Considerable controversy surrounds the issues of whether the NCRI is merely a front group for the PMOI; whether the NCRI is involved in terrorism, or if it is "a legitimate dissident organization fighting for democracy in Iran" whose Western accusers are attempting to use as a bargaining chip in negotiation with its enemy the Islamic Republic of Iran.
The PMOI's armed wing is, or was, called the National Liberation Army of Iran (NLA). The Iranian government officially refers to the organization as the Monafeqin (literally, "Hypocrites"), maintaining that PMOI is not truly Islamic.
The United States, Canada, Iraq, and Iran have designated the PMOI a terrorist organization. On January 26, 2009, the Council of the European Union agreed to remove the PMOI from the EU terror list. The group said it was the outcome of a “seven-year-long legal and political battle”.
The PMOI and the NCRI claim to have provided the United States intelligence on Iran's nuclear program in 2002, and 2008