The official rumor is that Iran's Revolutionary Guard Corps may soon be designated a terrorist organization.
White House and State Department officials declined to confirm the reports, saying it is not appropriate to discuss actions that may be under consideration.
Speaking on the condition of anonymity, senior U.S. officials say there still is an internal debate whether to target the entire Iranian corps or only its al-Quds wing.
Note State Department involvement. The goal is sanctions. For example, the US Treasury could be brought to bear. It is within their mandate to (among other things):
- Freeze the assets of terrorists, drug kingpins, and their support networks
- Cut off corrupt foreign jurisdictions and financial institutions from the U.S. financial system
- Promote the international adoption and implementation of counter-terrorist financing and anti-money laundering standards
- Trace and repatriate assets looted by corrupt foreign officials ...
Furthermore, the US administration has quietly found that sanctions are having some effect at pressuring the Iranian regime, though not yet enough to force a change in policy. According to a July report in The Economist:
Two months ago [Iranian President Ahmadinejad] astonished the central bank by ordering banks to slash interest rates below the rate of inflation. Some Iranian economists think this was a favour to the Revolutionary Guards, who have borrowed heavily to expand their commercial activities since his election...
Iran, in short, has some serious economic troubles. Might a few well-aimed kicks persuade the regime to give up its nuclear plans? In themselves, the two sanctions resolutions passed so far by the Security Council do not amount to much: they mainly ban trade in some nuclear and military equipment...
So are sanctions “working”? The punishment so far, and the fear of more to come, has scared off foreign investors and pushed up the risk, cost and inconvenience of doing business in Iran...
Nonetheless, it is not clear that sanctions are even close to imposing the sort of pain needed to alter the government's nuclear behaviour.
From this balancing act, it appears that the US administration is trying to focus financial pressure on Iran's military-industrial complex while limiting the inevitable collateral damage to the remainder of their economy. Squeezing Iran too hard might provoke retaliation. It's also worth noting with regard to military posture that the USA recently reduced their naval presence in the region from escalated levels. From August 1:
The U.S. Navy, scaling back its force in the Gulf, said on Wednesday it had sent a fresh aircraft carrier to the region to replace two carriers deployed there since early this year amid tension with Iran.
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