With the current situation in the Middle East, parties are wondering more and more whether, and if so, to what extent, they are still allowed to do business with certain countries, entities and individuals. For businesses active within the field of transport, energy, trade or financial services, a clear understanding of the applicable legislation regarding countries such as Iran is of vital importance.
Development of the sanctions regime against Iran
The EU sanctions against Iran have been in force for almost twenty years already. Lately however, these sanctions have become increasingly relevant and impactful. In 2006, the United Nations imposed the first sanctions against Iran. These UN sanctions have been adopted and extended by the European Union. Since 2010, the EU further imposed additional autonomous sanctions, that go beyond the UN sanctions.
In 2015, the sanctions imposed against Iran were (temporarily) alleviated by means of the Joint Comprehensive Plan of Action (JCPOA, or: ‘Iran Nuclear Deal’). The United States unilaterally withdrew from this deal, which meant that from that point onwards, the U.S. once more maintained a stricter sanctions regime against Iran than the EU. This led to a lot of uncertainty for businesses that were operating on an international scale, as the sanctions regimes of the United States and the European Union were no longer aligned.
Following the recent conflict in the Middle East, the European Union re-imposed the stricter sanctions against Iran that applied before the JCPOA (the so-called ‘snap-back’). Read more about this in our previous article. In 2026, the European Union expanded the sanctions against Iran. For example, extra entities and individuals were added to the sanctions list.
Which sanctions apply when dealing with Iran?
The current EU sanctions imposed against Iran can be divided into four categories:
- Financial sanctions: this concerns inter alia the ‘asset freezes’ applicable to certain entities and individuals. At this point in time, 263 persons and 53 entities are included on the EU sanctions list against Iran. As the conflict in the Middle East progresses, the EU can choose to add additional names to this list. It is therefore important to always consult the most recent version of this sanctions list. The sanctioned entities and individuals mainly concern energy companies, shipping companies and Iranian banks;
- Trade and export restrictions: certain trade restrictions apply when dealing with Iran. It mainly concerns a prohibition to supply dual use and military goods, and trade restrictions related to the energy, oil and petrochemical sector. Further, certain export restrictions apply related to technology and industrial software;
- Transport and logistics: the transport and logistics sector is also specifically targeted in the EU sanctions against Iran. For example, there are restrictions for the Iranian aviation and shipping sector, and there is a prohibition on providing any services for certain Iranian ships (or cargo);
- Targeted sanctions (listing): finally, there are certain targeted sanctions in place, more specifically against the Islamic Revolutionary Guard Corps. Multiple travel bans apply and there are specific sanctions imposed against cyber activities and the production of drones.
Because of the uncertain situation in the Middle East, the development of the EU sanctions against Iran remains uncertain as well. Companies need to be alert to rapid changes in the sanctions regime.
Required notification and authorisation for payments to and from Iran
An important point of interest for the day-to-day practice is the requirement to notify, and/or to receive authorisation for a large part of the payments to and from Iran, Iranian persons or Iranian companies. In a lot of cases, these payments are only possible after prior notification or permission from the Ministry of Finance.
Important differences with the Russia sanctions
The EU sanctions against Iran significantly differ from the sanctions imposed against Russia. The Iran sanctions specifically target certain issues (development of nuclear weapons) and sectors that could contribute to those issues (banks, specific goods and energy). The sanctions against Russia are much broader. This makes the Iran sanctions more specific, but also legally more complex.
How can we help?
We advise clients on:
- Sanctions compliance analyses and risk assessment;
- Contract restructuring (contractual limitation of risks);
- Interaction with competent authorities such as the Ministry of Finance and customs;
- Crisis management in case of (possible) violations;
- Proceedings/arbitration involving sanctions.
More information
Kneppelhout has extensive experience with sanctions and the practical aspects thereof. Our attorneys can advise on complex sanctions regulations.
