Originally appeared on The American Conservative.

Rohollah Faghihi reports on the damage that Trump administration decisions have done to the political fortunes of Iranian moderates and reformists and their agenda. One of the practical effects of designating the IRGC as terrorists has been to reduce the chances that Iran will adopt international standards on money laundering and terrorism financing:

Another impact of the IRGC’s designation as a foreign terrorist organization is the deterioration of prospects for the passage of bills designed to counter money laundering and terrorism financing. This legislation was submitted by the government to parliament in order to permanently exit the blacklist of the Financial Action Task Force (FATF), an intergovernmental organization created in 1989 that combats money laundering and terrorism financing. Accession to the UN Palermo Convention against transnational organized crime as well as becoming part of what is termed Combating the Financing of Terrorism has been stalled for months, with the bills stuck in the Expediency Council, which mediates disputes between parliament and the Guardian Council. The dispute has pitted the Rouhani administration against mainly hard-liners.

“The US action will enhance and strengthen the position of Expediency Council members regarding the FATF [bills] and the likelihood of rejecting them has increased,” said Gholam-Reza Mesbahi Moghaddam, a member of the Expediency Council, on April 8.

Applying an overly broad and inappropriate designation to the IRGC has just made it more difficult for supporters of the anti-money laundering legislation to get their bills passed. The administration’s heavy-handed misuse of the foreign terrorist organization (FTO) list is actually harming efforts to combat the financing of terrorism. Instead of encouraging Iran to crack down on money laundering and terrorism financing, the Trump administration just handed the opponents of these measures a propaganda coup and most likely torpedoed the legislation by once again undermining its advocates.

As I have mentioned before, the IRGC designation has not only been a boon to hard-liners generally, but it has forced Iranians from different camps to rally behind the Guards. Faghighi writes:

The outcome of the designation was clear to those living in Iran: it caused citizens to rally around the flag. Indeed, as a direct result of the IRGC’s designation as a foreign terrorist organization, even the most well-known and ardent critics of the military force have thrown their weight behind it.

This was a wholly predictable result, and one that underscores just how absurd the administration’s demands for Iran are. The administration seeks to use economic warfare to turn the population against the regime and its policies abroad, but the effect has been to solidify support for leading regime institutions and to unite opposing factions in common cause against the U.S. Faghihi quotes Abdollah Ramezanzadeh, a reformist figure who has been imprisoned by the regime in the past, as saying this: “Despite all the disagreements over domestic issues, we support our armed forces in unison against the unreasonable foreign enemy.” It is not at all unusual for domestic opponents to come together when they feel that their country is under threat, and the administration’s relentless hostility Iranians has brought this about. By failing to distinguish between the regime and the people and by punishing the entire nation for the actions of a few, the administration has demonstrated that it considers all Iranians as the enemy, and Iranians are responding accordingly. Far from turning Iranians against their government, the administration’s sanctions and threats are giving Iranians of all political stripes a reason to side with their government against unreasonable foreign demands.

Daniel Larison is a senior editor at The American Conservative, where he also keeps a solo blog. He has been published in the New York Times Book Review, Dallas Morning News, Orthodox Life, Front Porch Republic, The American Scene, and Culture11, and is a columnist for The Week. He holds a PhD in history from the University of Chicago, and resides in Dallas. Follow him on Twitter. This article is reprinted from The American Conservative with permission.