- The US Treasury's sanctions designations indicate a willingness to toughen its stance against Iran. This generates a high risk of sanctions targeting IRGC interlocutors and affiliated firms outside Iran in 2017.
- The US' more robust stance vis-à-vis Iran is more likely intended to contain the Islamic Republic than provoke its collapse through the reinstatement of a robust multilateral nuclear sanctions framework or engaging in interstate conflict in the Gulf.
- Iran will likely seek to test the Trump administration's resolve in areas other than Iran's nuclear programme, including supporting its proxies in Iraq, Syria, and Yemen. Further Iranian missile tests carry an increased likelihood of limited US military action, for example, a demonstrative US cruise missile strike on an Iranian missile test site.
On 3 February 2017, the US Department of the Treasury imposed sanctions on 13 individuals and 12 companies for alleged connections to Iran's ballistic missile programme and sponsorship of terrorism. The US imposed similar sanctions in January and March 2016.
The new sanctions designations came after a stern warning on 1 February by US National Security Adviser Michael Flynn against Iran's 29 January ballistic missile test launch. He asserted this was in "defiance" of the UNSC Resolution 2231, which endorsed the nuclear agreement (Joint Comprehensive Plan of Action: JCPOA) and "called upon" Iran to refrain from ballistic missile development. Importantly, he did not claim the launch violated JCPOA. IHS Jane's has previously assessed that the survival of the JCPOA is contingent on the US president's willingness to renew nuclear-sanctions waivers (mid-March to mid-April 2017) which expire every 120 days, and Iran's continued compliance with the agreement.
Iran's uncharacteristic silence following the ballistic missile launch, coupled with Flynn's statements, suggests that the launch aimed to test the new US administration's response, as well as its position vis-à-vis the JCPOA.
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