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Iran in Iraq: How Much Influence?

Iran’s influence in Iraq has been one of the most talked about but least understood aspects of the post-war situation.

Executive Summary

Iran's influence in Iraq has been one of the most talked about but least understood aspects of the post-war situation. Tehran has been variously accused by Washington of undue and nefarious interference, by Arab leaders of seeking to establish an Islamic Republic, and by prominent Iraqi officials of an array of illegitimate meddling (manipulating elections, supporting the insurgency, infiltrating the country). In reality, as Crisis Group discovered during months of extensive research in Iran and Iraq, the evidence of attempted destabilising Iranian intervention is far less extensive and clear than is alleged; the evidence of successful destabilising intervention less extensive and clear still.

That Iran has vital interests in what happens in Iraq is beyond dispute. That it so far has exercised its influence with considerable restraint also is apparent, as is the fact that it has the capacity to do far more, and far worse. To maximise the chance that Iraq emerges successfully from its political transition, it will be critical for Tehran and Baghdad to work together on common security issues, and for the U.S. at least to prevent a further deterioration of its relations with the Islamic Republic.

Muqtada al-Sadr's uprising in April 2004 heightened fears that Iran might be backing anti-coalition violence. Iran also has been accused of facilitating the movement of groups such as Ansar al-Islam, and of being responsible for the assassination of Iraqi security officials. More recently, the triumph in the January 2005 elections for Iraq's transitional national assembly of the Shiite-based United Iraqi Alliance (UIA) and, in particular, of three parties within it with long-standing ties to the Iranian regime -- the Supreme Council for the Islamic Revolution in Iraq (SCIRI), Al-Da'wa and Al-Da'wa - Tanzim al-Iraq -- appeared to vindicate the views of those who suspect an Iranian effort to install a loyal, theocratic government.

The notion is widely accepted in Iraq, the Arab world and the U.S. that Iran is intent on destabilising Iraq, moulding its politics decisively (via money or the dispatch of hundreds of thousands of its nationals), or establishing a like-minded, compliant government. Already, this has had the insidious effect of shaping perceptions; if it continues unchallenged, it clearly runs the risk of determining policy. In fact, there is no indication that Iranian electoral manipulation is anything more than speculation or that the Shiites' victory was anything other than the political translation of their demographic predominance. Nor has any concrete evidence been presented to bolster the claim that Iran is either actively promoting the insurgency or seeking to maximise instability.

Iran's strength lies elsewhere. Having fought a brutal eight-year war with Iraq in the 1980s, its security agencies are highly familiar with Iraq's physical and political terrain and are able to sustain an active intelligence presence in southern Iraq, Baghdad and Kurdistan. Iranian levers of influence include a widespread network of paid informers, the increasingly assertive Iranian Revolutionary Guard Corps (IRGC, or Pasdaran), and petro-dollar funded religious propaganda and social welfare campaigns. Most importantly, Tehran has tried to influence Iraq's political process by giving support, in particular, to SCIRI. Even then, and while the record of the past two years suggests a solid Iranian motive to interfere in Iraq and plenty of Iranian activity, it also suggests little resonance, and, therefore, a negligible impact, on Iraqi society. This is because of a deep suspicion and resentment on the part of many Iraqis toward their neighbour.

The starting point to understand Iran's role must be a proper assessment of its interests. These are relatively clear and, for the most part, openly acknowledged. Tehran's priority is to prevent Iraq from re-emerging as a threat, whether of a military, political or ideological nature, and whether deriving from its failure (its collapse into civil war or the emergence of an independent Iraqi Kurdistan with huge implications for Iran's disaffected Kurdish minority) or success (its consolidation as an alternative democratic or religious model appealing to Iran's disaffected citizens). Iran consequently is intent on preserving Iraq's territorial integrity, avoiding all-out instability, encouraging a Shiite-dominated, friendly government, and, importantly, keeping the U.S. preoccupied and at bay. This has entailed a complex three-pronged strategy: encouraging electoral democracy (as a means of producing Shiite rule); promoting a degree of chaos but of a manageable kind (in order to generate protracted but controllable disorder); and investing in a wide array of diverse, often competing Iraqi actors (to minimise risks in any conceivable outcome).

These interests and this strategy, more than a purported attempt to mould Iraq in its own image, explain Iran's involvement, its intelligence collection, its provision of funds (and possibly weapons), and perhaps its occasional decision to back armed movements. They explain, too, the paradox of Iran's simultaneous ties to Iraq's political elite, which is hoping to stabilise the country, to Shiite clerics, who aim to Islamicise it, and to some rebellious political activists or insurgents, bent on fuelling unrest.

Finally, they explain why Iran so far has held back rather than try to undermine any chance of success. But this relatively cautious attitude may not last forever. Above all, it will depend on the nature of relations between Washington and Tehran: so long as these remain unchanged, Iran is likely to view events in Iraq as part of its broader rivalry with -- and heightened fears of -- the U.S. Highly suspicious of a large U.S. presence on its borders, concerned about Washington's rhetoric, and fearing its appetite for regime change, Tehran holds in reserve the option of far greater interference to produce far greater instability.

In basing its Iraq policy on cooperation with Shiites and its Iran policy on pressure against the regime, the Bush administration is simultaneously pursuing two paths that risk proving increasingly difficult to straddle. As Crisis Group has argued, the preferred way forward involves an accommodation between Tehran and Washington in which both sides' concerns are addressed: on the one hand Iran's nuclear program, its policies toward the Arab-Israeli peace process, and support for Hizbollah; and on the other, U.S. military presence in the region, its economic sanctions, and frozen pre-revolutionary Iranian assets. For now, however, such a grand bargain appears out of reach.

Some steps nonetheless should be taken to avert the most destabilising scenarios. Washington should avoid resorting to inflammatory rhetoric and take its newfound and welcome willingness to work with the European Union on a joint Iran policy a step further. To be credible, U.S. carrots must include more than lifting opposition to Iran's membership in the World Trade Organisation and to its obtaining aircraft spare parts -- and European sticks should include more than the already announced support for UN Security Council action in the event Iran does not verifiably renounce any military nuclear effort -- if the goal is to encourage constructive Iranian behaviour on the nuclear file. It also is vital for Iraq and Iran to work cooperatively on their respective security concerns, in particular by strengthening border controls and ceasing any support for or harbouring of groups that threaten their neighbour. For its part, and particularly in the aftermath of the January elections, the international community should urgently assist Iraq in rebuilding its intelligence and customs control capabilities.

Amman/Brussels, 21 March 2005

President Hassan Rouhani meets with the heads of Iran's judiciary and parliament on 4 September before announcing further reduction of JCPOA commitments. Office of the Iranian President.

Iran Briefing Note #12

Iran Briefing Notes highlight and provide context for the previous week’s major events featured on International Crisis Group’s Iran-U.S. Trigger List. This infographic resource tracks developments on key flashpoints between Iran, the U.S. and their respective allies in the Middle East.

Download the printable PDF and browse our interactive U.S.-Iran Trigger List for more updates.

Events of Note

29 August: U.S. sanctions Lebanon-based bank it says “knowingly facilitates banking activities for Hizbollah”, along with its subsidiaries, as well as four “financial facilitators” in Lebanon and Gaza for moving funds from the Islamic Revolutionary Guard Corps to Hamas.

30 August: President Trump tweets imagery of failed Iranian satellite launch and says U.S. “not involved”; Iran subsequently blames “technical error”.

30 August: U.S. blacklists Iranian tanker Adrian Darya 1 and its Indian captain.

30 August: International Atomic Energy Agency confirms Iran enriching uranium at 4.5 per cent and stockpile at 241.6kg. Both exceed JCPOA limits.

1 September: Huthi envoy presents credentials as Yemen’s plenipotentiary ambassador to Iran.

1 September: Israel, Hizbollah exchange fire across Lebanon border.

3 September: Israeli military publishes imagery of alleged Hizbollah missile facility in Lebanon.

3 September: U.S. sanctions Iran Space Agency and related research centres.

4 September: Swedish government confirms “release of some of the crew members of Swedish-owned and UK-flagged Stena Impero”, which Iran detained in July. 

4 September: U.S. sanctions what a senior Treasury official describes as “vast oil-for-terror shipping network”. 

4 September: U.S. announces “reward of up to $15m for information leading to the disruption of the financial mechanisms of Iran’s IRGC and its branches”. 

4 September: Iranian Foreign Minister Javad Zarif says U.S. committing “outright blackmail” after Financial Times reports U.S. offering money for diversion of tankers.

4 September: President Hassan Rouhani announces Iran will defy JCPOA limits on nuclear research and development as of 6 September. 

Cross-border Tit-for-Tat

One week after a suspected Israeli drone fell and a second exploded in south Beirut, Hizbollah on 1 September fired anti-tank missiles toward Israeli military positions; Israel reported no casualties and responded with “100 shells and firing from the air by various means”.

Why it matters: Israel and Hizbollah’s cross-border exchange was a limited tit-for-tat, with both sides seemingly content to have made their point: Hizbollah Secretary General Hassan Nasrallah on 2 September posited that the group had delivered “punishment to the enemy”, while Prime Minister Benjamin Netanyahu contended the next day that Israel had “achieved all our goals”. However, the Israeli military’s 3 September release of images of what it described as a Hizbollah facility in the Beqaa “used to manufacture precision-guided missiles” with equipment from Iran underscores the strong possibility of future operations, either in Lebanon or Syria, aimed at stymieing the proliferation of what Israel considers game-changing weaponry, which in turn could prompt Hizbollah to take retaliatory measures of its own.

Third Step and Next Steps

The U.S. Special Representative for Iran, Brian Hook, on 4 September indicated that “there will be more sanctions coming. We can’t make it any more clear that we are committed to this campaign of maximum pressure, and we are not looking to grant any exceptions or waivers”.

Why it matters: President Emmanuel Macron’s efforts to fashion a de-escalatory package between Iran and the U.S. during the G7 are inching ahead but facing considerable headwind. Presidents Rouhani and Macron spoke by phone on 31 August, and on 2 September senior officials from both countries met for a 10-hour negotiating session in Paris. But Tehran on 4 September still followed through on its warning of a “third step” by announcing further breaches of the JCPOA, while President Donald Trump the same day suggested that “we’re not dealing through President Macron” and insisted that the lifting of U.S. sanctions “won’t be happening”. This significantly diminishes the prospects for an agreement between now and the UN General Assembly later this month.

Star Wars

Secretary of State Mike Pompeo on 3 September announced the blacklisting of the Iran Space Agency, the Iran Space Research Centre and the Astronautics Research Institute, noting that “this is the first time the U.S. is designating Iran’s civilian space agency for activities that advance its ballistic missile program”.

Why it matters: The U.S. has stepped up its use of sanctions in recent days, with Tuesday’s announcement the fifth tranche of six Iran-related designations within a week. But Iran’s space program has been in the U.S.’s crosshairs for months: on 3 January Pompeo argued that Iranian Space Launch Vehicles (SLVs) “incorporate technology that is virtually identical to that used in ballistic missiles”, and in February the New York Times reported that the U.S. was carrying out covert operations “to sabotage Iran’s missile and rockets”. Perhaps this is why some interpreted President Donald Trump’s tweet sending Iran “best wishes and good luck” in identifying the cause of a 29 August explosion at a launch site as a tacit admission cloaked in a denial of responsibility.

What to Watch

6 September: Iran resumes nuclear research and development activities limited by the 2015 nuclear agreement.

17 September: Elections in Israel.

17-30 September: UN General Assembly, which Iran has announced Rouhani would attend; JCPOA Joint Commission meeting on the sidelines.

Download the printable PDF and browse our interactive U.S.-Iran Trigger List for more updates.