Europe and the Challenge of Dual-Use Technology Transfer to Iran

Sanctions loophole: Western components have been found in Iranian drones used by Russia in its war against Ukraine. Image: Corona Borealis / Adobe Stock

Russia’s use of Iranian drones in its war on Ukraine highlights the need for European countries to take stronger action to prevent the transfer of dual-use technologies to Iran.

Tackling the transfer of dual-use technologies to Iran has been on Europe’s radar since the administration of Mahmoud Ahmadinejad employed such technologies to develop Iran’s nuclear programme in the 2000s. In 2023, this issue is again at the top of the European agenda, but this time it encompasses Iran’s use of European, US and Japanese dual-use technologies for the development of its drone programme. Given that Iran has been delivering drones to Russia for its war against Ukraine – a country that is also a candidate to become a member of the EU – this issue is now a direct threat to European security.

According to Ukrainian intelligence reports obtained by the Wall Street Journal from the Kiev-based Independent Anti-Corruption Commission, three-quarters of the component parts of Iranian drones purchased by Russia were made in Western countries and, especially, in the US.

Most of these items were transferred to Iran after the return of US sanctions in 2018, especially during 2020 and 2021.

How is it possible to explain this egregious failure to enforce stringent existing pieces of legislation and sanctions, allowing the Iranian regime not only to build an ambitious drone programme but also to disseminate its drones, first in the Middle East (Iraq, Syria and Yemen) and now on European soil?

Ukrainian intelligence reports about European components are a reminder of the need for European countries to stop being naïve about their trade links to Iran

European, US and Japanese authorities are blaming intermediaries for the illegal transfer of dual-use technologies to Iran despite the existence of a legal regime preventing their national companies from doing so. The claim is that private Chinese rogue actors could be using their economic relations with Iran as a cover to develop illicit activities in the dual-use technologies sphere. According to the Japanese Ministry of Trade, in 2021 a Japanese firm was sanctioned for exporting servomotors to China that were found in one of the parts of an Iranian drone. Other intermediaries that have been blamed by Western countries include the UAE and even NATO member Turkey.

Dual-Use Technology and Drones

The main challenge for European authorities in controlling the transfer of European-made dual-use technologies to Iran is that most of them – even the pieces that end up in drones – are available online. The components can thus easily be delivered to intermediary countries and then shipped to Iran. These online transactions make the procurement channel difficult to target. It is based on the work of private actors, and the networks providing dual-use technologies to Iran are informal. The existence of these informal networks in countries neighbouring Iran – including Turkey, Iraq, Russia and the UAE – is a major advantage for Tehran and complicates the investigative picture for Western authorities trying to reveal the identity of companies or individuals involved in the smuggling.

Ukrainian intelligence reports about European components are nevertheless a reminder of the need for European countries to stop being naïve about their trade links to Iran. Even if they cannot monitor and control the informal networks in the region, they should be aware of the risks posed to European security by the use of upgraded Iranian military equipment in Ukraine. Most of the informal smuggling networks that Iran is using in the drones’ production line were boosted by the regime around 2007 in order to overcome European sanctions. It is legitimate to wonder whether European authorities were aware of these networks in the past, but decided to refrain from cracking down on them out of leniency towards the regime. As the behaviour of the Iranian regime now clearly shows the naïveté of this approach, it is time for European authorities to shut down all possible loopholes in the implementation of their own sanctions against Iran with a new protocol specifically dedicated to dual-use technologies. In drafting this new protocol, Iran’s Mohajer-6 drones provide a useful case study on the country’s decades-long ability to bypass not only Western sanctions but also UN regulations and arms embargoes.

Europe does not lack a good understanding of Iran, but rather there is a deficit of political will to implement sanctions on the transfer of dual-use technologies

A thorough European investigation should now be conducted, including the compiling of a full list of components that have potential military applications in the field of drone and missile production. In addition, European authorities should demand full oversight capabilities on the commercialisation of such components, not only in Iran but also in neighbouring countries. The role of intermediaries is in fact a key factor in Iran’s ability to import these components. A thorough application of sanctions should go hand-in-hand with constructive cooperation with intermediary and neighbouring countries, who are often also not fully aware of private actors’ transactions and transhipments. There is, indeed, a clear issue of country versus company responsibility. If European capitals aim to sanction the procurement channels that Iran is using to outfit its drones, they should raise the cost of transferring dual-use technologies to Iran, including by pushing European companies to enhance their efforts to monitor the delivery chain of their products as close as possible to the end user. European states do not lack a good understanding of Iran as such, but rather there is a deficit of political will to implement sanctions on the transfer of dual-use technologies to Iran in the context of the war in Ukraine. The other hurdle for a successful Iran policy is to move away from the current focus on announcing a new sanctions regime in the context of the Iranian uprising. Indeed, this is not sufficient if the existing sanctions regimes are not implemented well enough.

Finally, Europeans should also raise this issue at the level of international political fora. Many countries, including some that do not see eye-to-eye with Europe on Russia’s invasion of Ukraine in the Middle East and North Africa and even on the African continent – given the alleged transfer of Iranian drones to the Polisario Front – have long complained about the severity of the threat posed by Iranian drones. European capitals should now reach out to these countries to form a coalition to push for international measures that will further isolate the Iranian regime, weakening its political resolve as well as its material ability to produce and export deadly devices with total impunity.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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Mohammed Alsulami

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