Iran’s Foreign Minister Abbas Araghchi claims the E3 has no legal basis to trigger snapback. Reuters
Iran’s Foreign Minister Abbas Araghchi claims the E3 has no legal basis to trigger snapback. Reuters
Iran’s Foreign Minister Abbas Araghchi claims the E3 has no legal basis to trigger snapback. Reuters
Iran’s Foreign Minister Abbas Araghchi claims the E3 has no legal basis to trigger snapback. Reuters

France, UK and Germany ready to reimpose sanctions on Iran


Sunniva Rose
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France, Germany and Britain have told the UN they are ready to reinstate sanctions on Iran if it does not return to negotiations with the international community over its nuclear programme.

The foreign ministers of the so-called E3 group wrote to the UN on Tuesday to raise the possibility of “snapback” sanctions unless Iran takes action, said the letter, which was shared on X by French Foreign Minister Jean-Noel Barrot.

“We have made it clear that if Iran is not willing to reach a diplomatic solution before the end of August 2025, or does not seize the opportunity of an extension, E3 are prepared to trigger the snapback mechanism,” the ministers wrote.

UK Foreign Secretary David Lammy said Iran's failure to produce credible assurances regarding the nature of its nuclear programme meant it was a threat to international peace and security.

He said: "We have offered Iran a limited extension to UN sanctions relief subject to clear conditions being met, including Iran resuming negotiations with the US and ensuring full cooperation with the IAEA in line with the Non-Proliferation Treaty.

“We have set out our position clearly to members of the UN Security Council, outlining our diplomatic efforts and further measures, should Iran reject our offer.

“Iran still has the choice to resume diplomacy, and we urge Iran to do so. The ball is now in Iran’s court.”

The E3 considers that Iran's nuclear programme continues to pose a threat to world security despite US strikes in June that ended 12 days of an Iran-Israel air war. The International Atomic Energy Agency (IAEA) can no longer conduct on-site inspections since Iran stopped co-operating with them after the conflict.

The letter complained that Iran was failing to carry out its commitments under a nuclear deal agreed to in 2015. After striking Iran on June 22, the White House claimed it had obliterated Iran's nuclear programme, but those claims have been contradicted by intelligence reports which say it has only been set back by months.

No Iranian response

The E3 offered a six-month snapback extension after its latest meeting with Iran in Istanbul on July 22, to which Iran has yet to respond. Without an answer, the E3 has said it will trigger the snapback by the end of August to meet an October deadline.

“If Iran continues to violate its international obligations, France and its German and British partners will reinstate at the end of August the global embargoes on arms, nuclear equipment and banking restrictions lifted 10 years ago,” Mr Barrot said.

An extension would provide “additional time for negotiations with the aim of concluding a new agreement, while maintaining the possibility of resorting to the re-establishment of relevant sanctions against Iran to prevent nuclear proliferation,” the letter said.

There is a perception that Iran may be ignoring the E3 proposal for an extension because it believes that the impact of a decision to reimpose sanctions would be minimal. Iran is already under a US embargo that applies around the globe.

The Isfahan nuclear enrichment plant in central Iran after being hits by US bombs. Photo: Planet Labs PBC / AFP
The Isfahan nuclear enrichment plant in central Iran after being hits by US bombs. Photo: Planet Labs PBC / AFP

The E3 rejects claims made by Iran’s Foreign Minister Abbas Araghchi that it has no legal foundation to trigger snapback. The E3, China and Russia are the remaining parties to a 2015 nuclear deal reached with Iran – from which the US withdrew in 2018 – that lifted sanctions on the Middle Eastern country in return for restrictions on its nuclear programme.

Years of non-compliance

E3 ministers pointed at the fact that Europe, unlike the US, has never attacked Iran militarily. They described Iran's decision to stop honouring its nuclear commitments in 2019, one year after a US withdrawal, as a “regrettable decision”. Previous diplomatic efforts to address Iran's non-compliance failed.

“Since 2019, Iran has wilfully and publicly departed from its nuclear commitments,” the letter said. “Iran's non-performance is as blatant as it is concerning. We now face a situation in which, in addition to reneging on its commitments, Iran has ceased co-operation with the IAEA,” it added.

As examples of Iran's violations, the E3 pointed to uranium stockpiles representing more than 40 times the limit, including 400kg of uranium enriched at 60 per cent. The deal set a limit of 3.67 per cent enrichment. France has recently joined the US in demanding zero enrichment, even for civilian purposes.

The letter also highlighted that Iran has produced enriched material at sites prohibited under the agreement, such as Fordow. Iran also announced a new enrichment site in June and has produced, installed and operated thousands of new advanced centrifuges.

“This all constitutes a clear legal basis for the E3 should we decide to notify the UNSC that Iran is in significant non-performance of its commitments under the agreement and therefore to trigger the snapback mechanism,” the letter said.

Iranian legislator Manouchehr Mottaki, who served as foreign minister from 2005 to 2010, said Iran's parliament “has its finger on the trigger to withdraw from the nuclear Non-Proliferation Treaty” if international sanctions were reimposed after any E3 invocation of the snapback mechanism.

Mr Mottaki told Iran's semi-official Defa Press that parliament would approve a bill to withdraw from the 2015 nuclear deal within 24 hours if the E3 invoked the snapback mechanism.

During its 12-day war with Israel, Tehran said its legislators were preparing a bill that could push it towards exiting the treaty, ratified by Iran in 1970. The accord guarantees countries the right to pursue civilian nuclear power in return for requiring them to forgo atomic weapons and co-operate with the IAEA.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: August 13, 2025, 5:56 PM