EU officials have said that listing Iran's Islamic Revolutionary Guards Corps as a terrorist entity would further dampen prospects of reviving a defunct nuclear deal meant to curb Iran’s nuclear activities. The move is currently under discussion among the bloc's member states and championed by several countries including Germany.
The EU’s top diplomat Josep Borrell plays a strategic role as lead mediator between the parties — France, Germany, the UK, Russia and China — that signed a 2015 deal with Iran to block its access to a nuclear weapon in exchange for sanctions relief.
The US also took part but withdrew from what is known as the Joint Comprehensive Plan of Action (JCPOA) in 2018.
Any of the parties could invoke multiple reasons to withdraw from the negotiations, which are currently stalled, and taking the unprecedented step of designating an Iranian state entity as a terrorist organisation would worsen the situation, an EU official told The National.
The possible listing of the IRGC is not directly linked to the JCPOA but it would contribute to an “overall atmosphere” which could hinder progress, said the official.
“There is no alternative to the JCPOA. Without it, Iran would already be today a nuclear power," they added.
Other events have hurt negotiations. They include the drone supply by Russia to Iran to use in its war against Ukraine and the continuing repression against anti-government protesters in Iran, which have included public hangings.
In the past months, the EU has issued sanctions against Iran for both these reasons.
The head of the UN’s nuclear watchdog Rafael Grossi told the European Parliament last week that he was “blind” on many aspects of Iran’s nuclear programme, including how much material, how much equipment and how many centrifuges the country currently has.
Mr Grossi, who heads the International Atomic Energy Agency, had previously said in November that Iran had produced uranium enriched up to 60 per cent. The JCPOA capped Iranian uranium enrichment at 3.67 per cent in exchange for sanctions relief.
Mr Grossi said he would visit Tehran in February and hoped to make “some progress”. He also described the JCPOA as an “empty shell" but said it was important to remain engaged because Iran does not have a nuclear weapon yet.
To list the IRGC as a terrorist entity, one of the EU’s 27 member states must make a proposal to the European Council which must be unanimously accepted. The proposal must be based on a legal decision made either by a court in an EU country or in a third country, but the latter is a "trickier" process, said the EU official.
European government representatives must decide whether they are willing to accept such a decision, based on whether they believe it was made by a court on a sound legal basis in a country with a strong rule of law.
“Obviously it would be Australia, Canada, Japan and the likes, not countries like Nicaragua or Syria where you don’t have an [independent] judiciary or rule of law,” they said.
EU countries are cautious about the legal implications of a listing because they fear legal challenges. Some previously listed entities like Palestinian militant group Hamas have successfully challenged their listing in court.
An EU diplomat told The National that the bloc's 27 foreign affairs ministers exchanged views on the IRGC's potential terror listing at their last meeting in Brussels on January 23.
Diplomats expect to receive a detailed written analysis from the EU council's legal service before their next meeting on February 20. "I think it’s very important to have this very clear legal judgement," said the diplomat.
The Wall Street Journal recently reported that Berlin recently asked EU lawyers to advise whether a US federal court ruling on IRGC involvement in a bombing in Saudi Arabia in 1996 could allow for a terrorism listing. The answer from EU lawyers was reportedly negative.
Ultimately, said the official, it’s not up to the EU to decide how the JCPOA negotiations move forward.
“The EU is not a party to the deal. The participants can decide the future and fate of the deal. It’s not us, and it’s not Mr Borrell,” they said.
In an interview with the Financial Times published on Sunday, Mr Borrell confirmed that some EU heavyweights, which the daily identified as Germany and France, supported listing the IRGC.
But he warned that such a move would “make things certainly more difficult” with regards to the JCPOA.
“If the Iranian regime is so bad ... We have to try to avoid this kind of regime having a nuclear bomb,” Mr Borrell told the FT.
“And I do not know another way of doing that than making the JCPOA work.”
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COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
England squads for Test and T20 series against New Zealand
Test squad: Joe Root (capt), Jofra Archer, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Jack Leach, Saqib Mahmood, Matthew Parkinson, Ollie Pope, Dominic Sibley, Ben Stokes, Chris Woakes
T20 squad: Eoin Morgan (capt), Jonny Bairstow, Tom Banton, Sam Billings, Pat Brown, Sam Curran, Tom Curran, Joe Denly, Lewis Gregory, Chris Jordan, Saqib Mahmood, Dawid Malan, Matt Parkinson, Adil Rashid, James Vince
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona