Iran Update, May 28, 2025
Iran is increasingly taking steps to facilitate its removal from the Financial Action Task Force (FATF) blacklist. The FATF blacklisted Iran in 2020.[58] Iran’s blacklist designation requires the 40 FATF member countries to sanction and limit economic engagement with Iran.[59] The Iranian Expediency Discernment Council reviewed the Combating the Financing of Terrorism (CFT) laws on May 28, but did not reach a consensus and decided to continue discussing the CFT measures in a future meeting.[60] The CFT is a set of laws that aim to restricting state funding for terrorist organizations.[61] Iran must approve and implement both the CFT and the United Nations Convention against Transnational Organized Crime, also known as the Palermo Convention, for the FATF to remove Iran from its blacklist.[62] The Expediency Discernment Council approved the Palermo Convention on May 14.[63] An Iranian delegation separately discussed Iranian efforts to rejoin the FATF with representatives of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) on in Moscow on May 26.[64] The EAG is an associate member of the FATF that is comprised of nine countries, including China, Russia, Tajikistan, and Uzbekistan.[65]
The recent Iranian efforts to rejoin the FATF are notable given that Iran’s FATF membership has historically been a controversial issue within the Iranian regime.[66] The FATF will decide whether to suspend countermeasures imposed on Iran, such as sanctions, if Iran ratifies and implements the Palermo Convention and CFT in line with FATF standards.[67] It is very unlikely that Iran would cease financial support for US-designated terrorist organizations, including Hamas, Hezbollah, and the Houthis, even if the Expediency Discernment Council approved the CFT.
Iran is continuing to support the Axis of Resistance despite military setbacks that Israel imposed on the Axis of Resistance throughout the October 7 War. Supreme Leader International Affairs Adviser Ali Akbar Velayati met with Palestinian Islamic Jihad (PIJ) representative to Iran Nasser Abu Sharif and Hamas representative to Iran Khaled Qaddoumi in Tehran on May 28.[68] Velayati reiterated Iran’s longstanding objective to destroy the state of Israel by using proxy groups.[69] Sharif stated on May 14 that Iran has continued to fund PIJ.[70] Velayati also praised the Houthis for their continued attacks targeting Israel.[71]
The Iranian rial depreciated from 827,500 rials to one US dollar on May 27 to 828,800 rials to one US dollar on May 28.[78]
https://www.understandingwar.org/backgrounder/iran-update-may-28-2025
Iran Update, May 28, 2025
A US journalist reported on May 29 that Iran and the United States are trying to reach a “political framework text” before the next International Atomic Energy Agency (IAEA) Board of Governors meeting on June 9 and 10.[1] CTP-ISW cannot verify this report, although Iran may calculate that reaching an interim deal with the United States before the meeting would delay or prevent snapback sanctions. The Joint Comprehensive Plan of Action (JCPOA) snapback mechanism, which expires in October 2025, allows JCPOA signatories to reimpose UN Security Council sanctions on Iran in the event of “significant non-performance by Iran of JCPOA commitments.”[2] The IAEA releases a quarterly verification and monitoring report on Iran’s nuclear program.[3] The IAEA Board of Governors will discuss the IAEA’s next quarterly report at the June Board of Governors meeting. The IAEA previously passed a censure resolution proposed by the E3 (the United Kingdom, France, and Germany) in November 2024 that requires the IAEA to produce a “comprehensive report” about Iranian nuclear activities in addition to the IAEA’s regular verification and monitoring reports.[4] IAEA Director General Rafael Grossi stated on May 28 that the IAEA will release the comprehensive report “soon.”[5] The IAEA’s next quarterly report and the comprehensive report will both almost certainly confirm Iranian noncompliance with the JCPOA, which will lay the foundation for the E3 to impose snapback sanctions. The E3 recently threatened to trigger snapback sanctions on Iran by August if Iran and the United States do not reach a “substantial deal” by then.[6] Iran may calculate that reaching an interim deal with the United States would delay or prevent snapback sanctions by demonstrating Iran’s willingness to resolve the nuclear issue.[7]
IAEA Deputy Director General and head of the IAEA Safeguards Department Massimo Aparo inspected two undeclared Iranian nuclear sites in Tehran Province on May 28 as part of the March 2023 IAEA-Iran Joint Statement.[8] The joint statement identified three locations in Iran that contain undeclared nuclear material and equipment: Turquzabad, Varamin, and Marivan.[9] The IAEA reported in May 2023 that Marivan is “no longer an outstanding issue,” which suggests that Aparo visited the Turquzabad and Varamin sites during his visit to Iran.[10] The most recent IAEA Non-Proliferation Treaty (NPT) Safeguards Agreement report from February 2025 stated that there was no progress toward implementing the March 2023 Joint Statement between November 2024 to February 2025.[11]
Hezbollah appears to be cooperating with the Lebanese state to disarm itself in southern Lebanon while likely attempting to regenerate its forces north of the Litani River. Lebanese Prime Minister Nawaf Salam told the Wall Street Journal on May 28 that the Lebanese state has achieved about 80 percent of its objectives to disarm Hezbollah in southern Lebanon.[19] Unspecified senior Arab officials said that the United States has provided Israeli intelligence to the Lebanese Armed Forces (LAF) about Hezbollah’s remaining stockpiles and positions in southern Lebanon.[20] An unspecified Israeli military official said that the Israel Defense Forces (IDF) is “pleased by” the LAF’s success in disarming Hezbollah.[21] Hezbollah has reportedly cooperated with the LAF to reassert state control over southern Lebanon since the November 2024 Israel-Hezbollah ceasefire, including by reportedly ordering its fighters who are not from southern Lebanon to vacate positions and allowing the LAF to take control of the area.[22] Unspecified senior Lebanese security officials confirmed on May 28 that Hezbollah has cooperated with the LAF to disarm it in southern Lebanon.[23] Hezbollah’s cooperation with the LAF in the south likely reflects its degraded state and its prioritization of “sheltering and rebuilding” its forces.[24] Hezbollah also likely seeks to focus its near-term efforts on recalibrating its domestic political strategy and resecuring its political future in Lebanon.
Islamic Revolutionary Guards Corps (IRGC) Spokesperson Brigadier General Ali Mohammad Naeini expressed concern about Iran’s response to perceived “cognitive warfare.”[40] Iranian officials use the term “cognitive warfare” to describe Iran’s enemies’ alleged efforts to conduct psychological operations and instill feelings of distrust and hopeless among the Iranian population in order to facilitate regime collapse. Naeini stated that Iran faces “serious challenges” confronting “cognitive warfare,” particularly “cognitive warfare” that is directed at Iranian youth. Naeini claimed that Iran’s enemies seek to undermine Iran’s national and cultural identity through narrative manipulation, media distortion, and perception warfare. Naeini urged structural reforms to strengthen the regime’s narrative control and cultural resilience. Naeini also called for intensifying “explanation jihad” efforts to counter cognitive threats. “Explanation jihad” is an Iranian regime theory that indoctrinating and ideologizing the population, especially Iranian youth, will increase public support for the regime and reduce anti-regime sentiment.[41] Iranian officials have historically sought to expand ideologization efforts to confront anti-regime sentiment rather than address the core issues and grievances that generate this sentiment.[42] Iran’s proposed 2025–2026 budget significantly increases funding for religious and ideological institutions, which highlights the regime’s efforts to expand ideologization efforts.[43] The IRGC Baghiyatollah al Azam Sociocultural Headquarters and Islamic Propaganda Organization are set to receive a 233 percent and 177 percent funding increase, respectively, in the current .[44]
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