Officially: the European Union declared – the Revolutionary Guards are a terrorist organization

The European Union determined today (Thursday) that the Revolutionary Guards will be defined as a terrorist organization. According to estimates, the very announcement will send a clear message: Europe considers the Revolutionary Guards, and by extension also central parts of the Iranian government, an illegitimate factor due to terrorism and oppression. In Iran they responded: “a serious strategic mistake”.

The Minister of Foreign Affairs of the Union, Kaya Callas, tweeted on Network X after the decision: “The Foreign Ministers of the European Union have just taken a decisive step and declared Iran’s Revolutionary Guards a terrorist organization.”

On the other hand, Iran’s foreign minister responded: “Europe is making a serious strategic mistake when it defines Iran’s Revolutionary Guards as a terrorist organization.”

Foreign Minister Gideon Sa’ar also commented on the Union’s decision. “This is an important and historic decision,” he said. “The number one factor in the spread of terrorism and the destabilization of the region is now called by name. The legitimacy of this murderous regime received a tremendous blow today.”

The move by the Union is considered an unusual political step with wide consequences, even if many of them are not dramatic in the short term. The move is expected to have major political and economic effects for Iran as a whole, but this will not result in an immediate effect of severely damaging the government in Tehran.

• Such a step is expected to harden the European position towards Tehran.
• It may complicate and even freeze parts of the dialogue between the EU and Iran on sensitive issues such as the nuclear program, the release of prisoners and issues of regional security.
• Iran has threatened many times to end political cooperation with European countries in the event of this type of escalation.
• The Revolutionary Guards are a central factor in Iran’s regional policy and defense, therefore any damage to their status directly affects the ability to hold talks on these issues.

• Beyond the practical aspect, the declaration has a strong symbolic dimension.
• For Iranians who oppose the regime, such a move would be perceived as moral and political support on the part of Europe in the fight against the role of the Revolutionary Guards in internal repression and executions in particular, and in the opposition and protest in Iran in general.
• The decision will bring EU policy even closer to the position of the United States, which has already defined the IRGC as a terrorist organization, and will create a sense of a broader Western consensus on the issue.

• To understand the economic consequences, it is important to remember how involved the Revolutionary Guards are in the Iranian economy.
• The control of the Revolutionary Guards in the economy in Iran is carried out mainly through various corporations, headed by Hatem al-Anbia.
• The Revolutionary Guards are active in the fields of oil and gas, construction, infrastructure, transportation, communications, agriculture, and more.
• Various estimates speak of the fact that bodies related to the Revolutionary Guards influence a large share of the national product, and there are estimates that place the control of the Revolutionary Guards over about 40% of the economy and even more.

• In the immediate term – every asset of the Revolutionary Guards in Europe will be frozen, and European citizens and companies will be prohibited from transferring funds, goods or services to entities related to them.
• In practice, banks, insurance companies, and logistics companies in Europe are expected to be even more cautious, and sometimes even stricter than necessary.
• The result is that it will be more difficult for Iranian companies, even those with only an indirect connection to the Revolutionary Guards, to use European financing or transportation channels – which are in any case very limited at the present time.
• The direct damage will be felt mainly in civilian businesses owned by or related to the Revolutionary Guards, such as construction, tourism and communications, areas that have already been weakened by previous sanctions from the United States and the United Nations.
• In the past, sanctions related to the Revolutionary Guards contributed to an increase in inflation, a decrease in investments and a reduction in trade in oil and other areas, mainly because of Iran’s difficulty operating through the global banking system.
• According to estimates, a European declaration of the Revolutionary Guards as a terrorist organization will deepen the existing problems, but will not create a completely new crisis, since most of the significant economic ties with Europe are already very limited anyway.