With a potential deal on Iran’s nuclear program coming soon, debate is heating up over the scope of sanctions relief that will be provided to Iran. This issue originates from the fact that, while the U.S. agreed to lift all “nuclear-related” sanctions on Iran pursuant to the interim Joint Plan of Action, many of the current sanctions imposed on Iran relate to multiple aspects of Iran’s international behavior: its proliferation-related activities; its support for international terrorism; its development of advanced weapons capabilities, including ballistic missiles; and its human rights abuses.

It’s not surprising, then, that the issue of sanctions relief arose during the State Department’s recent unveiling of its annual terrorism report: the 2014 Country Reports on Terrorism. Asked whether a nuclear deal would erode the U.S.’s capacity to address other activities of Iran that the U.S. considers anathema to its interests, including its support for U.S.-designated terrorist groups, U.S. Ambassador-at-Large and counter-terrorism coordinator Tina Kaidanow disagreed, stating: “We have sanctions in place against Iran specifically related to the terrorism issue. That’s not going to change [after a nuclear deal].”

As a follow-up question, Amb. Kaidanow was then asked specifically about the sanctions imposed on Iran’s Revolutionary Guards Corps (“IRGC”) and whether those sanctions would be removed as part of a nuclear deal. Amb. Kaidanow affirmed that the IRGC would remain under sanctions post-deal. Pressed as to whether entities controlled by the IRGC would likewise remain under sanctions, including the National Iranian Oil Company (“NIOC”), Amb. Kaidanow seemed to answer in the affirmative, stating: “We aren’t going to remove any of the sanctions related to terrorism.”

This provoked some concern among the policy crowd, as sustaining NIOC’s designation as an agent or affiliate of the IRGC would cause serious trouble for Iran being able to sell its oil overseas. There is, however, a more obvious problem with Amb. Kaidanow’s remarks: amongst the tangled thicket of the U.S. sanctions on Iran, the sanctions imposed on the IRGC and its agents and affiliates, especially the National Iranian Oil Company, are not specifically related to terrorism.

The easiest test is to look at the programs under which the IRGC and NIOC have been designated, as well as the basis for programs created specifically to target IRGC activities. For instance, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces a sanctions program aimed at disrupting the activities of terrorists and their background organizations (31 C.F.R. Part 594). Hundreds of individuals and entities are designated under this sanctions program. However, neither the IRGC nor the NIOC are amongst them. (Only the IRGC’s special-forces unit, the Qods Force, is designated under this program. Its designation was effective October 25, 2007.)

NIOC’s designation itself has interesting origins. Pursuant to Section 312 of the Iran Threat Reduction Act, Congress amended Section 104(c) of the Comprehensive Iran Sanctions Accountability and Divestment Act (“CISADA”) to mandate the Secretary of the Treasury to make a determination within 45-days from the date of enactment as to whether NIOC and the National Iranian Tanker Company (“NITC”) were agents or affiliates of the IRGC. If so determined to be, that would trigger the application of Section 104(c)(2)(E)(i), thus prohibiting foreign banks from knowingly facilitating or providing significant financial services for the NIOC. (What constitutes “significant financial services” is outlined in 31 C.F.R. § 561.404). Foreign banks that violated U.S. law in this regard risked being cut-off entirely from the U.S. financial system.

On September 24, 2012, the Treasury Department submitted its findings to Congress and determined that “the National Iranian Oil Company is an agent or affiliate of Iran’s Islamic Revolutionary Guard Corps and that, at this time, there is insufficient information to determine whether the National Iranian Tanker Company is an agent or affiliate of the IRGC.”

Underpinning the factual basis for the determination that NIOC “is an agent or affiliate of [the IRGC],” the Treasury Department held that Rostam Qasemi, a Brigadier General in the IRGC, was appointed as Minister of Petroleum on August 3, 2011, thus overseeing the NIOC. As the Treasury notice identified, Qasemi was formerly a commander of Khatam al-Anbia, “a construction and development wing of the IRGC that generates income and funds operations for the IRGC.” Moreover, Qasemi had “publicly stated his allegiance to the IRGC.” (It might be noted that, ever since Qasemi left his post as Oil Minister on August 15, 2013 following the election of President Rouhani, the factual basis for Treasury’s designation (at least as publicly stated) had eroded.)

But leaving that aside, the important thing to note is that the notice of NIOC’s designation as an agent or affiliate of the IRGC was devoid of any allegation tying NIOC to Iran’s support for international terrorism. It just simply was not the basis for Treasury’s conclusion that NIOC merited the designation.

The same is true of the factual bases for the IRGC’s designations. The IRGC is designated under multiple sanctions programs administered by OFAC and is itself the subject of a sanctions program. On October 25, 2007, the IRGC was designated under Executive Order 13,382 for its support for Iran’s development of “ballistic missiles capable of carrying WMD.”   On June 9, 2011, the IRGC was designated under Executive Order 13553 for its responsibility for the “serious human rights abuses” that occurred following the June 2009 presidential election in Iran. And, on April 22, 2012, the IRGC was listed in the Annex to Executive Order 13606 for its complicity in the Iranian government’s “malign use of technology” to track, monitor, and disrupt its citizens’ computer and Internet use.   Specifically, the IRGC’s Guard Cyber Defense Command (“GCDC”) was alleged to host a “special department” that took “an active role in identifying and arresting protestors involved in the 2009 post-election unrest, particularly those individuals active in cyber space.”

Finally, the IRGC was created as its own sanctions program tag following the passage of CISADA, where Congress threatened to cut foreign banks off from the U.S. financial system if they facilitated significant financial transactions or provided significant financial services to the IRGC or any of its agents or affiliates. This was later incorporated into the Iranian Financial Sanctions Regulations, 31 C.F.R. § 561.

The only language suggesting that the IRGC’s activities extended to support of international terrorism is contained in Section 112 of CISADA, where Congress expresses its sense that the “United States should persistently target Iran’s Revolutionary Guard Corps and its affiliates with economic sanctions for its support for terrorism, its role in proliferation, and its oppressive activities against the people of Iran.” However, this language is non-binding and not – by its terms – linked to any other provision of CISADA. Moreover, one could argue that U.S. authorities have taken heed of this non-binding provision by designating the IRGC’s Qods Force under Executive Order 13224.

We’re thus left wondering whether Kaidanow misspoke or whether she failed to appreciate the factual basis for NIOC’s sanctions designation. I don’t know, but while we can expect that U.S. sanctions relief to Iran will trigger bouts of controversy over whether the U.S. is trading-in-the-store to resolve the nuclear crisis with Iran, we shouldn’t expect U.S. government officials to misstate the basis for sanctions designations and create controversy where there was none before.