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Washington – The United States on Monday designated Iran’s Revolutionary Guard Corps a foreign terrorist organization, an unprecedented declaration against a foreign government that may prompt retaliation and make it harder for American diplomats and military officers to work with allies in the region.

It is the first time that the U.S. has designated an entity of another government as a terrorist organization, placing a group with vast economic resources that answers only to Iran’s supreme leader in the same category as al-Qaida and the Islamic State.

“This unprecedented step, led by the Department of State, recognizes 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,” President Donald Trump said in announcing the measure.

Secretary of State Mike Pompeo said the designation is intended to increase pressure on Iran, isolating it further and diverting some of the financial resources it uses to fund terrorism and militant activity in the Middle East and beyond. But, in addition to the potential for Iranian retaliation, it complicates a delicate balance for U.S. personnel in at least two key countries.

The administration went ahead with the designation despite expressions of “serious” concern by senior defense and intelligence officials about the possibility of retaliation, as well as the effectiveness against an organization already subject to sanctions, according to two U.S. officials who spoke on condition of anonymity because they were not authorized to discuss the decision.

Pompeo said the move is part of an effort to put “maximum pressure” on Iran to end its support for terrorist plots and militant activity that destabilizes the Middle East. Speaking to reporters, he rattled off a list of attacks dating to the 1980s for which the U.S. holds Iran and the IRGC responsible, beginning with the attacks on the Marine Corps barracks in Beirut, Lebanon in 1983.

No waivers or exceptions to the sanctions were announced, meaning U.S. troops and diplomats could be barred from speaking with Iraqi or Lebanese authorities who have dealings with Guard officials or surrogates. Such contact occurs now between U.S. officials in Iraq who deal with Iranian-affiliated Shiite militias and in Lebanon, where the Iran-backed Hezbollah movement is in parliament and the government.

The Pentagon and U.S. intelligence agencies had raised concerns about the impact of the designation if the move did not allow contact with other foreign officials who may have met with or communicated with Guard personnel. Those concerns have in part dissuaded previous administrations from taking the step, which has been considered for more than a decade.

The Justice Department said Monday it would prosecute violations but officials declined to say how broadly they would interpret the provision barring “material support” to the IRGC. A strict interpretation would leave hundreds of European companies and executives at risk for U.S. travel bans or criminal penalties in addition to limiting American officials’ ability to deal with foreign counterparts who have links to the guard.

The designation “raises the question of whether a non-U.S. company or individual could be prosecuted for engaging in commercial transactions with an Iranian company controlled by the IRGC,” said Anthony Rapa, an international trade and national security attorney with Kirkland and Ellis.

Critics of the hardline policy also see it as a prelude to conflict.

“This move closes yet another potential door for peacefully resolving tensions with Iran,” said Trita Parsi, the founder of the National Iranian American Council. “Once all doors are closed, and diplomacy is rendered impossible, war will essentially become inevitable.”

National Security Action, a group made up of mainly former Obama administration officials, said it would put U.S. troops at risk while jeopardizing the 2015 nuclear accord with which Iran is still complying.

“We need to call out today’s move for what it is: another dangerous and self-defeating tactic that endangers our troops and serves nothing but the Trump administration’s goal of destroying the Iran deal,” it said.

The designation could also open hundreds of foreign companies and business executives to U.S. travel bans and possible prosecution for sanctions violations.

The IRGC is a paramilitary organization formed in the wake of Iran’s 1979 Islamic Revolution to defend the government. The force answers only to Iran’s supreme leader, operates independently of the regular military and has vast economic interests across the country. The U.S. estimates it may control or have a significant influence over up to 50% of the Iranian economy, including non-military sectors like banking and shipping.

Iran has long been designated a “state sponsor of terrorism” by the U.S. and the State Department currently designates more than 60 organizations as “foreign terrorist organizations.” But none of them is a state-run military.

Iran immediately responded to the designation with its Supreme National Security Council designating the U.S. Central Command, also known as CENTCOM, and all its forces as terrorist, and labeling the U.S. a “supporter of terrorism.”

The Council denounced the U.S. decision as “illegal and dangerous” and said the U.S. government would be responsible for all “dangerous repercussions” of its decision. It defended the IRGC, which has fought Islamic State fighters, as being a force against terrorism.

American military commanders were planning to warn U.S. troops remaining in Iraq, Syria and elsewhere in the region of the possibility of retaliation. Aside from Iraq, where some 5,200 American troops are stationed, and Syria, where some U.S. 2,000 troops remain, the U.S. 5th Fleet, which operates in the Persian Gulf from its base in Bahrain, and the Al Udeid Air Base in Qatar, are potentially at risk.

The U.S. special envoy for Iran, Brian Hook, and the State Department’s counterterrorism coordinator, Nathan Sales, said the 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, without elaborating. He noted that the U.S. has at various times had contact or even formal negotiations with members of groups that are subject to sanctions.

Reaction from those who favor tougher engagement with Iran was quick and welcoming.

“Thank you, my dear friend, US President Donald Trump,” Israeli Prime Minister Benjamin Netanyahu said in a tweet, a day before what could be a close election. “Thank you for answering another of my important requests that serves the interests of our countries and of countries in the region.”

Sen. Ted Cruz, R-Texas, called the action an “overdue” but essential step that should be followed by additional sanctions.

Rep. Michael McCaul of Texas, top Republican on the House Foreign Affairs Committee, said the designation “ends the facade that the IRGC is part of a normal military.”

And, the Iranian opposition group, the National Council of Resistance of Iran, called it “an imperative for Middle East security, peace, and stability, and an urgent and necessary step to end war and terrorism throughout the region and the world.”

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