

The Bush administration announced an unprecedented package of unilateral sanctions against Iran today, including the long-awaited designations of its Revolutionary Guard Corps as a proliferator of weapons of mass destruction and of the elite Quds Force as a supporter of terrorism.

The package, announced jointly by Secretary of State Condoleezza Rice and Treasury Secretary Henry M. Paulson Jr., marks the first time that the United States has tried to isolate or punish another country's military. It is the broadest set of punitive measures imposed on Tehran since the 1979 takeover of the U.S. Embassy, and included a call for other countries and firms to stop doing business with three major Iranian banks.

The sanctions recognize that financing for groups like the Revolutionary Guard have become closely entwined with Iran's economy, making it difficult to disrupt the one without targeting the other.

The Revolutionary Guard "is so deeply entrenched in Iran's economy, that it is increasingly likely that if you are doing business with Iran you are doing business with the IRGC," Paulson said.

The banks involved are Bank Melli, Bank Mellat and Bank Saderat. The first two are being designated for helping finance Iran's proliferation program, and Saderat is being designated for financing terrorism. In addition, the administration named five Revolutionary Guard leaders who are included under the new restrictions, as well as nine businesses and the Iranian Ministry of Defense and Armed Forces Logistics.

Rice said the United States is "committed to a diplomatic solution" to the tension between Washington and Tehran, but also wants to "increase the costs to Iran" unless it cooperates with the international community on terrorism and proliferation.

The announced measures will help protect the international financial system, she said, and provide "a powerful deterrent" to those who do or are considering doing business with Iran.

The move caps a year of growing U.S. pressure on Tehran, including billions of dollars in arms sales to Persian Gulf allies and Israel, interception of Iranian arms shipments in Iraq and Afghanistan, detention of Iranian agents in Iraq, and pressure on the United Nations and European allies to increase Iran's isolation. The dramatic U.S. steps underscore the escalating tensions between the United States and Iran.

"The policies of Iran constitute perhaps the single greatest challenge for American security interests in the Middle East, and possibly around the world, because the combination of Iranian terrorism, Iranian repression at home and the pursuit of nuclear weapons technology -- technologies that could lead to a nuclear weapon -- is a very dangerous mix," Rice said yesterday in testimony before the House Foreign Affairs Committee.

The new sanctions will empower the United States to financially isolate a large part of Iran's military and anyone inside or outside Iran who does business with it, U.S. officials said. The measures could affect hundreds of foreign companies by squeezing them to drop Iranian business or risk their ability to do business in or with the U.S.

The Revolutionary Guard Corps, which numbers at least 125,000, is the most powerful wing of Iran's military. It controls a growing sector of the economy, including construction companies, aspects of the oil industry, pharmaceutical plants, telecommunications and ordinary commerce. U.S. officials said it also operates the front companies that procure nuclear technology.

The administration will designate the entire Revolutionary Guard under Executive Order 13382, signed by President Bush in June 2005, which allows the United States to freeze the assets of any proliferator of weapons of mass destruction and its supporters. Iran is being designated for its ballistic missile program. The United States will announce a list of Iranians involved in that program -- civilians as well as military officials -- who will also be designated, U.S. officials said.

Under the same executive order, the administration also intends to designate Iran's Ministry of Defense and Armed Forces Logistics, which controls Iran's defense industries, as well as companies owned or controlled by the Revolutionary Guard, U.S. officials said.

The overall impact, according to U.S. officials, will be to make a pariah of the most critical parts of Iran's military and its defense and commercial industries.

The Quds Force, the foreign operations branch of the Revolutionary Guard Corps, will be designated separately as a supporter of terrorism under Executive Order 13224, which Bush signed two weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding, U.S. officials said. It authorizes the United States to identify individuals, businesses, charities and extremist groups engaged in terrorism.

The Quds Force -- "Quds" is Arabic for Jerusalem -- is estimated to number up to 15,000 and runs Tehran's covert activities throughout the Middle East, including arms, aid and training for groups such as Hezbollah, Hamas and Islamic Jihad. U.S. officials say that it has provided the high-tech bombs capable of penetrating armored vehicles and the roadside explosives that are the No. 1 killer of U.S. forces in Iraq.

Although Iran's suspected weapons programs have been a longtime problem for the United States, the Quds Force's operations in Iraq have become a bigger immediate challenge. "The Quds Force controls the policy for Iraq," Gen. David H. Petraeus, the top U.S. commander in Iraq, said earlier this month. "There should be no confusion about that."

The U.S. decision to impose unilateral sanctions reflects the administration's deepening frustration over Iran's role in attacks against American troops in Iraq, its aid to the Taliban in Afghanistan, and its refusal to suspend uranium enrichment that could be used for both peaceful energy and to develop a bomb. U.S. efforts to engage Iran in a dialogue -- between their respective ambassadors in Baghdad beginning in March -- have been matched by an escalation in the quantity and quality of Iranian arms provided to Shiite militants in Iraq, U.S. officials said.

Administration officials say that they are imposing new sanctions to demonstrate a commitment to diplomacy, even amid increasing rumblings from neoconservatives outside the administration about possible military action.

In a speech Sunday, Vice President Cheney warned Tehran of "serious consequences" if it continues on its present course. "Our country and the entire international community cannot stand by as a terror-supporting state fulfills its most aggressive ambitions," he said.

The United States hopes that allies in Europe and Asia will impose similar sanctions, because efforts to get a tough U.N. resolution have stalled as a result of Russian and Chinese opposition. "The international community's got to get a lot tougher if it's going to be resolved diplomatically," Rice said about Iran's suspected nuclear program.

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