I. Introduction
The Iranian Revolutionary Guard Corps (IRGC) is known to be one of the most powerful organizations in Iran, supporting Shia Islamic militant groups such as Hezbollah and serving as a key link between them. The IRGC drew international condemnation for its brutal suppression of protesters during large-scale demonstrations in Iran in January 2026, prompting major international organizations, including the European Union, to designate the IRGC as a terrorist organization and condemn it.
Moreover, the IRGC is known to have played a pivotal role in the selection of the Supreme Leader Ali Khamenei’s successor following his death in US and Israeli airstrikes in February 2026. In addition, the IRGC is reportedly actively involved in setting up the system of collecting tolls in the Strait of Hormuz. Furthermore, Iranian Parliament Speaker Mohammad Bagher Ghalibaf, who led the Iranian negotiating team to end the US-Iran War, is also known to be a former member of the IRGC.
These facts raise questions about what kind of organization the Iranian Revolutionary Guard Corps (IRGC) is, how it was created, and what role it has played both in and outside Iran. Therefore, this paper aims to provide answers to these questions.
II. What is the Iranian Revolutionary Guard Corps (IRGC)?
The Iranian Revolutionary Guard Corps (IRGC) is one of the most powerful organizations in Iran, created immediately after the 1979 Islamic revolution. The IRGC is conceived as the principal defender of the 1979 revolution and is now a critical link to Islamist militant groups violently opposed to Israel and the United States. [1]
The IRGC supports militant groups in Iraq, Lebanon, the Palestinian territories, Syria, and Yemen. This “axis of resistance” aims to rid the region of Western and Israeli influence.
The Iranian Revolutionary Guard Corps (IRGC) plays central roles in the country’s projection of power and internal security. It has drawn mounting scrutiny and condemnation from world powers like the United States and European Union, most recently for taking part in a bloody suppression of mass protests in early 2026.
The IRGC is also highly influential in Iran’s national politics. Many corps veterans have moved on to senior government roles, including in the cabinet, parliament, and provinces.
Moreover, the IRGC plays an important role in Iran’s economy, enriching itself with billions of dollars by running both legal and illicit commercial and financial networks around international sanctions.
Top of that, many regional experts believe that the IRGC played a pivotal role in selecting a successor to Ayatollah Ali Khamenei, who was killed in a joint American and Israeli strike in February 2026.
III. How was the IRGC created?
1. Overview
The Islamic Revolutionary Guard Corps (IRGC) was formally established by a decree from Ayatollah Ruhollah Khomeini on May 5, 1979, shortly after the Iranian Revolution, with the mandate to protect the nascent Islamic Republic from internal dissent and potential coups by the regular military (Artesh), which was viewed with suspicion due to its ties to the deposed Shah. Composed initially of ideologically vetted volunteers rather than professional soldiers, the IRGC lacked a designated economic role at inception, focusing instead on border security, ideological enforcement, and suppressing opposition groups like the Mujahedin-e-Khalq. Its early structure emphasized parallel operations to the Artesh, with direct accountability to Khomeini, bypassing conventional military hierarchies. [2]
The invasion by Iraq on September 22, 1980, initiating the Iran-Iraq War, shaped the IRGC’s trajectory, propelling its growth from approximately 10,000 members in 1979 to over 250,000 by 1985 through mass mobilization of Basij volunteers. In response to wartime exigencies, the IRGC developed rudimentary engineering units to construct defensive fortifications, bridges, roads, and logistics infrastructure in combat zones, compensating for deficiencies in the regular army and state bureaucracy hampered by revolutionary purges. These activities represented the IRGC’s nascent economic involvement, as self-reliant construction efforts reduced dependence on civilian contractors and enabled rapid deployment amid resource shortages. [3]
As the import of weapons and supplies was disrupted by the strengthened international arms embargo and economic sanctions imposed on Iran following the hostage crisis involving U.S. diplomats at the U.S. Embassy in Iran between 1979 and 1981, the IRGC established a secret network to procure weapons, spare parts, and supplies through smuggling, bartering, and intermediaries in third countries such as Libya and Syria. These IRGC operations were often funded through the diversion of state funds or unofficial tax collections. [4] Consequently, the IRGC encountered “parallel economic mechanisms,” including currency exchange and smuggling that bypassed official channels, which allowed the organization to develop trade and commercial expertise. By the mid-1980s, this IRGC network had evolved into an organization handling the import of dual-use goods. As a result, despite the absence of an official trading subsidiary inside the IRGC, the foundation was laid for the organization to expand its role in the economic and trade sectors following the Iran-Iraq War. [5] In response to the demands of this Iran-Iraq War, the Iranian Revolutionary Guard transformed from a purely ideological military organization into a multifaceted organization with substantial economic influence.
Today, the IRGC’s size and powers have expanded immensely. Among its many prominent military duties, the IRGC operates Iran’s formidable ballistic missile arsenal and oversees the Quds Force, an expeditionary arm that partners with Iran’s various regional military groups, including Hamas and Hezbollah. As of 2026, both of these militant groups wage wars with Israel in the Gaza Strip and Lebanon, respectively.
2. Organization
The Iran-Iraq War (1980–88) transformed the IRGC into more of a conventional fighting force, with a command structure similar to that of Western militaries. Now highly institutionalized, the IRGC remains a force parallel to that of Iran’s regular armed forces, with upward of 190,000 troops under its command, according to the International Institute for Strategic Studies (IISS). Around half of these personnel are conscripts. As Figure 1 shows, the IRGC’s branches include:
- Ground forces based across Tehran and Iran’s 31 provinces, with number more than 150,000 troops;
- Naval forces, separate from the naval branch of Iran’s regular military, which have twenty thousand sailors and are charged with patrolling Iran’s maritime borders, including the Strait of Hormuz;
- An air force of fifteen thousand personnel, also separate from a parallel branch of the regular military, which runs Iran’s ballistic missile program; and
- The Basij paramilitary force, which claims it can mobilize six hundred thousand volunteers;
- A cyber command, which works with IRGC-affiliated businesses on military and commercial espionage, as well as propaganda distribution, according to IISS (its precise relationship with state-affiliated hackers is unclear).
Figure 1: Structure of IRGC (Source: IISS and CFR)
IV. What is the IRGC’s foreign policy role?
The IRGC began supporting non-state armed groups in the Middle East starting in the 1980s and deployed them for the first time during the Iran-Iraq War. The Quds Force, under the IRGC, has emerged as the de facto foreign relations department responsible for the organization’s external affairs, projecting Iran’s influence abroad by providing training, funding, weapons, and military advice to Islamic militant groups in Iraq, Lebanon, Yemen, Palestine, and Afghanistan. While some of these militant groups operate independently of Iran, Iran regards them as part of an anti-Western “axis of resistance” under its influence. [6]
As Figure 2 shows, Iran sought to export the Iranian Revolution and deter attacks against it by Western countries and its long-time adversary, Israel, by fostering these militant groups. For example, Hezbollah, an Iranian-backed militant group in Lebanon, harbors hostility toward Israel and the United States, much like Iran; at the time of Hezbollah’s founding, Israel occupied southern Lebanon. The 1983 bombings of the U.S. Embassy in Beirut, U.S. Marine Corps and French Airborne barracks, and the assassination of several Lebanese opposition figures have been attributed to Iran and its proxy, Hezbollah. In addition, intelligence agencies in the West and the Middle East have claimed that the Iranian Revolutionary Guard Corps was involved in the 1994 bombing of a Jewish center in Buenos Aires, Argentina, although Iran denies its involvement.
Figure 2: Iran-backed military groups in the Middle East (Source: CFR)
Following the 2003 U.S. invasion of Iraq, the IRGC became a major source of conflict between the U.S. and Iran as it intervened in Iraqi affairs. In 2007, U.S. President George W. Bush accused the Quds Force of providing roadside bombs to Shia militants in Iraq to kill U.S. troops, and the Donald Trump administration identified the IRGC as being behind the killing of 608 U.S. military servicemen in Iraq between 2003 and 2011.
When the large-scale popular uprising known as the “Arab Spring” took place in 2011, the Quds Force was deployed to Syria. Iran initially claimed that the Quds Force was carrying out a limited mission to defend Shia holy sites, but later admitted that it was assisting former Syrian President Bashar al-Assad in suppressing the Sunni majority in Syria. As the accumulated grievances of the Syrian people finally escalated into a civil war, the Quds Force went beyond a mere military advisory role to fight insurgents on the front lines alongside Syrian Assad government forces, Hezbollah militants, and Afghan refugees affiliated with the IRGC proxy militia. Meanwhile, as the Arab uprisings led to a civil war in Yemen as well, the IRGC supported the Houthi rebels by providing training, weapons, and intelligence, to fight against the Yemeni government forces and the Saudi Arabian coalition. [7]
Meanwhile, as the Sunni terrorist group Islamic State (IS) rose to power, the Quds Force’s activities expanded in Iraq and Syria to counter it. In Iraq, tens of thousands of Shia militiamen rallied to neutralize the Iraqi regular army; a significant number of these militias pledged allegiance to Iran’s Supreme Leader, and they were led by commanders who had previously collaborated with the Quds Force against the U.S. occupation of Iraq over the past decade. Abu Mahdi al-Muhandis, who spearheaded the general mobilization of Shia militias, was a former Quds Force officer holding citizenship in both Iraq and Iran. This mobilization played a significant role in defeating the Islamic State (IS), and the United States provided air support, allowing the IRGC, which provided ground forces, to establish a temporary, tacit cooperative relationship with the U.S. military.
However, this temporary alliance between the IRGC and the U.S. military did not last long. As the Islamic State was nearly defeated and disintegrated in 2019, hostilities between the U.S. and Iran resumed. In January 2020, a U.S. drone strike killed Qassem Soleimani, the commander of the Quds Force, who had established cooperative ties with Muhandis and various armed groups. The US assassinated Soleimani to weaken the influence of the Iranian Revolutionary Guard Corps in Iraq, a country that has relied on Iran for security, energy, and trade. Iran and its allies vowed retaliation against the US, and Iranian-backed regional militants intensified attacks against U.S. forces in Iraq and Syria, with dozens of U.S. soldiers wounded in rocket attacks in 2021.
The link between the IRGC and regional Islamic militants became even clearer after the Palestinian militant group Hamas launched its deadly attack on Israel in October 2023. The Hamas attack immediately raised questions regarding Iranian involvement, some of which remain unresolved. Although Iranian Supreme Leader Ali Khamenei publicly stated on October 7 that Iran was not involved in Hamas’s attack on Israel, some experts claim that Iran was likely aware of the impending attack and facilitated it based on its decades of experience supporting Hamas. [8]
In the subsequent war between Hamas and Israel, the IRGC provided weapons and other support to allied militants in Lebanon, Iraq, Syria, and Yemen to attack Israeli targets in solidarity with Hamas. Additionally, Iran and Israel exchanged a series of attacks throughout 2024, marking the first instance of Iran directly attacking Israeli territory. Iran claimed this was retaliation for Israel’s bombing of the Iranian embassy in Syria and the assassination of leaders of the Iranian Revolutionary Guard Corps, Hamas, and Hezbollah in 2024.
In early November 2024, the Biden administration indicted three men from the Iranian Revolutionary Guard Corps on charges of attempting to assassinate a U.S. journalist critical of the Iranian Khamenei regime in New York. Allegations were also raised that one of the defendants received instructions from the IRGC to assassinate President Trump.
Israeli Prime Minister Benjamin Netanyahu stated that an attack on Iran in June 2025 was intended to destroy “core Iranian nuclear enrichment programs.” Iranian Revolutionary Guard Corps Commander Major General Hossein Salami was the highest-ranking military leader killed in this airstrike, which also claimed the lives of several other military commanders and nuclear scientists. These Israeli airstrikes heightened tensions between the two regional powers, and Iranian Foreign Minister Abbas Araghchi characterized them as a “declaration of war” against his country. In February 2026, Israel and the US also carried out joint military airstrikes targeting nuclear facilities across Iran. [9]
V. What is the domestic role of the Iranian Revolutionary Guard Corps?
The Iranian Revolutionary Guard Corps plays a pivotal role in Iranian domestic politics; Ray Takeyh, a researcher at the U.S. think tank CFR, assessed the IRGC as “the most important organization in Iran.” [10]
As an elite group, former members of the IRGC wield immense influence in Iranian politics. For example, Mahmoud Ahmadinejad (President from 2005 to 2013) enlisted in the IRGC in 1985, participated in military operations in the Kurdistan region of Iraq, and later left the front lines to oversee logistics. Most members in his first cabinet were former IRGC members. In 2004, nearly one-third of the members of the Iranian Parliament (Majlis) were former IRGC members. Furthermore, there are numerous former IRGC members appointed to positions such as ambassadors, mayors, governors, and high-ranking officials. [11]
Former Iran’s Supreme Leader Ali Khamenei, who led the Iranian Revolutionary Guard Corps (IRGC) during the Iran-Iraq War, has appointed former IRGC commanders to key political positions. Former IRGC members in the Iranian parliament tend to support Iran’s hardline foreign policy toward the West and the development of its nuclear program.
Because the IRGC moves in alignment with the Supreme Leader’s policy stance, it sometimes appears to surpass the influence of the Iranian President, who has relatively limited authority and has no control over the IRGC. While the President holds control over domestic policy, such as the national budget, his influence on foreign policy is limited.
Experts state that the IRGC’s influence still falls short of that of Supreme Leader Khamenei, and that the two maintain a mutually beneficial relationship. “Since Ali Khamenei became Iran’s Supreme Leader in 1989, five figures — Ali Akbar Hashemi Rafsanjani, Mohammad Khatami, Mahmoud Ahmadinejad, Hassan Rouhani, and Ebrahim Raisi — have served as Iranian presidents, but none of them have brought about meaningful and lasting changes to Iran’s power structure or domestically and internationally,” wrote Karim Sajjadpour, an Iran expert at the Carnegie Endowment for International Peace, in July 2024. [12]
“Supreme Leader Khamenei and the Iranian Revolutionary Guard Corps under his command have grown stronger over the decades, and the power of the IRGC extends not only to the political system but also to the judiciary, the media, and state oversight functions. Social repression, rampant government corruption, mismanagement of the state, and incompetence have persisted unchanged regardless of who holds the presidency.” [13]
In 2007, the Basij militia came under the direct command of the IRGC, a military reorganization that some analysts interpreted as a new measure to counter internal threats against the Iranian regime. In June 2009, the IRGC was accused of manipulating the presidential election results in favor of Ahmadinejad. Subsequently, large-scale protests alleging election fraud erupted, and human rights groups documented scenes of the Basij attacking the demonstrators. Thousands were detained as a result of these protests, and many reformist politicians and activists were imprisoned. [14]
Experts say the IRGC continues to draw public resentment by maintaining an attitude of harming the Iranian people, such as heavily intervening in domestic politics and harshly suppressing protesters.
For example, the IRGC suffered a major blow to its reputation in January 2020 when it mistakenly shot down a passenger plane flying in Iranian airspace, killing all 176 passengers on board (mostly Iranians). Furthermore, in late 2022, the Basij militia and the Iranian Revolutionary Guard Corps were accused of beating, shooting, sexually assaulting, and torturing Iranians who participated in anti-government protests under the banner of “Women, Life, and Liberty.” [15]
After President Raisi died in a helicopter crash, a glimmer of hope appeared for Iranian reformers when Masoud Pezeshkian was unexpectedly elected president in August 2024. However, anti-government protests erupted again in late 2025, spreading nationwide and escalating into violence in January 2026. The Iranian Revolutionary Guard Corps and the Iranian regime suppressed the protesters with massive force, and Supreme Leader Ali Khamenei even publicly announced that “thousands have died.” This violence in Iran drew condemnation from the international community, and the European Union designated the Iranian Revolutionary Guard Corps as a terrorist organization due to its brutal suppression activities.
VI. How Deeply Involved Is the Iranian Revolutionary Guard Corps in the Iranian Economy?
1. Overview
The economic activities of the Iranian Revolutionary Guard Corps are extensively spread across Iran’s major industries, including construction, oil and gas extraction, telecommunications, banking, and smuggling networks. Consequently, the IRGC has formed a vast commercial and industrial empire, through which it accumulates massive profits and provides substantial funding to its military apparatus, regional armed groups, and sanctions-evasion schemes. [16]
As a result, according to a 2020 report by the Center for Strategic and International Studies (CSIS), “the Iranian Revolutionary Guard Corps has become the most powerful entity controlling every major economic sector across Iran.” [17]
The expansion of the Iranian Revolutionary Guard Corps’ economic activities began as the Corps, which was tasked with rebuilding infrastructure during the Iran-Iraq War (1980–1988), developed through organizations such as the Khatam al-Anbia Construction Headquarters (currently Iran’s largest engineering company) and grew into a dominant enterprise by securing private contracts and eliminating competitors through the exercise of political influence. By the 2000s, as the Iranian Constitution reinterpreted privatization in favor of state-owned enterprises, the IRGC secured dominance in strategic industrial sectors and, by exercising significant influence through foundations and subsidiaries with unclear lines of accountability, came to form part of a “military-bonyad complex” comparable to the U.S. military-industrial complex. [18]
Through these economic activities, the IRGC has firmly established itself as a parallel power structure. Amidst economic sanctions by the West, including the United States, the IRGC generated illicit revenue sources — such as smuggling oil to emerging markets like China — to support military operations of the Quds Force and Hezbollah. At the same time, it mobilized the Basij militia to engage in domestic economic activities in rural areas, thereby securing and strengthening the loyalty of the grassroots general public.
The IRGC’s tactics – namely, bribery, tax evasion, front companies operated by regime-linked elites, and intimidation of competitors – fostered systematic corruption, economic inefficiency, and cronyism. This disadvantaged private enterprises and exacerbated Iran’s structural problems, while Western economic sanctions unintentionally resulted in the IRGC’s dominance over the black market. Although there were attempts at reform during the administrations of reformist Presidents Rafsanjani and Rouhani, the economic influence of the IRGC has nevertheless persisted through securing support from Iran’s Supreme Leader and continuing regional projects such as the reconstruction of Syria. [19]
2. Historical Origins and Development of the Iranian Revolutionary Guard Corps‘ Economic Activities
a. Establishment (1979)
The Iranian Revolutionary Guard Corps was officially established on May 5, 1979, immediately following the Iranian Revolution, by a decree of Ayatollah Ruhollah Khomeini. At the time of its establishment, it had no specific economic role; instead, it focused on enforcing Islamic ideology, ensuring border security, and suppressing opposition forces such as the Mujahideen-e-Khalq.
b. Expansion of Economic Role During the Iran-Iraq War and Reconstruction Period (1980s–1990s)
The Iran-Iraq War, which broke out with Iraq’s invasion on September 22, 1980, had a profound impact on the trajectory of the Iranian Revolutionary Guard Corps. In response to the wartime situation, the Iranian Revolutionary Guard Corps established an engineering unit to construct defensive fortifications, roads, bridges, and logistics infrastructure in combat zones.
During the Iran-Iraq War (1980–1988), the economic role and importance of the Iranian Revolutionary Guard Corps expanded rapidly; its share of the military budget, which was negligible prior to the war, increased to 20.3% in 1982 and nearly 50% in 1987. This demonstrates the increased demand for logistics, supply chains, and self-sufficiency amidst Western economic sanctions and international isolation during the war. This period marked the beginning of the Iranian Revolutionary Guard Corps’ participation in early economic activities, such as managing the import of essential goods and utilizing informal networks to bypass the Western blockade; this laid the foundation for full-scale industrial and commercial activities that would later be free from state supervision. Due to the necessity of the war, the IRGC transformed itself from a military organization into a military-economic parallel agency capable of maintaining its own resources; official estimates indicate that a total of $19.6 billion was spent by the IRGC in connection with the Iran-Iraq War. [20]
Post-war reconstruction efforts, which began in 1988 following the end of the war, provided the IRGC with an opportunity to formalize its economic role. In December 1989, Iran’s Supreme Leader Ali Khamenei issued a decree establishing the Khatam al-Anbiya Construction Headquarters (KACH) under the IRGC. In its early days, KACH operated as a “War Reconstruction and Recovery Headquarters” by mobilizing engineering units from the IRGC’s ground, navy, and air force. KACH focused on large-scale infrastructure projects, including roads, dams, and urban reconstruction, and frequently secured contracts without competitive bidding during the presidency of Akbar Hashemi Rafsanjani (1989–1997), who prioritized rapid recovery over privatization. In the early 1990s, the Katam al-Anbiya Construction Headquarters grew into a large conglomerate overseeing its construction and engineering subsidiaries, seizing control of a significant portion of Iran’s reconstruction projects and generating revenue streams that strengthened the economic autonomy of the Iranian Revolutionary Guard Corps. The expansion of the Katam al-Anbiya Construction Headquarters was associated with parallel activities such as smuggling and black-market operations; by utilizing its smuggling network to procure goods such as fuel and imports, the Katam al-Anbiya Construction Headquarters frustrated private competitors and contributed significantly to consolidating the Iranian Revolutionary Guard Corps’ influence in Iran’s informal economy. While the Iranian Revolutionary Guard Corps was able to accumulate capital by combining these legal activities with illegal trade, it faced criticism for distorting competition in the market and fostering corruption. [21]
c. Consolidation of Economic Role Under Reformist and Conservative Governments (2000s)
During the tenure of reformist President Mohammad Khatami (1997–2005), the IRGC significantly expanded its economic activities, which had persisted for decades. By leveraging engineering expertise through subsidiaries such as the Khatam al-Anbiya Construction Headquarters, the IRGC secured numerous contracts from the state in the fields of reconstruction and infrastructure projects. During this period, the IRGC’s economic activities expanded into highly profitable sectors around 2000–2001, expanding business operations without significant oversight from the Iranian Parliament, relying on resources accumulated during the war. As a result, the IRGC’s economic influence steadily increased but had not yet reached a dominant position. [22]
The rise of the conservative Mahmoud Ahmadinejad regime in 2005 accelerated the strengthening of the Iranian Revolutionary Guard Corps’ economic base, thanks to the fact that Ahmadinejad was a former member of the Corps’ Basij militia and that veterans from the Corps were appointed to key government positions, occupying two-thirds of his first cabinet. Former members of the Iranian Revolutionary Guard Corps played a significant role in granting priority to Corps-affiliated enterprises in privatization and private contracting.
Significant legal changes occurred as Iran’s Supreme Leader Ali Khamenei reinterpreted Article 44 of the Constitution from 2004 to 2006. This reinterpretation allowed “public non-governmental” organizations linked to the IRGC to exert significant influence over the privatization of major sectors such as banking, energy, and telecommunications. As a result, between $110 billion and $120 billion in state assets were transferred to various agencies by 2009, with a significant portion of this flowing into cooperatives linked to the IRGC.[23]
Under the Ahmadinejad regime, the headquarters of Khatam al-Anbiya Construction secured multi-billion dollars contracts, including $2.09 billion for the development of the South Pars gas field in 2006, $1.2 billion for the construction of the Tehran subway, and $1.3 billion for the construction of the Iran-Pakistan oil pipeline. Subsequently, as foreign energy companies such as Shell and Total withdrew from Iran due to Western economic sanctions, the construction headquarters of Khatam al-Anbiya secured contracts worth $7 billion and $5 billion for the additional development of the South Pars Gas Field in 2010. [24]
In 2009, front companies of the IRGC acquired a majority stake in Iran Telecommunications for $8 billion, the largest acquisition in the history of the Tehran Stock Exchange; this was a classic example of a manipulated privatization that alienated private enterprises. Through this, the IRGC expanded its influence across Iran’s entire economic sector, including construction, oil, gas, and telecommunications. International economic sanctions, which began in 2006, reinforced the need to foster domestic companies to replace multinational corporations that had withdrawn from Iran and unintentionally strengthened the IRGC’s economic power by fostering a discourse of “economic resistance” that protected the IRGC’s profits from taxation and oversight. [25]
3. Organizational Structure
a. Khatam al-Anbiya Construction Headquarters
Established in 1989 by decree of Iran’s Supreme Leader, Khatam al-Anbiya Construction Headquarters (KACH) is the Iranian Revolutionary Guard Corps (IRGC)’s primary engineering and construction unit. It was founded to utilize the IRGC’s personnel and resources for national reconstruction following the Iran-Iraq War, initially focusing on rebuilding war-destroyed infrastructure such as roads, bridges, and dams. By the early 1990s, Khatam al-Anbiya Construction Headquarters had grown into a massive corporate group, securing billions of dollars in government contracts through non-competitive bidding based on loyalty to the IRGC rather than professional expertise. [26]
Khatam al-Anbiya Construction Headquarters employs tens of thousands of people through a network of over 800 subsidiaries and affiliates, a significant number of whom are former IRGC members or members of the Basij militia. Khatam al-Anbiya Construction Headquarters combines military discipline with commercial operational methods. The portfolio of the Khatam al-Anbiya Construction Headquarters includes major infrastructure projects such as the Tehran Metro expansion project in the 2000s, during which the headquarters was responsible for tunnel and railway construction worth over $2 billion. In the energy sector, it constructed a 1,200 km gas pipeline network from South Pars to Tehran, completed in 2012, generating annual revenue of $10 billion to $15 billion from state-ordered contracts through this project by the mid-2010s.
Financially, the Khatam al-Anbiya Construction Headquarters’ dominance stems from standard procurement regulations and tax exemptions, which enabled it to secure significant dominance in Iran’s large-scale construction market by 2010 by outbidding competitors with lower prices. A U.S. Treasury Department report points out that this structure could be used by the IRGC to divert funds for military and ideological activities, highlighting that companies linked to the Khatam al-Anbiya Construction Headquarters secured contracts totaling $25 billion during President Ahmadinejad’s term (2005–2013). Critics of the regime, including Iranian economists cited in reformist media, argue that this monopolistic structure hinders the growth of Iran’s private economy and fosters corruption, pointing to the arrest of IRGC officials in 2018 on charges of embezzling billions of dollars in construction bids as supporting evidence. Nevertheless, the Khatam al-Anbiya Construction Headquarters maintains that it plays an essential role in the country’s economic self-reliance, particularly amidst international sanctions that prohibit foreign companies from entering Iran.
b. Bonyad Foundations and Affiliates
The Iranian Revolutionary Guard Corps manages and increases its economic assets by utilizing Bonyads, which are tax-exempt charitable foundations ostensibly for charitable purposes, and these activities are generally subject to minimal oversight. Through these charitable foundations, the IRGC can invest profits in various sectors while protecting its economic activities from transparency requirements. A representative example is Bonyad Taavon Sepah, established in 1986 by IRGC commanders to structure and oversee the organization’s investments. The nine-member board of directors of this foundation, which is directly controlled by the IRGC, is chaired by the IRGC Supreme Commander and consists of high-ranking IRGC officials, including the Supreme Leader’s representative to the IRGC, and the commanders of the Ground Forces, Air Force, Navy and Basij. [27]
The Bonyad Taavon Sepah strengthens the IRGC’s dominance in key industries by operating subsidiaries and holding stakes in various companies. Bonyad Taavon Sepah formed Ansar Bank and Mehr Bank, owns companies such as Kesht va Sanaat Shadab Khorasan (agriculture and industry), Khadamat Havai Pars (aviation services), and Maede (food production), and maintains affiliations with investment firms like Tawse’e-ye E’temad and Shahriar-e Mehestan. [28]
This charitable foundation holds a 45% stake in the Bahman Group (automotive and logistics) and a 25% stake in the Kermanshah petrochemical plant, expanding the wealth and influence of the Iranian Revolutionary Guard Corps through banking, petrochemical, engineering, and import activities via the Sabrin Horizon Development Engineering Company. Due to its role in supporting nuclear proliferation activities and terrorism, Bonyad Taavon Sepah has been subject to various international sanctions, including sanctions under U.S. Treasury Executive Orders 13382 and 13224 in December 2010, as well as EU asset freezes starting in May 2011. [29]
In addition to this core organization, the IRGC is also linked to other Bonyads that generate revenue through subsidiaries in the agricultural, industrial, transportation, and tourism sectors. Bonyads linked to the IRGC include Bonyad Mostazafan and Bonyad Shahid va Omur-e Janbazan, which manage over 500 subsidiaries; Bonyad Mostazafan has pursued international contracts, such as the $30 million UAE road construction project awarded in 2004. Iranian Revolutionary Guard Corps personnel serve on the boards of directors of companies controlled by Bonyad across almost every sector, employing tactics such as establishing new entities to strengthen their influence over these large corporations and evade international sanctions. These networks allow Bonyad, linked to the Iranian Revolutionary Guard Corps, to siphon state funds into the hands of the IRGC through opaque structures, thereby enabling them to exert significant influence over the Iranian economy. [30]
4. Commercial Subsidiary Network
The IRGC operates an extensive network of subsidiaries primarily through holding companies such as Bonyad Taavon Sepah. The Bonyad Taavon Sepah Foundation invests in various sectors including banking, telecommunications, construction, mining, agriculture, and manufacturing. In 2007, the U.S. Treasury Department imposed sanctions on the Bonyad Taavon Sepah network on the grounds that it was controlled by or acted on behalf of the Iranian Revolutionary Guard Corps. This network promotes revenue generation through domestic projects and joint ventures to support the welfare of Iranian Revolutionary Guard Corps members and broader goals.[23] While the subsidiaries of the Bonyad Taavon Sepah Foundation often receive preferential contracts and tax exemptions to strengthen the economic influence of the Iranian Revolutionary Guard Corps, the Iranian government defines them as non-profit welfare mechanisms for its members. [31]
Established on August 23, 1986, as an asset of Iran’s Supreme Leader under the supervision of the Iranian Revolutionary Guard Corps, Bonyad Taavon Sepah provides loans, housing, and business support to members or staff of the Iranian Revolutionary Guard Corps while generating revenue through commercial operations. Revenue sources include manufacturing, construction, and financial services subsidiaries, and 24 housing cooperatives were in operation nationwide until tax exemptions expired in December 2014. Major subsidiaries under Bonyad Taavon Sepah include Ansar Bank, which was established in 1986 as an interest-free lending institution and converted into a full-fledged bank in 2007; this bank merged with Sepah Bank in January 2019. Tose-e Etemad Mobin Company, established in 2004, participated in the acquisition of a 51% stake in the Iran Telecommunication Company for $8 billion through the Etemad-e Mobin consortium in 2009, and transferred the stake in 2018 at the direction of Iran’s Supreme Leader. [32]
Other notable subsidiaries of Bonyad Taavon Sepah include Warriors’ Housing Jihad, a Tehran-based construction company (participating in projects such as the Shahid Kharrazi residential tower in District 22); Iranian Atlas Company, which has been involved in the construction of residential and commercial facilities, including Atlas Mall and Haqqani Metro, since 1986; and Tehran Area Mine Development Company, which, as of 2022, is conducting mechanical and electrical installation businesses in Tehran and Rajabi Khorasan Province. In the telecommunications and electronics sector, there are subsidiaries such as Moj-e Nasr Gostar, which is engaged in security networks for the transportation and relief sectors, CCTV installation, and data center-related businesses. In the agriculture and food processing sector, subsidiaries of Bonyad Taavon Sepah include Soroush Parsian Capital Support Agricultural Group, responsible for livestock, aquaculture, and import/export; Hami Natural Flavor Products; and a medicinal herb refinery that processes 25 types of medicinal herbs.
In addition to Bonyad, this subsidiary network extends through opaque front companies and affiliates, and these subsidiaries are often placed on the U.S. sanctions list due to their ties to the Iranian Revolutionary Guard Corps. Examples include logistics companies such as Dastvareh Logistics and Training Institute under the Talieh Sabz Jehan Group (sanctioned on September 10, 2024), and engineering companies such as Ofogh Saberin Development Company, which has been supplying software and hardware to the Iranian Revolutionary Guard Corps’ intelligence agencies since 2011 while evading sanctions through third-country acquisitions. These subsidiaries have been under international scrutiny for mixing commercial activities with military financing. The U.S. Treasury Department has designated these subsidiaries for sanctions by linking their proceeds to the Iranian Revolutionary Guard Corps’ Quds Force operations. [33]
5. The Iranian Revolutionary Guard Corps’ Legitimate Economic Activities
a. Construction and Infrastructure Projects
As previously explained, the Khatam al-Anbiya Construction Headquarters is the main agency responsible for construction activities of the IRGC. As Iran’s largest infrastructure and development project contractor, the agency completed over 2,500 construction projects at the provincial and national levels by 2019, and employs approximately 135,000 people with over 800 subsidiaries specializing in fields such as transportation, water resource management, and urban development. [34]
The portfolio of the Khatam al-Anbiya Construction Headquarters includes major highway and bridge projects, such as the Shahid Sadr Quadruple Highway in Tehran, constructed by its subsidiary Shahid Rajai Corporation, which built 80% of the bridges in Tehran. Another example is the 1,100 km “Holy Land to Holy Land” highway connecting Qom and Mashhad, developed by the Tehran Gostaresh Company, which strengthened connectivity between the provinces. In the field of dam construction, subsidiaries such as the Fajr Institute built the Haiker Roller Concrete Dam and the Kazerun Dam in Fars Province, contributing to irrigation and flood control. These construction projects were often granted preferential treatment, including private contracts, during the Ahmadinejad administration (2005–2013), which enabled rapid project progress but resulted in the concentration of economic power within the IRGC network. [35]
Khatam al-Anbiya Construction Headquarters has also undertaken a wide range of projects in the water resources and pipeline energy infrastructure sectors, including the construction of a $1.3 billion natural gas pipeline extending from Asaluyeh to Sistan-Baluchestan Province, which aims for regional energy distribution and development Khatam al-Anbiya Construction Headquarters regularly manages projects worth over 100 billion Toman (approximately $20-25 million at historical exchange rates) and, according to recent assessments, is currently working on 385 contracts across various sectors including transportation, ports, and agricultural restoration. In 2018, it demonstrated its dominance in the sector by managing 40 large-scale projects worth approximately 1,200 trillion Iranian Rial. Participation in these projects is known to not only fill the void left by foreign companies amidst international sanctions but also generate significant revenue for the IRGC, thereby supporting the achievement of national infrastructure goals and funding extensive business operations. [36]
The scale of operations for the Khatam al-Anbiya Construction Headquarters has expanded to include mega-projects, and in 2018, a plan was announced to carry out 40 mega-projects annually according to the Iranian calendar. These projects include roads, railways, ports, mining development, and water resource management systems. These projects, carried out in cooperation with over 5,000 partner companies, employ approximately 250,000 workers and strengthen Iran’s construction self-reliance amidst external pressure, including critical tasks such as the phased completion of major dams and urban tunnels. [37]
b. Energy, Oil and Gas Business
The IRGC exerts significant influence over Iran’s energy sector, particularly the oil and gas business, through its construction subsidiary, the Khatam al-Anbiya Construction Headquarters, and directly supervises energy export activities. As a major contractor for energy infrastructure projects, including pipelines and major oil field development phases, the Khatam al-Anbiya Construction Headquarters frequently secures contracts from companies such as the National Oil Company of Iran (NIOC) and the Pars Oil and Gas Company (POGC). The Khatam al-Anbiya Construction Headquarters’ influence in the energy sector expanded further following the Iran-Iraq War, and private contracting accelerated during the presidency of Mahmoud Ahmadinejad (2005–2013), with dozens of oil and gas projects being awarded without competitive bidding. [38]
The Khatam al-Anbiya Construction Headquarters has carried out major gas field development projects, such as the South Pars Gas Development Project, the world’s largest natural gas field shared with Qatar. This project involves the design, procurement, and construction of a total of 600 km of platforms and subsea pipelines. In March 2025, the Khatam al-Anbiya Construction Headquarters signed a $17 billion contract with the Iranian Ministry of Oil aimed at increasing pressure on the South Pars gas field to maintain maximum production, alleviate gas and gasoline supply imbalances, and prevent spills toward Qatar. This project includes the installation of 420,000 tons of equipment and structures and is expected to generate $780 billion in revenue by 2052. [39]
Historically, the Khatam al-Anbiya Construction Headquarters has focused over 80% of its energy projects by value on the oil and gas sector and leverages a network of approximately 5,000 specialized companies and subsidiaries in pipeline manufacturing and offshore industry support, such as Oriental Oil Kish and Sepanir Oil & Gas Energy Engineering Company.
c. Telecommunications, Technology, and Import/Export
The IRGC effectively controls the Iranian telecommunications sector through its affiliates, thereby securing both revenue generation and surveillance capabilities. In 2009, the IRGC’s Bonyad Taavon Sepah Foundation acquired the Telecommunications Company of Iran (TCI), a state-owned enterprise and major wired telecommunications operator in Iran, marking the largest deal in the history of the Iranian stock market. Through this acquisition, the IRGC gained control of broadband and wired telephone services, and as of the early 2010s, TCI controlled over 90% of Iran’s wired telephone infrastructure. Additionally, MCI, Iran’s second-largest mobile operator with approximately 40 million subscribers, also has a majority shareholder controlled by the IRGC, enabling it to expand its business by signing international roaming agreements with over 200 operators in 110 countries.[40] These assets, managed through subsidiaries such as the Shahriar Mahestan Investment Company (linked to the IRGC’s Basij Cooperative Foundation), generate billions of dollars in revenue annually while serving as tools to monitor dissent, as evidenced by instances where the Iranian Revolutionary Guard was involved in tracking protesters during post-election unrest. [41]
In the technology sector, the Iranian Revolutionary Guard is investing in science and technology parks to advance dual-use innovations that combine civilian applications with military functions, under the pretext of legitimate economic development. The Iranian Revolutionary Guard has established formal partnerships with civilian institutions, including a Memorandum of Understanding signed with the Semnan Institute of Technology Science and Technology Park in July 2022 to fund technology startups near the Semnan Space Centre, and a cooperation agreement signed with the Arak Science and Technology Park near the Arak Nuclear Power Complex in November 2022. Internally, the IRGC operates dedicated facilities such as the Imam Hossein University Technology Center, which supports a three-year research and development pipeline from conception to commercialization for products such as disinfectants and defense equipment. Additionally, the Imam Hossein Knowledge-Based Industrial Park, located near Isfahan and managed by the IRGC Ground Forces, focuses on the production of civilian goods as well as the repair of armored vehicles. These businesses, which are expanding through plans to establish a new industrial park in Tehran, are expected to support the IRGC in securing global technology transfers through civilian channels while simultaneously strengthening its own capabilities in fields such as electronics and materials science. [42]
The IRGC’s import and export business is conducted through commercial subsidiaries, supporting domestic projects and the regime’s priority initiatives through material procurement and trade facilitation, even amidst international economic sanctions. Companies such as Valfajr Shipping Company, established by the IRGC in 1986, are responsible for maritime logistics for the import and export of goods, including components for the infrastructure and energy sectors. The IRGC Cooperative Foundation manages a broader trade network, generating hundreds of millions of dollars in annual revenue by importing heavy equipment and exporting non-oil products through front companies. Companies like Sahara Thunder, acting as procurement specialists, manage the supply chain for engineering projects under the Khatam al-Anbiya Construction Headquarters and have secured over $25 billion in import contracts related to oil and gas infrastructure since the 2000s. While these activities are disguised as legitimate commerce, they are often integrated into a parallel network where the Iranian Revolutionary Guard Corps controls major ports and customs procedures to grant priority to affiliated companies, thereby maintaining economic resilience. [43]
6. The Illegal and Parallel Economic Activities of the Iranian Revolutionary Guard Corps
Black Markets and Smuggling Networks
The IRGC controls an extensive smuggling network that sustains Iran’s black market, smuggling goods and drugs to be sold in the black market through lax border checkpoints and facilities. These illegal economic activities are made possible by the IRGC’s control of ports, docks, and border regions, which allows them to evade government surveillance; as of 2007, it was estimated that they were generating up to $12 billion in illicit profits annually. In the late 2000s, reformist figures, including former Speaker of Parliament Mehdi Karroubi, publicly accused the IRGC of illegally operating approximately 60 docks without regulation or supervision, stating that through this, about one-third of Iran’s imports flow into the black market. [44]
Drug trafficking is a core element of these illicit networks, and members of the IRGC are known to protect or support opium transported from Afghanistan through Iranian territory. In 2012, the U.S. Treasury Department designated Gholamreza Baghbani, commander of the IRGC’s Quds Force, as a target for sanctions on charges of condoning opium smuggling by Afghan drug traffickers in exchange for providing logistical and financial support necessary for IRGC operations. These illicit economic activities by the IRGC exploit Iran’s geographical location as a major transit point for heroin and opium bound for Europe and the Middle East, and IRGC border units have been criticized for prioritizing their own profits over drug enforcement and for selectively enforcing the law. [45]
Drug trafficking is a key element of these illicit networks, and members of the IRGC are known to protect or support opium transported from Afghanistan through Iranian territory. Fuel and raw material smuggling further reinforces these illicit networks, particularly through facilities managed by the Iranian Revolutionary Guard Corps, such as the Martyr Rajai Port Complex in Hormuzgan Province, where state-subsidized Iranian gasoline is illegally exported to other countries with a profit margin of 200–300%. Smuggled goods, including alcohol, tobacco, satellite dishes, and luxury items, are routinely smuggled out through “invisible docks” that handle up to 68% of Iranian exports via channels linked to the IRGC controlled zones and mafia along the Iran-Iraq border.[39] These illicit networks are intertwined with foreign exchange smuggling and the Hawala system, enabling the Iranian Revolutionary Guard Corps to launder proceeds and evade financial sanctions. This is evidenced by the case in which the United States indicted an illicit network in 2024 that used the Agricultural Trade Base Plan to transfer billions of dollars in illicit funds to the Iranian Revolutionary Guard Corps. [46]
The smuggling of fuel and raw materials further strengthens these illicit networks. Oil smuggling is a high-value business expansion of these illicit networks, and organizations under the IRGC generate revenue to sustain their operations despite international sanctions by utilizing “shadow fleets” for ship-to-ship transfers and forged documents to sell sanctioned crude oil primarily to Asian markets. In 2025, the U.S. Treasury Department took action targeting Iranian companies laundering billions of dollars obtained from these oil sales through shadow banking, demonstrating the IRGC’s active involvement in facilitating such tax evasion through proxy vessels and shell companies. While the IRGC publicly cracks down on some smuggling activities, such as seizing both drugs and weapons in regions like Kermanshah, these efforts coexist with illicit trade, thus reflecting a dual strategy of control and exploitation within the Iranian underground economy. [47]
VII. Conclusion
This paper raised the following three questions: first, what kind of organization the Iranian Revolutionary Guard Corps (IRGC) is; second, how it was created; and third, what role it plays both within and outside Iran.
Regarding the first questions, this paper argues that the Iranian Revolutionary Guard Corps (IRGC) is one of the most powerful organizations in Iran, created immediately after the 1979 Islamic revolution. The IRGC is conceived as the principal defender of the 1979 revolution and is now a critical link to Islamist militant groups violently opposed to Israel and the United States.
Regarding the second question, this paper showed that the Islamic Revolutionary Guard Corps was formally established by a decree from Ayatollah Ruhollah Khomeini on May 5, 1979, shortly after the Iranian Revolution, with the mandate to protect the nascent Islamic Republic from internal dissent and potential coups by the regular military (Artesh), which was viewed with suspicion due to its ties to the deposed Shah.
Regarding the third question, this paper fist showed that the IRGC has sponsored non-state armed groups in the Middle East in the 1980s, first deploying in the Iran-Iraq War. The Quds Force emerged as the IRGC’s de facto external affairs branch, and it has developed ties with armed groups from Iraq, Lebanon, the Palestinian territories, Yemen, Afghanistan, and elsewhere, providing them with money, training, weapons, and military advice to project Iran’s power abroad. In addition, this paper claimed that the IRGC has become a central player in Iran’s domestic politics, dominating the country’s byzantine political institutions, as well as the judiciary, media and surveillance state. Finally, this paper claimed that the IRGC has become the most powerful controller of all important economic sectors across Iran and that it constituted a sprawling, semi-autonomous commercial empire that permeates Iran’s key industries.
References
