EU Sanctions Against Iran 2026: What Companies with Iranian Links Must Review

Key data

If your company operates in banking, insurance, technology exports or maritime transport and has—or has had—relationships with Iranian counterparties, this regulation affects you directly from July 30, 2026. The EU Council has approved Regulation (EU) 2026/1891, which amends Regulation (EU) 2023/1529 and strengthens the sanctions framework against Iran in response to its continued military support to Russia in the war against Ukraine, as well as to militias and armed entities in the Middle East and the Red Sea.

The regulation is not entirely new: it updates and expands an existing sanctions regime. But each update may incorporate new designated persons and entities, which requires all affected companies to repeat the counterparty verification process without delay.

What does this regulation establish?

Regulation (EU) 2026/1891 amends Regulation (EU) 2023/1529, which is the base EU sanctions framework against Iran for its military involvement in the Ukraine conflict and destabilization of the Middle East and Red Sea. The amendment expands the existing restrictive measures.

The measures contemplated by the sanctions regime include:

• Asset freezing of designated persons and entities: no EU company or entity may make funds or economic resources available to the designated parties.
• Travel bans for natural persons included in the lists: they cannot enter or transit through EU territory.
• Obligation to verify counterparties: European companies must verify that their business partners, customers or suppliers do not appear on the designated lists.

The geopolitical context justifying this expansion is Iran's military support to Russia in the war against Ukraine—including the supply of drones and ammunition—and support for armed groups in the Middle East and Red Sea, with direct impact on freedom of navigation in that region.

Economic and operational impact

The impact is not merely reputational: non-compliance with EU restrictive measures can result in administrative and criminal sanctions in Member States. In Spain, the sanctions regime for restrictive measures can involve substantial fines and even criminal liability for directors.

From an operational perspective, affected companies must incur real costs in three areas:

• Review and update of compliance systems: counterparty screening programs must incorporate the new designated lists published with the regulation.
• Blocking of ongoing operations: any pending transaction with a newly designated entity or person must be frozen immediately, which can cause disruptions in supply chains or international payments.
• Legal advisory costs: verification of compliance in complex operations (export financing, maritime transport contracts, letters of credit) requires specialized legal review.

For financial entities, the risk is particularly high: any transfer of funds to a designated party, even indirectly through correspondents, may constitute a breach.

Who does it affect?

• Financial sector entities: banks, insurance companies, fund managers and payment entities with operations or correspondent relationships linked to Iran.
• Dual-use goods exporters: companies that export technology, electronic components, machinery or any goods that may have civil and military use.
• Maritime transport and logistics companies: shipping companies, freight forwarders and port operators with routes or calls in the Persian Gulf, Red Sea or Middle East.
• Companies with commercial contracts with Iranian counterparties: any European company that buys, sells or provides services to Iranian entities must verify that such entities are not designated.
• Advisors and consultants: law firms, consulting firms and tax advisors providing services to clients with Iranian links have their own due diligence obligations.

Practical example

Imagine a Spanish company exporting electronic components that has a supply contract with an Iranian company signed in 2024. Upon entry into force of Regulation (EU) 2026/1891 on July 30, 2026, the company must immediately verify whether its Iranian counterparty—or any natural person linked to it—appears on the updated designated lists.

If the counterparty appears on the list, the company cannot execute the contract or receive any payment derived from it. Any assets or funds linked to that entity must be frozen and reported to the competent authorities. Continuing with the operation, even through ignorance, can result in an administrative or criminal breach for the company and its directors.

This same scenario applies to a Spanish bank managing a letter of credit to finance that export: it must block the operation if it detects that any of the parties is designated.

What should companies do now?

1. Immediately review the updated designated lists: consult the official lists published with Regulation (EU) 2026/1891 in the EU Official Journal and compare them with your counterparty database.
2. Update compliance screening systems: ensure that your counterparty verification software incorporates the new designations. If you do it manually, establish a documented process.
3. Suspend ongoing operations with potentially affected counterparties: when in doubt, pause the operation before executing it. It is easier to resume a suspended operation than to manage a breach.
4. Notify the competent authorities if you detect assets of designated persons or entities in your possession, as required by sanctions regulations.
5. Review existing contracts with Iranian counterparties: analyze compliance and sanctions clauses to determine whether contracts can be terminated or must be suspended.
6. Train your compliance and operations team: ensure that persons managing international payments, export contracts or relationships with Iranian clients are aware of the new obligations.

Non-compliance with these measures can result in administrative and criminal sanctions in Member States, including possible personal liability of directors.

Official source

Consult complete regulation in official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601891