The US and EU are preparing new sanctions on Iran’s missile and drone program in response to the Islamic republic’s attack on Israel, but the UK and European governments are resisting pressure to designate the elite Revolutionary Guards a terrorist organization.
Janet Yellen, US Treasury Secretary, said on Tuesday that the administration was prepared to take “additional sanctions measures against Iran in the coming days”. The United States will work with allies on measures to disrupt “the Iranian regime’s malign and destabilizing activity,” Yellen said, adding that there may be “more to do” on Tehran’s oil trade.
A growing majority in EU capitals support the new sanctions, which would target Iranian networks supplying Iranian-backed militant groups across the region, according to four people briefed on the matter.
But some European officials fear a further escalation of tensions with moves targeting the so-called resistance axis – which includes Hezbollah in Lebanon, Hamas in Gaza, Houthi rebels in Yemen and Iraqi militias – during such a volatile time in the Middle Orient.
Annalena Baerbock, Germany’s foreign minister, said the EU had already imposed sanctions on Iranian military supplies used by Russia in its war against Ukraine.
He added that late last year Germany, France and other EU partners pushed to broaden the scope of sanctions to other types of missiles in Iran’s arsenal, “in view of the way Iran and its proxies are destabilizing the Middle East”.
This was now likely to happen. “I hope that we as an EU can now finally take this step together,” Baerbock said.
In addition to blacklisting Iran’s missile and drone programs, the US will also target entities that support the IRGC and Iran’s Defense Ministry, US National Security Advisor Jake Sullivan said.
“These new sanctions and other measures will continue to apply sustained pressure to contain and degrade Iran’s military capability and effectiveness and address the full range of its problematic behaviors,” he said.
Western governments have been working on a coordinated response to Iran’s missile and drone attack on Israel over the weekend and will discuss their options at this week’s G7 foreign ministers’ meeting in Italy. However, while they want to show that they are taking strong measures, they are also trying to ease regional tensions and prevent a full-blown regional conflict from erupting.
“Those still against [widening the sanctions] they fear this could destabilize the relationship with Iran and deprive us of influence over Tehran,” said an EU official briefed on the negotiations.
The G7, as well as the EU itself, declared after the Iranian attack that they were ready “to take further measures now and in response to further destabilizing initiatives”.
Iran, which launched the attack in retaliation for a suspected Israeli attack on its consular building in Damascus this month, is already subject to hundreds of Western sanctions.
Proscribing the 120,000-strong Revolutionary Guards, the most powerful wing of Iran’s military, as a terrorist organization would be a harsher response than expanding anti-drone sanctions.
But European and British officials fear such a move would risk retaliation from Iran, including the possibility of Tehran cutting diplomatic ties or targeting dual nationals in their countries.
The Netherlands, Sweden and the Czech Republic have called for measures directly targeting the Revolutionary Guards, three diplomats said, but the proposal has been rejected by multiple countries, including Germany and France. EU sanctions require all 27 member states to agree.
German officials say the legal conditions for placing the Revolutionary Guards on the EU’s terrorist list have not been met. Notably, the group has not carried out any terrorist attacks in the EU.
“They are against ‘flipping the table,’” the EU official said, adding that imposing sanctions on the Revolutionary Guards would be “a declaration of war.”
The Guards operate alongside Iran’s conventional army to protect the republic from domestic and foreign threats. Its Quds Force, responsible for foreign operations, coordinates training and weapons with the myriad Iranian-backed militant groups across the region.
Sanam Vakil, Middle East director at Chatham House, said European capitals were trying to “toe the line between reducing tension and demonstrating a meaningful response to Iran’s attack.”
“But there is still debate about the usefulness of proscribing” the Guard, “as well as the broader impact it might have on security,” Vakil said.
It is unusual for a government to designate another state’s military as a terrorist organization, although the United States gave this designation to the Guards in 2019 under then-President Donald Trump.
Rishi Sunak, Prime Minister of the United Kingdom, who has launched a review into the guards’ ban in 2022, said on Monday that the organization poses a “significant threat to the security of the United Kingdom and our allies”.
There has long been a division within the British government over the proscription of the Revolutionary Guards, with some officials arguing that such a step would lead Tehran to sever relations with the United Kingdom altogether. They argue that the British embassy in Tehran is valuable to both the US and the UK.
Josep Borrell, the EU’s chief diplomat, said after a virtual meeting of EU foreign ministers on Tuesday evening that officials in Brussels will start working on the text of the new sanctions, at the request of member states.
Discussions are expected to continue at a meeting of European leaders in Brussels on Wednesday. “We will not increase tension,” another EU diplomat said. “Sanctions other than drones that include the Revolutionary Guard are completely excluded.”
Christiane Hoffmann, spokeswoman for German Chancellor Olaf Scholz, said: “We already have a very broad sanctions regime [on Iran]. We will now consult with our EU partners to decide whether and in what form sanctions can be tightened further.”
Additional reporting by Javier Espinoza and Laura Dubois in Brussels, Felicia Schwartz in Washington and Lucy Fisher in London