The snapback mechanism against Iran – reintroduction of EU sanctions

On the night of September 28, 2025, the deadline for the so-called "snapback mechanism" initiated by Germany, France, and the United Kingdom expired. This means that the UN Security Council sanctions against Iran, which had been suspended since January 2016, are back in force. The possibility of such a re-entry was enshrined in international law in the 2015 Vienna Agreement on the Iranian nuclear program (Joint Comprehensive Plan of Action, JCPoA). The EU reacted immediately and transposed the UN sanctions into directly applicable EU law through Regulation (EU) 2025/1975 and Implementing Regulations (EU) 2025/1980 and 2025/1982. These regulations reinstated the restrictions that had been removed from the EU-Iran Sanctions Regulation (EU) No. 267/2012 in January 2016. This means that almost all previously lifted sanctions against Iran are back in force. The regulation entered into force on September 30, 2025, and is directly applicable in all EU Member States. Violations can be punished nationally under criminal or administrative law. Sectoral Restrictions The core of the regulation is a far-reaching sectoral ban on the sale, supply, transfer, and export of certain goods, including technologies and software, as well as the provision of technical assistance and financial resources related to these goods to Iranian persons, organizations, and entities (“POE”) or for use in Iran – regardless of whether the transaction takes place within or outside the EU, directly or indirectly. The prohibitions apply in particular to dual-use goods, military equipment, components for uranium enrichment, missile technologies, and key technology and equipment for the oil, gas, and petrochemical sectors. Furthermore, industrial software, shipbuilding equipment, certain metals, graphite, precious metals, gold, and diamonds are also covered. At the same time, certain imports of goods originating in or exported from Iran are also prohibited, including crude oil and petroleum products, natural gas, and petrochemical products. For contracts concluded before September 30, 2025, as well as for ancillary contracts necessary for the fulfillment of such contracts, (partially reportable) legacy contract rules are provided for fulfillment until January 1, 2026. Restrictions apply in particular if the subject matter of the contract is considered sensitive with regard to potential military or nuclear use. The regulation also contains further exemptions and authorization options, for example, for medical, pharmaceutical, or humanitarian purposes. Authorizations must be applied for at the relevant national authorities (in Germany, the BAFA) and reviewed in accordance with the provisions of the regulation. This applies in particular to services or financing related to listed goods. Furthermore, extensive restrictions on services relating to Iranian ships have been reinstated in the regulation. These measures are supplemented by comprehensive financial sanctions. The National Iranian Oil Company (NIOC), the National Iranian Gas Company, the Islamic Republic of Iran Shipping Lines (IRISL), Bank Melli, and the European-Iranian Trade Bank (EIH) have been newly (re)added to the sanctions list. All funds and economic resources of listed Iranian POE entities must be frozen, and it is prohibited to provide them with funds or economic resources, directly or indirectly. Exceptions are possible within narrow limits.

Restrictions on money transfers and financial services

Payment flows between EU financial institutions and Iranian banks or other Iranian POE have once again been subject to extensive restrictions. Depending on the amount, purpose, and parties involved, tiered reporting and authorization requirements apply, with transfers under EUR 10,000 generally exempt from authorization and reporting requirements. For transactions consisting of multiple partial payments, the entire transaction is considered. Authorizations (for which the Deutsche Bundesbank is responsible in Germany) are deemed granted unless they are explicitly rejected within a specific timeframe. Financial institutions are required to exercise increased due diligence, document transactions, report suspicious activity, and retain records for a minimum of five years. Further regulations prohibit entering into new business relationships with Iranian financial institutions, such as opening accounts or forming joint ventures, if these are established after the cut-off date of September 30, 2025. Trading in or brokering government or government-guaranteed bonds with Iranian participation is also prohibited, as is the provision of insurance or reinsurance services – with limited exceptions, such as for existing contracts, mandatory insurance, or unlisted individuals.