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.