The Bulk JCPOA Benefits Are Going to IRGC and State Owned Companies in Iran
When the United States and Europe negotiated the Joint Comprehensive Plan of Action (JCPOA) they claimed it would boost trade and encourage foreign investment, thereby enhancing Iran’s private sector and eventually downgrading the regime’s tight grip on the economy.
At least, this was the belief back in 2015 when the P5+1 agreed to lift sanctions in return for having Iran’s nuclear program curbed. Today, signs indicate that the main winners in Iran are the state-owned companies, meaning Iran’s Supreme Leader Ali Khamenei and the terrorist-supporting Revolutionary Guards are enjoying JCPOA benefits.
According to Heshmat Alavi, Iranian activist focusing on human rights, in an article he wrote for Forbes, “At least 90 of the nearly 110 agreements, totaling nearly $80 billion, involve such state-controlled companies. This includes the National Iranian Oil Company, parallel to others run by regime pension funds and massive conglomerates of semi-public nature.”
Although Iran’s hardliners have criticized the JCPOA, a recent Reuters study shows those businesses answering directly to Khamenei are benefiting most from the JCPOA.
Iran’s foreign partners mainly include France, Germany, Italy, Russia and South Korea. Many of these deals remain in the preliminary stage, but they span a wide range, including energy, infrastructure, pharmaceuticals and other sectors.
According to Alavi, the main benefactor of the nuclear pact is Iran’s "Setad Ejraiye Farman-e Hazrat-e Emam," also known as the Headquarters for Executing the Order of the Imam. This entity has stakes in much of of Iran’s economy and benefits significantly through the JCPOA.
In 2013 Reuters reported that Setad’s $95 billion empire was established through illegally seizing thousands of properties owned by business people, Iranians living abroad, and religious minorities.
The U.S. Treasury Department described Setad as “A major network of front companies controlled by Iran’s leadership.” Through the JCPOA this conglomerate does business with foreign companies.
“One of the three such deals signed with foreign companies involves a $10 billion oil refinery construction plan. While Khamenei may not personally own these companies, his shadow—described as supervision—is essentially routing all invested finances,” Alavi writes, and adds, “In the past 18 months Khamenei-controlled companies, including the IRGC conglomerate, have sealed deals with foreign companies valued at over $11 billion.”
According to official estimates the private sector makes up a mere 20% of Iran’s economy, state-controlled firms to acquire most business deals made possible after sanctions were lifted, while private companies have received a depressing 17 deals, including a hotel management contract whose chief executive is the brother of Eshaq Jahangiri, Iran’s vice president.
Alavi concludes, “The first slate of investments inked for Iran is most likely to strengthen state power, meaning Khamenei, counter to any hopes raised prematurely by JCPOA supporters. The supreme leader enjoys vast control, especially in the IRGC, through which he pursues his Syria, Iraq, Yemen, Bahrain and Lebanon policies.”