EU ramps up sanctions on Iran over Strait of Hormuz note-0
Individuals and policies that ‘prevent vessels from entering and exiting the strait’ have now been targeted, writes Stacy Keen
The EU has extended the scope of its sanction regime targeting Iran to allow designations of those impeding lawful transit passage and freedom of navigation, particularly in the Strait of Hormuz.
The amended sanctions framework will allow individuals and entities involved in Iran’s actions and policies that “threaten navigation or prevent vessels from entering and exiting the Strait of Hormuz” to be targeted by sanctions restrictions, in a marked expansion of the EU’s existing sanctions regime against Tehran.
Since the US and Israel launched joint airstrikes on Iran on 28 February, the Strait of Hormuz – the global maritime transit chokepoint for oil and liquefied natural gas (LNG) – has been effectively gridlocked, forcing thousands of ships to be rerouted.
The move to expand the EU’s Iran sanctions framework extends the scope of the restrictive measures it adopted against Iran in the wake of Russia’s invasion of Ukraine in 2022. Previously, that framework permitted the EU to target both those involved in Iran’s military support for Russia’s war of aggression against Ukraine and armed groups and entities operating in the Middle East and Red Sea region.
The EU said it was introducing the new designation criteria “in response to Iran’s actions undermining the freedom of navigation in the Strait of Hormuz”. The new designation criteria, which took effect on 22 May, permits travel restrictions and asset freezes to be imposed on targeted individuals and entities.
The asset freeze prohibits EU citizens and companies from making funds, or economic resources available to, or for the benefit of, targeted individual and entities, or dealing such funds/resources that are held, owned or controlled by those targeted.
The announcement follows a political agreement reached by EU ministers at the Foreign Affairs Council last month. In a statement, the EU Council said Iran’s actions to date against vessels transiting through the Strait of Hormuz violated international law and that such actions “infringe upon established rights of both transit and innocent passage through international straits”.
On 8 June, the first designations were made under the new framework, against the naval unit of the Islamic Revolutionary Guard Corps (IRGC) and two individuals: Mohammad Akbarzadeh, a deputy commander and spokesperson for the IRGC naval unit, and Hamid Hosseini, a representative of Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, Iran's largest private sector export union.
Such designations are specifically designed to coerce and influence those designated to change behaviours and influence change – in this case to support free navigation – making the EU’s intentions all too clear.
These individuals and entities have been designated by being listed in the annex to the relevant EU Regulation – for the purpose of EU sanctions these persons are referred to as “designated persons”. The application of the relevant sanctions extends beyond those expressly listed in the annex. Entities owned or controlled by designated persons are also subject to the same restrictions, including the asset freeze.
Stacy Keen, Partner and specialist in financial crime and compliance, Pinsent Masons
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