The Trump administration made headlines all over the world Monday with the announcement the U.S. government has designated Iran’s elite military unit known as the Islamic Revolutionary Guard Corps (IRGC) as a “foreign terrorist organization.” While this specific designation has been discussed a number of times in the past, many media outlets have pointed out this could be seen as an unprecedented move, as no formal government entity has ever earned a spot on the terrorist organization list before.

With tensions between the United States and Iran already high and frequent provocations from the IRGC in the Persian Gulf, it may be difficult to see how such a designation changes things for the United States, and more importantly, for Iran.

The designation comes with new sanctions, which include a freeze on any Iranian assets the IRGC owns within U.S. jurisdiction, though it seems likely the financial effect will be limited as Iran will have undoubtedly seen this coming. The larger implications will be diplomatic and political, complicating Middle East discourse for both Iran and the United States for years to come.

A number of prominent Iraqi political parties maintain close ties to the IRGC, as do many Shiite militias. Hezbollah, a Lebanese militant group, also maintains strong ties with the IRGC. Relations in both of these nations may be complicated for U.S. officials who will now be barred from working with groups that continue to openly cooperate with Iran’s terror-designated military branch. This added complexity is largely credited for previous administrations avoiding the terror designation, as military and intelligence gathering officials warned it could close off diplomatic and intelligence gathering channels.

However, the designation also comes with some potential benefits. As Republican U.S. Senators Tom Cotton of Arkansas and Ted Cruz of Texas point out, giving the IRGC a terror designation has been a long time coming. It also sends an important message to the Iranian government and any other government that may choose to support terror groups with the aim of destabilizing the Middle East. This designation will further alienate Iran from the rest of the world and shine a light on what Secretary of State Mike Pompeo refers to as the nation’s “malign activities.”

“Secretary Pompeo will continue to use all the tools at our disposal to press the regime to change its destructive policies for the benefit of peace in the region and for the sake of its own people, who are the longest-suffering victims of this regime,” Brian Hook, the State Department’s special representative for Iran, said this week. Hook also accused Iran of being responsible for the deaths of 608 U.S. service members fighting in Iraq between 2003 and 2011, citing newly declassified Department of Defense reports on the subject.

U.S. military officials are reportedly concerned about the possibility of Iranian retaliation against U.S. interests around the globe, though so far, the responses have been more about sarcasm than violence.

Mohammad Ali Jafari, the IRGC’s commander, called the decision “foolishness” and said U.S. troops in the Middle East would “lose their current status of ease and serenity” should the decision go through.

“If reports prove to be true that the stupid U.S. administration intends to designate the IRGC as a terrorist organization, then the IRGC [Revolutionary Guards] will also specify the U.S. Army as a group like ISIL in all parts of the world, especially the Middle-East,” Jafari said.