Iran hasn’t agreed to U.S. conditions for removing IRGC from terror list

Iranian officials have not agreed to publicly commit to de-escalation in the region — a U.S. condition for removing the country’s Islamic Revolutionary Guard Corps (IRGC) from a terror list, two U.S. sources with direct knowledge of the issue and one Israeli official told me.

Why it matters: An agreement to restore the 2015 nuclear deal is nearly complete, but Iran’s demand that President Biden reverse former President Trump’s decision to designate the IRGC as a Foreign Terrorist Organization is one of the last remaining sticking points.

Driving the news: In recent weeks, U.S. envoy for Iran Rob Malley negotiated the IRGC point indirectly with the Iranians through EU political director Enrique Mora.

• One of the proposals raised by the U.S. in the negotiations was that the Biden administration would remove the IRGC from the FTO blacklist in return for a public commitment from Iran to de-escalation in the region.
• The Iranians didn’t agree to the U.S. demand and suggested giving the U.S. a private side letter instead, two U.S. sources and one Israeli official told me.
• A senior State Department official didn’t comment on the Iranian position, but said the U.S. reiterated its position on the IRGC designation to the Iranians a couple of days ago and is awaiting a response.

As time passed, the White House has become increasingly concerned about the domestic political fallout of some kind of a deal with Iran regarding the IRGC and started cooling down to the idea, the two U.S. sources with direct knowledge of the issue said.

• The senior State Department official said that there was no change in the U.S. position regarding the IRGC designation.
• Democratic Sens. Ben Cardin and Bob Menendez publicly criticized the possibility of removing the IRGC from the terror blacklist.
• Republicans have also expressed outrage over the possible move. Three former senior national security officials in the Trump administration called the move “dangerous capitulation” in a joint statement issued on Tuesday.

What they’re saying: A White House National Security Council spokesperson said the portrayal of the indirect talks with the Iranians regarding the IRGC wasn’t accurate.

• “As we have said, the president will re-enter JCPOA if it’s in the best interest of America’s national security and fully returns Iran to its nuclear commitments. There remain a number of outstanding gaps in these negotiations. The onus on closing these gaps rests with Iran,” the NSC spokesperson said.

Yes, but: Iranian Foreign Minister Hossein Amir-Abdollahian told his Iraqi counterpart that Iran has offered some initiatives to the U.S. through the EU coordinator regarding the highly important remaining issues and stressed the onus is now on the U.S. side to show good faith, the Iranian Foreign Ministry said in a statement.

What’s next: State Department spokesperson Ned Price hinted on Monday that the U.S. is waiting until after the two-week Nowruz holiday to determine whether Iran is willing to move on its demands.

• The senior State Department official later clarified that Price’s comments did not mean that the U.S. is going to wait until after the Nowruz holiday, but expects to get the Iranian response within days.
• Price on Tuesday said the Biden administration has long discussed “alternatives” with France, Germany, the U.K., Israel and Gulf countries to prepare for a scenario where there is no return to the 2015 nuclear deal.
• “We will have a good sense of all of this before long,” he said.

Editor’s note: This story has been updated with the senior State Department official’s comments. The headline has also been updated.