Business Analysis of the Government of the Islamic Republic of Iran Under the Shadow of Monopoly Blackmail by Friendly Countries

The current international trade-law crisis involving the Islamic Republic of Iran and other countries in the region is not a single legal dispute. Rather, it is a broader conflict involving international sanctions, restrictions on trade and finance, maritime security, energy exports, border crossings, and competing interpretations of international law.

Iran occupies an important position in regional trade because of its geographical location between Central Asia, the Caucasus, the Persian Gulf, and the Middle East. Iran conducts substantial trade with neighboring countries such as Iraq, Türkiye, the United Arab Emirates, Pakistan, Oman, and Afghanistan. Because Iran faces extensive restrictions on access to Western financial and shipping systems, neighboring countries have become particularly important channels for Iranian imports, exports, transportation, and financial transactions.

One of the most significant issues concerns the Strait of Hormuz. The Strait is a major international maritime route connecting the Persian Gulf with the Gulf of Oman and the wider Indian Ocean. Restrictions on shipping through the Strait raise questions concerning freedom of navigation, the law of international straits, maritime security, and the rights and obligations of neutral commercial vessels. The disruption of shipping can also have consequences for international energy markets and global trade.

Another major issue is the effect of sanctions on Iran's commercial relations with neighboring countries. United States and European sanctions have restricted many transactions involving Iranian banks, companies, energy exports, shipping, and other economic activities. Although these sanctions are generally based on the domestic laws of the countries imposing them, they have significant international consequences because companies and financial institutions in neighboring countries may face penalties or loss of access to international financial systems if they conduct certain transactions with Iran.

This has created a difficult position for countries such as Iraq, Türkiye, and the United Arab Emirates. These states have important economic relationships with Iran, but their companies and financial institutions may also have to consider sanctions imposed by the United States or other governments. Consequently, trade between Iran and its neighbors can continue while simultaneously being affected by restrictions, licensing requirements, banking difficulties, and concerns about secondary sanctions.

International trade law is also relevant. Iran is not currently a member of the World Trade Organization, so it cannot use the WTO dispute-settlement system in the same way as WTO members. Nevertheless, WTO principles remain important for understanding regional trade disputes involving countries that are WTO members. Issues such as tariffs, import restrictions, discrimination between trading partners, transit restrictions, and national-security exceptions can become relevant when states restrict trade for political or security reasons.

The region has previously experienced trade disputes in which governments relied on national-security arguments to justify restrictions. The dispute between Qatar and the United Arab Emirates, for example, involved restrictions on trade in goods and services and arguments concerning national security. Although that dispute is separate from Iran's current situation, it illustrates the broader difficulty of applying international trade law when economic measures are connected to diplomatic or security conflicts.

The situation is further complicated by international law relating to the United Nations. Disagreements concerning Iran's nuclear program have resulted in international sanctions and continuing disputes between Iran and several Western governments. Iran has challenged the legitimacy of some sanctions, while the governments imposing them have argued that they are necessary for international security and compliance with nuclear-related obligations.

The crisis therefore involves several overlapping areas of international law. These include the law of the sea, international trade law, United Nations law, sanctions law, international investment law, and the rules governing commercial contracts and shipping. During periods of armed conflict or serious maritime disruption, international humanitarian law can also become relevant.

Overall, the central legal problem is the tension between Iran's participation in international and regional commerce and the security, sanctions, and trade restrictions imposed by other states. Iran's neighboring countries must balance their economic relationships with Iran against their own international obligations, domestic laws, and relationships with major economic powers.

The result is a complex regional trade environment in which ordinary commercial activities—such as transporting goods, purchasing energy, making bank payments, operating ships, and crossing borders—can have significant international-law consequences.

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Written by Prof. Dr. Parham Nami Fard Tehrani