President Donald Trump announced on Monday that the United States is designating Iran‘s elite Revolutionary Guard Corps (IRGC) a foreign “terrorist organisation”, marking the first time Washington has formally labelled another country’s military a “terrorist group”.

Responding to the move, Iran immediately declared the US as “state sponsor of terrorism” and US forces in the region “terrorist groups”, state media reported.

Iran also condemned the US decision as an illegal act prompted by Tehran’s regional influence and “success in fighting against Islamic State,” Iranian state TV said, referring to the Islamic State of Iraq and the Levant (ISIL or ISIS).

The US has already blacklisted dozens of entities and people for affiliations with the IRGC, but not the organisation as a whole.

Trump on Monday confirmed earlier reports that the US was planning the designation, saying it will continue to increase financial pressure and raise the costs on Iran “for its support of terrorist activity”.

The US president said in a statement that the move “recognises the reality that Iran is not only a state sponsor of terrorism, but that the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft”.

The designation “makes crystal clear the risks of conducting business with, or providing support to, the IRGC”, Trump said. “If you are doing business with the IRGC, you will be bankrolling terrorism.”

US Secretary of State Mike Pompeo, a strident critic of Iran, said the designation would take place in one week.

Could complicate deplomacy

The designation allows the US to deny entry to people found to have provided the IRGC with material support or prosecute them for sanctions violations. That could include European and Asian companies and businesspeople who deal with the IRGC’s many affiliates.

It also may complicate diplomacy. Without exclusions or waivers to the designation, US troops and diplomats could be barred from contact with Iraqi or Lebanese authorities who interact with IRGC officials or surrogates.

The Pentagon and US intelligence agencies have raised concerns about what effect the designation will have if the move does not allow contact with foreign officials who might have met or communicated with IRGC personnel.

Those concerns have in part dissuaded previous administrations from taking the step, which has been considered for more than a decade.

The US special envoy for Iran, Brian Hook, and the State Department’s counterterrorism coordinator, Nathan Sales, said the Trump administration’s decision was reached after consultation with agencies throughout the government but would not say in a news conference if the military or intelligence concerns had been addressed.

“Doing this will not impede our diplomacy,” Hook said.

Tensions between the two countries have grown since Trump pulled the United States out of a 2015 nuclear deal with Tehran last May and reimposed sanctions that had crippled Iran’s economy.

Mike Pompeo said the designation would take place in one week [Patrick Semansky/AP Photo]

‘Another dangerous US misadventure’

Shortly after Trump’s Monday announcement, Iranian Foreign Minister Javad Zarif sent a protest note over the US decision to the Swiss embassy in Tehran, which looks after the US interests in Iran.

He also urged Iranian President Hassan Rouhani to place US forces in the region on Tehran’s list of “terrorist” groups, the foreign ministry said.

“A(other) misguided election-eve gift to Netanyahu,” Zarif tweeted on Monday, referring to Israeli Prime Minister Benjamin Netanyahu who is seeking to extend his 13 years in office on Tuesday.

“A(other) dangerous U.S. misadventure in the region,” Zarif added.

Iran’s Supreme National Security Council said in a statement that the designation could endanger peace and stability in the Middle East and globally, according to Iranian state TV.

“This unwise and illegal measure is a major threat to regional and international stability and peace … Iran labels the American regime as a supporter of terrorism,” the statement read as quoted by state TV.

Netanyahu, a Trump ally, thanked the US president for the decision, saying the designation “serves the interests of our countries and of countries in the region”.

The IRGC, Iran’s most powerful security organisation, was set up to protect the country’s Shia clerical ruling system after its 1979 Islamic Revolution, which toppled the Western-allied secular monarch Shah Mohammad Reza Pahlavi and led to the formation of the Islamic Republic.

The force is in charge of Iran’s ballistic missiles and nuclear programmes, and answers directly to Supreme Leader Ayatollah Ali Khamenei. It is estimated to have 125,000 personnel, comprised of army, navy and air units.

After the 1980s’ Iran-Iraq war, the IRGC also became heavily involved in reconstruction and has expanded its economic interests to include a vast network of businesses, ranging from oil and gas projects to construction and telecommunication.

The State Department currently designates more than 60 organisations, including as al-Qaeda and the Islamic State of Iraq and the Levant (ISIL or ISIS), Hezbollah and numerous armed Palestinian groups, as “foreign terrorist organisations”.