From left, European Union High Representative for Foreign Affairs and Security Policy Federica Mogherini, Iranian Foreign Minister Javad Zarifat, an unidentified Russian official, look on as British Foreign Secretary Philip Hammond shakes hands with US Secretary of State John Kerry as they arrive at the Swiss Federal Institute of Technology. AP Images Iranians hit the streets earlier this month to celebrate a nuclear framework agreement that they hope will remove the international sanctions that have crippled their country’s economy for over a decade.

Instead, it is Iran’s deep state – the business and finance empires of the supreme leader and Iran Revolutionary Guard Corps (IRGC) – who stand to benefit most from sanctions’ prospective removal.

In the European Union, sanctions against Iran’s deep state have focused almost exclusively on Tehran’s proliferation efforts. Were nuclear-related sanctions to be suspended or abolished, firms controlled by the IRGC or Iran's Supreme Leader would no longer be prohibited from buying from, trading with, or investing in EU members’ economies.

The deep state knows this well.

According to the Wall Street Journal, Iran’s Ghadir Investment firm has sought to buy a refinery in Switzerland controlled by the oil company Tamoil Suisse, which despite its name is based in Libya. A senior Tamoil official did not confirm the Iranian bid but indicated that the company has turned down an offer “from a country hit by sanctions” — presumably a reference to Iran.

The paper describes Ghadir as “a conglomerate with petrochemical businesses which is controlled by Iranian pension funds,” but it is in fact much more than that. On June 4, 2013, the US Treasury Office of Foreign Assets Control (OFAC) designated Ghadir as part of a larger effort to designate a vast network of companies and subsidiaries controlled by the supreme leader’s holding company Setad Ejraiye Farmane Hazrate Emam (“Headquarters for Executing the Order of the Imam”), or Setad for short.



Setad, though little-known both inside and outside of Iran, has become a powerhouse in recent years. The company has stakes in industrial sectors as diverse as finance, oil, telecommunications, and even the manufacturing of birth-control pills.

As for Ghadir, a majority of its shares are controlled by a handful of armed-forces funds, which include the IRGC and its Basij subsidiary – a ruthless paramilitary that enforces “morality” codes and is the regime’s primary cudgel for quashing popular dissent.

The Shahzand Petrochemical Company plant outside of Arak, Iran Wikimedia Commons Moreover, three of the company’s board members are well-known executives who spent much of their career working for the Supreme Leader: Ali Ashraf Afkhami, a former manager of the OFAC-designated Tadbir Group (owned by Setad); Gholamreza Soleimani Amiri, who chaired the board at the OFAC-designated Parsian Bank on behalf of Tadbir Group; and Mohmoud Ahmadpour Dariani, a former executive at the Mostazafan Foundation, a holding company controlled by the Supreme Leader and close to the IRGC.

The attempt to purchase a refinery in Switzerland was not Iran’s first at buy one in Europe. In July 2012, the Journal reported that Tadbir Energy Development Group — a subsidiary of Tadbir Group also designated by OFAC for links to Setad — had unsuccessfully bid on the Petit-Couronne refinery in France.

The refineries are similar in scale: the Swiss facility can process 63,000 barrels of oil a day and cover 20 percent of the country’s inland oil-product sales, while its French counterpart accounted for about 10 percent of that country’s fuel requirements. Acquiring such strategic assets on the European continent lends the Iranian deep state invaluable leverage with European governments as a means to keep Iranian oil flowing at a reasonable price.

As it happens, refineries also rely on dual-use materials for their operation. AHF (anhydrous hydrogen fluoride), for example, is a chemical used in both oil refining and uranium enrichment. As the non-proliferation scholar Mark Hibbs has documented, Iran has been unsuccessfully seeking access to AHF since at least the 1990s.

Iran has repeatedly sought to acquire production facilities overseas as a means to obtain sensitive dual-use technology it could not buy from foreign suppliers. In one such case, exposed in 2013, Iran purchased a German factory producing gas cylinders with machinery also suitable for the manufacture of uranium centrifuges. Treasury traced the Iranian-established companies that controlled the factory back to Setad.

Allowing Iran’s deep state unfettered access to European oil industry, dual-use technology, and strategic assets presents unacceptable risks to non-proliferation efforts, while also enriching those who are likely to keep Iran’s policies hostile to the West.

Iran's Supreme Leader Ayatollah Ali Khamenei (L) and Revolutionary Guards commander Mohammad Ali Jafari salute while reviewing a military parade in the city of Yazd, about 560 km (350 miles) south east of Tehran January 4, 2008. REUTERS/Iran Student News Agancy A final nuclear deal may lift restrictions on average Iranians, but it will also open up a floodgate for European commerce with firms directly tied to Iran’s supreme leader and Revolutionary Guards.

EU authorities — regulatory agencies, export-control authorities, and transparency watchdogs — must think carefully about whether such activity, while potentially soon legal, is also wise.

Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance, where Saeed Ghasseminejad is an Associate Fellow.