The push by Iran to codify control over the world’s most vital maritime chokepoint is not a sudden burst of legislative zeal. It is a calculated attempt to formalize a permanent geopolitical tax on global trade. On July 13, 2026, as Islamic Revolutionary Guard Corps (IRGC) forces clashed with U.S. Navy units and downed American surveillance drones, Ebrahim Azizi, the chairman of Iran’s parliamentary National Security and Foreign Policy Commission, formally introduced the "Strategic Action for the Security and Sustainable Progress of the Strait of Hormuz and the Persian Gulf" bill.
This is more than a rhetorical response to U.S. military presence. It represents an effort to fundamentally alter international maritime law by replacing the globally accepted principle of free transit passage with a restrictive, fee-based regulatory regime run directly by Tehran.
The Legislative Weapon
By choosing to introduce this bill immediately following the downing of U.S. drones, the Iranian parliament, or Majles, signaled that its legislative agenda is now fully synchronized with the IRGC’s kinetic operations in the Gulf. Ebrahim Azizi’s public statement that this draft is merely a "first step" with "subsequent measures forthcoming" underscores a broader strategy. Tehran is moving away from ad-hoc harassment of merchant vessels toward a structured, legalized framework designed to force international shipping companies to acknowledge Iranian jurisdiction.
The core of the proposed legislation centers on the newly conceived Persian Gulf Strait Authority. According to draft details circulated by state media, this authority would assume absolute administrative control over the strait. It would require all transiting vessels to submit detailed cargo manifests, destination data, and crew lists to Iranian officials prior to entering the waterway.
More alarmingly for global shipping firms, the bill proposes a mandatory, rial-based toll system. Under this plan, any commercial vessel passing through the strait would be forced to pay a transit fee, supposedly to cover the costs of "security arrangements, environmental protection, and maritime safety" provided by Iran. For decades, the international community has operated under the assumption that the Strait of Hormuz is an open international waterway. Iran is attempting to turn it into a private toll road.
Why the Islamabad MoU Dissolved
To understand why this bill is landing now, one must look at the wreckage of the Islamabad Memorandum of Understanding (MoU). Signed in June 2026, the MoU was supposed to establish a durable framework to wind down the intense regional conflict that began in late February. Under the initial terms of the ceasefire, Iran agreed to temporarily open the Strait of Hormuz to civilian shipping in exchange for a partial easing of maritime restrictions and a pause in retaliatory U.S. airstrikes.
But the peace was structurally flawed from the beginning.
THE COLLAPSE OF THE ISLAMABAD MoU
[ Tehran's Position ] [ Washington's Position ]
• Demanded permanent tolling • Demanded unconditional free
rights under regional authority. transit for all nations.
│ │
└─────────────────┬──────────────────┘
▼
[ Framework Dissolves ]
• Iran closes the Strait (July 12)
• U.S. launches fresh strikes (July 13)
• Majles introduces "Strategic Action" bill
A deep ideological split within Iran’s political elite hastened the deal's demise. While Mohammad Bagher Ghalibaf, the parliament speaker and chief negotiator, attempted to leverage the MoU to secure broader economic relief, hardline lawmakers viewed any compromise on maritime sovereignty as a betrayal.
These hardliners, backed by senior IRGC commanders, argued that opening the strait without securing a permanent, legally binding mechanism for Iranian oversight was a strategic error. When technical negotiations over the administration of the strait stalled, the agreement fell apart. Iran officially declared the strait closed on July 12, prompting immediate U.S. military action and a resumption of hostilities.
The Clash of Two Tolls
The geopolitical drama has escalated into a direct economic confrontation between Washington and Tehran. Following the collapse of the Islamabad agreement, President Donald Trump announced that the United States would take over security operations in the strait, reimpose a complete blockade on Iranian ports, and levy a counter-toll.
The U.S. proposal involves a 20 percent fee on all cargo transiting the waterway, with the proceeds ostensibly going toward funding the multi-nation naval coalition tasked with keeping the channel open.
This has left global shipping alliances in an impossible position.
If they comply with the Iranian draft law, they violate U.S. sanctions and face astronomical fines, asset seizures, and exclusion from Western financial systems. If they comply with the U.S. mandate and ignore Iranian demands, they risk having their vessels targeted by IRGC fast-attack craft, sea mines, or drone strikes.
The economic fallout is already visible. Insurance underwriters in London have classified the entire Persian Gulf as a high-risk zone, sending hull and machinery premiums to levels not seen since the Tanker War of the 1980s. Shipping companies are faced with a stark choice: pay the ruinous insurance surcharges, or route their vessels around the Cape of Good Hope, adding weeks to transit times and billions of dollars in fuel costs to global supply chains.
The Legal Fiction of Iranian Sovereignty
The legal argument underpinning Iran’s new bill relies on a highly selective interpretation of international maritime law. The Strait of Hormuz is narrow, measuring only 21 miles wide at its narrowest point. Because the territorial sea claims of both Iran and Oman extend 12 miles from their respective coastlines, the entirety of the strait lies within the territorial waters of these two coastal states.
Under the 1982 United Nations Convention on the Law of the Sea (UNCLOS), straits used for international navigation are governed by the regime of transit passage. This doctrine allows all ships and aircraft, including military vessels, the right of unimpeded, continuous, and expeditious transit.
Tehran, however, points to a crucial detail: while Iran signed UNCLOS in 1982, it never ratified the treaty.
Consequently, Iranian legal scholars argue that Tehran is bound only by customary international law and the older 1958 Geneva Convention on the Territorial Sea and the Contiguous Zone. Under those older frameworks, the applicable standard is innocent passage, which allows coastal states to temporarily suspend transit if they deem a foreign vessel's passage prejudicial to their peace, good order, or security.
By pushing the "Strategic Action" bill, the Iranian parliament is trying to establish a domestic legal precedent that overrides international treaties. It is an attempt to codify the argument that because the shipping lanes lie within Iranian territorial waters, Tehran has the sovereign right to regulate, tax, and suspend traffic at will.
The United States, which also has not ratified UNCLOS but recognizes its provisions as customary international law, rejects this position entirely. U.S. Central Command (CENTCOM) maintains that the Strait of Hormuz is an international waterway, and that no single country has the right to unilaterally alter its legal status or impose taxes on sovereign vessels.
The Reality on the Water
While politicians in Tehran draft bills and leaders in Washington threaten blockades, the tactical reality on the water is increasingly chaotic. The IRGC Navy has already begun trying to enforce the spirit of the proposed law, demanding that commercial ships identify themselves and seek permission before passing through the strait.
| Aspect | Iranian Proposed Regime | U.S. / International Position |
|---|---|---|
| Legal Status | Sovereign Territorial Waters (Innocent Passage) | International Strait (Transit Passage) |
| Regulatory Body | Persian Gulf Strait Authority | Joint Allied Naval Patrols / Coalition |
| Financial Cost | Rial-Based Transit Tolls | Freedom of Navigation (No Fees) |
| Enforcement Method | IRGC Interdictions and Drone Strikes | Escort Fleets and Preemptive Strikes |
Despite CENTCOM’s assertions that traffic is flowing normally, shipping data paints a different picture. The volume of tankers transiting the strait has slowed to a crawl, with many operators ordering their vessels to hold in safe anchorages outside the Gulf of Oman.
The danger is not theoretical. Several merchant vessels have already been struck by low-cost loitering munitions, and others have been boarded by armed IRGC personnel after refusing to comply with radio instructions.
By turning the management of the strait into a legislative issue, Iran has created a permanent source of leverage. Even if the current military escalation subsides, the "Strategic Action" bill will remain on the books in Tehran, ready to be advanced, paused, or modified whenever the regime requires a diplomatic bargaining chip.
The international community is no longer just dealing with the threat of Iranian naval mines; it is dealing with a comprehensive, institutionalized strategy designed to hold the global economy hostage, one law at a time. The era of unhindered, cost-free passage through the Strait of Hormuz may be over, regardless of who wins the immediate military battle.
