The EU And UN Reintroduce Extensive Sanctions Against Iran

The sanctions bring back restrictions that were originally lifted in 2015 when the Iran nuclear deal (officially called the Joint Plan of Action or JCPoA) was signed. In the time leading up to the snapback, only a limited number of Iran-related sanctions were in force at EU level, but now, the reinstatement of historical sanctions results in a much stricter regulatory landscape. The restored measures mainly target Iran's nuclear proliferation activities and contain an arms export ban, but also contain restrictions on a selection of key industries in the country, including on trade, financial services and energy.

Trade-related sanctions

• Export ban to Iran of items, materials, goods, and/or technologies that may contribute to Iran's enrichment-related and reprocessing activities and ballistic missile programmes. Businesses should be particularly aware of the Annexes which list specific items, technologies (etc.) that are banned.
• Restrictions also apply on imports, purchase, and transport of crude oil, natural gas, petrochemical and petroleum products and related services. Technical assistance across various sanctions types is also prohibited.
• Apart from the above, it is also expressly mentioned that restrictions exist on dual-use goods and technologies. Dual-use items are items that can be used both in a military context as well as for civilian purposes.
• Trade in gold and various precious metals has been targeted.
• Designations have been made against individuals and entities associated with Iran's nuclear and military programmes, effectively eliminating any possibility of commercial trade with such parties (directly or indirectly).

Overall, EU actors should conduct enhanced due diligence on Iran-related transactions, including if dealing with indirect supplies through third countries with potential commercial ties to Iran.

Considering the rapid development of supply chains' change in defence and national security sectors, EU actors should be aware of risks of circumvention, both in a sanctions and export controls context. This includes transactions involving dual-use or "catch-all" items, which is also a highly relevant assessment in an Iran context. Catch-all items are formally speaking not Control List items, but since they nonetheless share certain characteristics with dual-use items, they are therefore 'controlled' in an export-controls context.

Financial services and banking

• Assets of the Central Bank of Iran and major Iranian commercial banks are frozen.
• Banks are prohibited from maintaining correspondent banking relationships with designated Iranian financial institutions.
• Prohibition against the sale or purchase of, or brokering or assistance in the issuance of, public or public-guaranteed bonds to and from the Government of Iran, the Central Bank of Iran or Iranian banks, including branches and subsidiaries, and financial entities controlled by persons and entities domiciled in Iran.

Financial institutions are expected to review and update their compliance systems in line with the latest measures. This can have a spillover effect on EU businesses since their financial partners may make both legal and commercial decisions, including based on governance considerations and to address indirect circumvention risks in markets closely tied to Iranian trade.

Energy and transport sectors

• Ban on sale or supply of key equipment used in various areas of the energy sector.
• Iranian cargo flights are prevented from accessing EU airports, including a prohibition regarding maintenance and service of aircrafts or vessels carrying prohibited materials/goods.
• Certain naval equipment is also subject to restrictions.

What's next?

As sanctions rules become more complex and interconnected, businesses operating internationally must maintain tailored compliance. The Iran sanctions demonstrate the EU's continued willingness to target not only direct Iranian interests but also third-country facilitators.

Companies should ensure their internal compliance programmes are regularly updated to reflect the evolving sanctions landscape and include adequate risk assessment procedures for international transactions, ideally as part of robust frameworks enabling businesses to react proactively across all types of sanctions regimes.