European Union sanctions against Iran

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International sanctions against Iran are a set of punitive economic and diplomatic measures imposed by the United States, the European Union, the United Nations, and numerous other countries and international bodies. These sanctions have been applied across successive decades in response to a range of Iranian policies, including its nuclear programme, alleged support for terrorism, human rights violations, and its military conduct in the Persian Gulf. Iran was the most heavily sanctioned country in the world until Russia surpassed it following the 2022 Russian invasion of Ukraine.[1]

The first American sanctions were imposed in November 1979 after radical students seized the United States Embassy in Tehran. Although lifted in 1981, they were reimposed in 1987 and progressively expanded through successive US executive orders and legislation. The United Nations Security Council imposed multilateral sanctions beginning in December 2006 under United Nations Security Council Resolution 1737, after Iran refused to halt its uranium enrichment programme. The Joint Comprehensive Plan of Action (JCPOA) of 2015 led to the lifting of most UN and multilateral sanctions in exchange for verified limits on Iran's nuclear programme, but the United States withdrew from the agreement in May 2018, reimposing and expanding American sanctions. In August 2025, France, Germany, and the United Kingdom triggered the JCPOA's "snapback" mechanism, resulting in the reimposition of UN sanctions on 28 September 2025.[2]

The period from late 2025 to 2026 saw the most dramatic developments in decades. The 2025-2026 Iranian protests, triggered in part by sanctions-induced economic collapse, were violently suppressed, provoking new Western sanctions. On 28 February 2026, the United States and Israel launched coordinated military strikes against Iran, killing Supreme Leader Ali Khamenei and targeting nuclear and military infrastructure, in what became known as the 2026 Iran war.[3] Iran responded by closing the Strait of Hormuz and launching missile strikes across the region. A ceasefire took effect on 8 April 2026. Subsequent negotiations in Switzerland, mediated by Oman and Pakistan, led to the signing of a memorandum of understanding (MoU) on 17 June 2026 that initiated a 60-day framework for ceasefire, sanctions relief discussions, and nuclear talks.[4] On 22 June 2026, the US Treasury issued a 60-day waiver on sanctions on Iranian oil exports as part of the MoU's initial conditions.[5]

The sanctions had significant effects on Iran's economy, contributing to currency depreciation, high inflation, declining oil revenues, and restrictions on access to the international financial system.[6][7] Banking and financial restrictions also complicated the import of humanitarian goods, including medicines, despite formal exemptions for such trade.[8] Analysts, humanitarian organisations, and UN experts have debated the humanitarian consequences of the sanctions, while the United States and its allies have maintained that sanctions constituted the principal non-military means of pressuring Iran over its nuclear programme and regional activities.[9][10]

Background and early history

1979 sanctions and the hostage crisis

The first United States sanctions against Iran were imposed in November 1979, following the seizure of the American Embassy in Tehran by radical students and the taking of 52 American diplomats and citizens as hostages.[11] President Jimmy Carter issued Executive Order 12170, which froze approximately $8.1 billion in Iranian assets held in the United States, including bank deposits, gold, and other property, and imposed a trade embargo.[12] These sanctions were lifted in January 1981 as part of the Algiers Accords, which provided for a negotiated settlement and the release of the hostages.[13]

Reimposition and expansion, 1984-1996

During the Iran-Iraq War, which began in September 1980, the United States in 1984 prohibited weapon sales and all US assistance to Iran. In September 1987, following the discovery of a possible minefield in the Strait of Hormuz, Secretary of Defense Caspar Weinberger called for a UN arms embargo against Iran, though this was not realised at the time.[14] US sanctions were reimposed in 1987 in response to Iranian military actions in the Persian Gulf and Iranian support for terrorism.[15]

In 1995, in response to the Iranian nuclear programme and Iranian support for terrorist organisations, including Hezbollah, Hamas, and Palestinian Islamic Jihad, President Bill Clinton issued several executive orders. Executive Order 12957 of 15 March 1995 banned US investment in Iran's energy sector, while Executive Order 12959 of 6 May 1995 banned all US trade with and investment in Iran.[16]

The Iran and Libya Sanctions Act (ILSA) was signed on 5 August 1996, imposing sanctions on foreign firms investing in Iran's energy sector. The act was renamed the Iran Sanctions Act (ISA) in 2006 when provisions regarding Libya were terminated.[17]

United States sanctions

2000s expansion

Initial US sanctions targeting oil, gas, and petrochemicals, exports of refined petroleum products, and business dealings with the Islamic Revolutionary Guard Corps (IRGC) were progressively expanded to encompass banking and insurance transactions (including with the Central Bank of Iran), shipping, web-hosting services for commercial endeavours, and domain name registration services.[18]

On 31 July 2013, members of the United States House of Representatives voted 400 to 20 in favour of toughened sanctions against Iran.[19]

Withdrawal from the JCPOA and reimposition, 2018

On 8 May 2018, President Donald Trump announced that the United States would withdraw from the JCPOA.[20] The administration reinstated all previously lifted sanctions in November 2018, stating the purpose was to compel Iran to renegotiate on broader terms covering its missile programme and support for regional militant groups.[21]

In September 2019, the US imposed further sanctions in response to a suspected Iranian attack on Saudi Arabian oil facilities, targeting the assets of the Supreme Leader's inner circle.[22] On 8 October 2020, the US imposed further sanctions on 18 Iranian banks.[23]

Second Trump administration, 2025-2026

On 22 April 2025, the US Department of the Treasury imposed sanctions on Iranian businessman Reza Zarrab and his network of companies for facilitating the sale of Iranian liquefied petroleum gas (LPG) in violation of US sanctions, using a complex network of front companies and intermediaries.[24]

In February 2026, following the 2025-2026 Iranian protests and 2026 Iran massacres, the US imposed new sanctions on 30 individuals, companies, and vessels connected with Iranian oil exports and missile networks, escalating economic pressure ahead of renewed diplomatic talks.[25] US Treasury Secretary Scott Bessent stated that US sanctions policy had been a direct factor in Iran's currency instability and the resulting social unrest.[26]

Following the 2026 Iran war and the ceasefire of 8 April 2026, the United States maintained a naval blockade on Iran as part of "Operation Economic Fury", redirecting commercial vessels and seeking to further choke off Iranian oil exports while negotiations continued.[27] On 22 June 2026, the US Treasury issued a 60-day waiver on all existing US sanctions on the production, delivery, and sale of Iranian crude oil, petrochemical products, and petroleum products, valid through 21 August 2026, as part of the MoU signed on 17 June 2026.[28][29] The waiver also permitted the United States to import Iranian crude oil and petroleum products for domestic use.

United Nations sanctions

The United Nations Security Council adopted a series of resolutions imposing sanctions on Iran after the International Atomic Energy Agency (IAEA) Board of Governors found that Iran had failed to comply with its safeguards obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). The sanctions were imposed following Iran's refusal to suspend uranium enrichment and related activities, as required by Security Council resolutions beginning with Resolution 1696 (2006).[30][31][32]

Security Council resolutions

Most UN sanctions were lifted on 16 January 2016 following IAEA verification of Iranian compliance.[35]

US snapback attempt, 2020

On 14 August 2020, the UN Security Council rejected a US-proposed resolution to extend the global arms embargo on Iran, with only the Dominican Republic supporting the United States. Eleven members abstained, while Russia and China voted against.[36] The UN arms embargo expired on 18 October 2020 as provided by the JCPOA.[37]

E3 snapback mechanism, 2025

In July 2025, the E3 (France, Germany, and the United Kingdom) warned that the snapback mechanism would be triggered if no satisfactory progress was made in nuclear negotiations by the end of August 2025.[38] On 28 August 2025, the E3 formally initiated the snapback process, citing Iran's accumulation of a highly enriched uranium stockpile that, in their assessment, "lacks any credible civilian justification and is unprecedented for a state without a nuclear weapons program".[39] Iran's Foreign Minister Abbas Araghchi declared the activation "unjustified, illegal, and lacking any legal basis".[40]

On 28 September 2025, UN sanctions were officially reimposed on Iran following expiry of the 30-day window.[41] China and Russia rejected the snapback as legally invalid.[42]

European Union sanctions

On 23 January 2012, the Council of the EU announced an embargo on Iranian oil exports, effective July 2012, and a freeze on assets held by the Central Bank of Iran, with restrictions also placed on trading of precious metals and petrochemicals with Iran.[43] These measures were described by European officials as the toughest sanctions the EU had imposed against any country.[44]

Following the US withdrawal from the JCPOA in 2018, the EU enacted an updated blocking statute on 7 August 2018 to nullify US secondary sanctions on entities trading with Iran.[45]

In September 2023, the E3 announced they would retain certain JCPOA-era sanctions scheduled to expire, in order to deter Tehran from selling drones and missiles to Russia.[46]

In May 2024, the EU expanded its sanctions regime to ban the sale of missile components, in addition to the ban on unmanned aerial vehicle components adopted in July 2023, targeting Iran's military support for Russia's war against Ukraine.[47]

On 12 April 2021, the EU sanctioned eight Iranian militia commanders and security officials over human rights abuses, the first such sanctions since 2013.[48]

In April 2025, the EU imposed sanctions on seven Iranian prison and judicial officials and two institutions in response to a campaign of detaining EU nationals, targeting figures including the head of Tehran's Evin Prison.[49]

In March 2026, the EU approved new sanctions against 19 Iranian officials and entities following human rights violations related to the suppression of Iranian protesters.[50] The EU also imposed sanctions on the Iranian company Emennet Pasargad over cyber-attacks against European countries.[51]

SWIFT disconnection

On 17 March 2012, the SWIFT electronic banking network disconnected all Iranian banks identified as being in breach of EU sanctions from its international network.[52] Iranian banks were reconnected to SWIFT in February 2016 following JCPOA implementation, but were subsequently disconnected again in November 2018 after the US reimposed sanctions.[53]

United Kingdom sanctions

In July 2023, British Foreign Secretary James Cleverly announced a new UK sanctions regime for Iran, expanding the United Kingdom's powers to sanction Iranian decision-makers involved in weapons proliferation.[54]

In February 2026, in response to the 2026 Iran massacres, the British government sanctioned ten Iranian officials, including police chiefs and IRGC members, as well as the Police Command of the Islamic Republic of Iran (FARAJA), for their role in suppressing Iranian protesters.[55] The UK condemned the Iranian counter-strikes following the 28 February 2026 US-Israeli attacks, called for a resumption of diplomacy, and deployed aircraft and naval assets in a defensive role in the region, though it did not participate militarily in the initial strikes.[56]

Australian and other national sanctions

In February 2026, the Australian government imposed sanctions on twenty Iranian individuals and three organisations in response to the Iranian government's violent suppression of protesters during the 2026 Iran massacres.[57]

Canada imposed a ban on dealings in the property of designated Iranian nationals, a complete arms embargo, and restrictions on oil-refining equipment, investment in the Iranian oil and gas sector, and the provision of ships or services to Islamic Republic of Iran Shipping Lines.[58]

Following the 2026 Iran massacres, Ukraine designated the IRGC as a terrorist organisation on 2 February 2026, citing the crackdown on protesters and Iranian supply of Shahed drones to Russia.[59]

FATF blacklisting

On 21 February 2020, Iran was placed on the Financial Action Task Force (FATF) blacklist.[60] On 25 October 2024, the FATF again placed Iran on its blacklist, alongside Myanmar and North Korea, due to Iran's failure to enact laws preventing money laundering and the financing of terrorism through its support for the Axis of Resistance.[61][62]

The 2026 Iran war and sanctions diplomacy

Background: protests, massacres, and military buildup

The 2025-2026 Iranian protests erupted on 28 December 2025 following sharp depreciation of the Iranian rial and rising inflation exacerbated by reimposed international sanctions. The protests, the largest since the Iranian Revolution, were met with severe repression during the 2026 Iran massacres, in which thousands of civilians were killed by government forces.[63] In January 2026, the internet was shut down across Iran for more than two weeks following the outbreak of protests.[64]

The United States began bolstering its military presence in the region and President Trump publicly encouraged Iranian protesters, stating that help was "on the way".[65]

February 2026 negotiations and military strikes

On 6 February 2026, the United States and Iran began indirect nuclear negotiations in Geneva, mediated by Oman, aimed at reaching a deal to curb Iran's nuclear programme. Three rounds of talks were held through 26 February 2026. The mediating Omani foreign minister stated that significant progress had been made and that Iran had agreed to degrade its nuclear stockpiles to the lowest level possible, including an effective commitment to never acquire nuclear material capable of producing a bomb. President Trump said he was "not thrilled" with the progress of the talks.[66][67]

On 28 February 2026, less than two days after the conclusion of the third round of nuclear talks, the United States and Israel launched coordinated military strikes against Iran, targeting nuclear facilities, military infrastructure, and regime leadership. The strikes killed Supreme Leader Ali Khamenei and several other senior Iranian officials.[68][69] President Trump stated that the United States had begun "major combat operations" aimed at eliminating threats from the Iranian regime. Iran appointed Khamenei's son as his successor and launched retaliatory missile and drone strikes against Israel, US military bases in Bahrain, Qatar, Kuwait, the UAE, and Saudi Arabia, and closed the Strait of Hormuz to commercial shipping.[70] The closure of the strait, through which nearly one-fifth of the world's oil and natural gas supply passes, caused a major global energy supply disruption.[71]

A ceasefire took effect on 8 April 2026. On 21 June 2026, following renewed tensions, the US conducted additional strikes on the Fordow, Natanz, and Isfahan nuclear facilities in Iran. Trump declared a fresh ceasefire on 24 June 2026.[72]

June 2026 MoU and sanctions relief

On 14 June 2026, US and Iranian officials reached a preliminary ceasefire and sanctions framework. Pakistani Prime Minister Shehbaz Sharif, who had served as a mediator, announced on 15 June that a formal agreement would be signed in Switzerland. The memorandum of understanding (MoU) was signed on 17 June 2026 in Switzerland.[73]

The MoU established a 60-day framework, extendable by mutual consent, covering the following elements:

  • The Strait of Hormuz would remain open with no tolls and Iran would clear mines it had deployed in the strait.
  • The United States would lift its naval blockade on Iranian ports and issue sanctions waivers to allow Iran to sell oil freely.
  • Iran reaffirmed it would not procure or develop nuclear weapons, and both sides agreed to negotiate the disposition of Iran's enriched uranium stockpile.
  • Iran agreed to maintain the current status quo of its nuclear programme while the United States agreed not to impose new sanctions or deploy additional forces.
  • The United States committed to ending all sanctions facing Iran, including UN Security Council resolutions and all unilateral US sanctions, on an "agreed-upon schedule" as part of a final agreement.
  • Regional partners and the United States committed to developing a plan allocating at least $300 billion toward rebuilding Iran's damaged economy, with the implementation mechanism to be established in the final deal.
  • Until sanctions are terminated, the US Treasury would issue waivers for exporting Iranian crude oil, petroleum products, and associated services including banking, transportation, and insurance.[74][75]

On 22 June 2026, the US Treasury confirmed a 60-day waiver on all existing US sanctions on the production, delivery, and sale of Iranian crude oil, petrochemical products, and petroleum products, valid through 21 August 2026.[76][77] The waiver enabled Iran to sell oil at full market rates rather than at a discount, representing, in the assessment of analysts and US officials, a significant economic concession. Vice President JD Vance stated that the US and Iran had made "a lot of great progress", and identified four accomplishments: permitting IAEA nuclear inspections, building a mechanism to reopen the Strait of Hormuz, establishing a regional ceasefire deconfliction mechanism in Lebanon, and setting up a process for future negotiations.[78]

Four working groups were established following technical talks in Switzerland: sanctions termination; nuclear affairs; reconstruction and economic development; and monitoring and implementation of agreements reached.[79]

Outstanding issues

As of late June 2026, several major issues remained unresolved in negotiations. The United States maintained that Iran must conduct "zero enrichment" of uranium, a demand Iran had previously rejected. The fate of Iran's existing stockpile of highly enriched uranium, which the IAEA verified in early June 2025 as exceeding 400 kg enriched to 60 per cent purity, remained a central issue. The question of frozen Iranian assets, estimated at approximately $100 billion, was also contested: Iran sought immediate full release, while the US maintained that release would only occur upon verified implementation of a final agreement.[80][81]

Iran's foreign ministry spokesman stated that Tehran did not negotiate on its nuclear programme during the initial round of Switzerland talks and had not accepted new commitments, while the US claimed Iran had agreed to allow IAEA inspections to resume. Iran denied confirming that agreement.[82] The status of Iran's ballistic missile programme, the lifting of all US secondary and unilateral sanctions, war reparations, and regional security arrangements, including Lebanon and Iran-backed armed groups, remained additional sticking points.[83]

The Joint Comprehensive Plan of Action (2015)

On 2 April 2015, the P5+1 and Iran reached a provisional framework agreement in Lausanne, Switzerland. The final agreement, the Joint Comprehensive Plan of Action (JCPOA), was adopted on 18 October 2015.[84] Under the JCPOA, Iran agreed to limit uranium enrichment to a maximum purity of 3.67 per cent, cap its enriched uranium stockpile at 300 kg for 15 years, and accept enhanced IAEA monitoring, in exchange for the lifting of most UN and multilateral sanctions. UN sanctions were lifted on 16 January 2016.[85]

Sanctions relief affected Iran's economy in four principal ways: the release of approximately $29 billion in frozen assets; the removal of sanctions on Iranian oil exports; permission for foreign firms to invest in Iran's oil and gas and other sectors; and Iran's restored access to the global banking system, including SWIFT.[86]

Economic effects

Oil exports and revenues

Sanctions substantially reduced Iran's oil export revenues. The International Energy Agency estimated that Iranian oil exports fell to 860,000 barrels per day in September 2012, down from 2.2 million barrels per day at the end of 2011.[87] According to Undersecretary of State William J. Burns, Iran was losing as much as $60 billion annually in energy investment as a direct result of sanctions.[88]

Currency and inflation

The value of the Iranian rial declined sharply from autumn 2011, falling by up to 80 per cent in some periods, causing widespread panic among the Iranian public and prompting the government to raise interest rates.[89] The Central Bank of Iran estimated an inflation rate of approximately 27 per cent in January 2013, while economists believed the actual rate was significantly higher.[90] Iran's currency entered a new freefall in late 2025, prompting the large-scale protests of December 2025 and early 2026. By the time of the 2026 war, US officials stated that Iran's foreign reserves were near zero and annual inflation was running at nearly 70 per cent.[91]

Broader economic impacts

Research found that sanctions resulted in welfare losses across all income groups in Iran, with wealthier groups experiencing larger absolute losses.[92] Iran's GDP contracted by about 3 per cent in 2012 and a further 1.2 per cent in 2013, according to the Economist Intelligence Unit.[93] Automobile production fell approximately 40 per cent from 2011 levels. The United Nations Special Rapporteur Idriss Jazairy stated that the reimposition of US sanctions after the 2018 withdrawal was destroying Iran's economy and driving millions into poverty.[94]

Analysis published by S&P Global concluded that broad US sanctions had contributed to the consolidation of power in Iran rather than weakening the regime, as state enterprises and government-connected companies gained commercial advantage through political access to sanctions circumvention networks.[95]

The 2026 war further devastated Iran's economy. The closure of the Strait of Hormuz caused the largest supply disruption of the global oil market on record, affected the natural gas, fertiliser, aviation, and tourism industries globally, and caused severe volatility in financial markets.[96]

Humanitarian impact

Pharmaceuticals and medical equipment are formally exempt from international sanctions, but Iran has faced shortages of drugs for the treatment of numerous illnesses, because exclusion from international payment systems prevented purchasing even technically permitted goods.[97] Drug imports from the US and Europe decreased by approximately 30 per cent in 2012.[98] In 2013, approximately 85,000 cancer patients required chemotherapy that had become scarce, while some 40,000 haemophiliacs could not obtain blood-clotting medicines and 23,000 Iranians with HIV/AIDS had severely restricted access to needed medications.[99]

In 2020, China, the United Kingdom, and others pressed the United States to ease sanctions to help Iran fight COVID-19. Human Rights Watch urged the United States to ease sanctions to ensure access to essential humanitarian resources during the pandemic.[100]

The 2026 war added new humanitarian dimensions. US-Israeli strikes damaged at least 120 museums and historical sites and killed more than 1,900 people in strikes on Iran by June 2026.[101] The Office of the United Nations High Commissioner for Human Rights stressed that sanctions must not harm the human rights of ordinary citizens, and the UN Secretary-General condemned the US-Israeli strikes.[102]

Sanctions evasion

Shadow fleet

Iran developed extensive mechanisms to circumvent sanctions, including through a network of vessels known as the shadow fleet, which conceals its activities through falsified tracking data, vessel renaming, and flag-of-convenience registrations. In October 2025, Reuters exposed the involvement of the Maritime Mutual Insurance Association (MMIA), a New Zealand-based company, in providing insurance to vessels evading Western sanctions on both Iranian and Russian oil. Of 231 tankers identified as insured by Maritime Mutual, 130 were found to have carried sanctioned cargo, transporting an estimated $18.2 billion of Iranian oil and $16.7 billion of Russian energy products.[103] New Zealand authorities subsequently investigated Maritime Mutual for potential money laundering and terrorism financing violations.[103]

Trade networks and front companies

Iran used front companies and third-country intermediaries to access goods and technologies subject to sanctions, as well as barter trade to circumvent financial transaction restrictions.[104] China became Iran's largest remaining trading partner, absorbing displaced oil exports and providing manufactured goods. In July 2022, Iran and Gazprom signed a memorandum of understanding worth approximately $40 billion, supporting the development of Iranian gas fields.[105]

"Resistance economy"

Iran adopted what it termed a "resistance economy", replacing imports with domestically produced goods and banning luxury imports.[106] Some analysts noted that the reliance on smuggling to supply goods paradoxically strengthened government-connected enterprises and weakened civil society.[107]

Effectiveness and debates

Academic and policy assessments of the effectiveness of sanctions against Iran are divided. Proponents argue that sustained international pressure contributed to bringing Iran to the negotiating table for the JCPOA in 2015. Iranian Foreign Minister Ali Akbar Salehi acknowledged in 2011 that sanctions were having an impact.[108]

Critics contend that sanctions proved counterproductive over the long term, consolidating rather than weakening the Iranian state and disproportionately harming the civilian population. Analysis by S&P Global found that broad US sanctions had tightened the regime's grip on the economy rather than loosening it.[109] Gallup polling in 2013 found that Iranians attributed economic hardship primarily to the United States rather than to their own government, suggesting limits to the political leverage of economic pressure.[110]

The 2026 war represented a fundamental departure from the sanctions-centred approach to Iranian policy, though the resulting MoU incorporated sanctions relief as a central incentive. Critics, including legal scholars and international relations experts, described the US attacks as illegal under US law and a violation of Iranian sovereignty. The Union of Concerned Scientists and others noted the longstanding US-Israeli double standard on nuclear non-proliferation in the Middle East.[111]

Frozen assets

After the Iranian Revolution in 1979, the United States froze approximately $11 billion in Iranian assets (in 1980 dollars).[112] Between 2008 and 2013, further billions of dollars of Iranian assets abroad were seized or frozen in multiple countries. The chairman of the Iranian Majlis Planning and Budget Committee stated that $100 billion of Iranian funds had been frozen in foreign banks as a result of sanctions.[113]

The June 2026 MoU committed the United States to making frozen Iranian assets "fully available for use" with the mechanism to be established in the final deal. Iran's top negotiator called for half of the estimated $25 billion in frozen assets to be released at MoU signing, with the other half released within sixty days, a position the United States did not accept in the initial agreement.[114]

The European Union's General Court annulled EU sanctions against two of Iran's largest banks, Bank Saderat and Bank Mellat, after both institutions successfully challenged the restrictive measures on procedural and evidentiary grounds.[115][116][117]

Critics, including legal scholars, described the February 2026 US-Israeli strikes on Iran as illegal under both US and international law, executed without congressional authorisation and in violation of the UN Charter. The UN Secretary-General and several countries condemned the strikes, though the UN Security Council subsequently passed a resolution condemning Iran's retaliatory strikes on Gulf states.[118]

See also

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Further reading

  • Cordesman, Anthony H., Bryan Gold, and Chloe Coughlin-Schulte. Iran: Sanctions, Energy, Arms Control, and Regime Change (Rowman & Littlefield, 2014)
  • Marossi, Ali Z., and Marisa R. Bassett, eds. Economic Sanctions under International Law: Unilateralism, Multilateralism, Legitimacy, and Consequences (T.M.C. Asser Press, 2015)