Codifying Coercion: Iran’s “New Legal Regime” and the Law of International Straits

The Legal Novelty of the Proposal 

International commentary on the Strait of Hormuz crisis has focused, understandably, on the lawfulness of Iran’s closure. The more legally significant development has received comparatively little analysis: Iran’s stated intention to revise the legal order governing it on a continuing basis. On April 5, Deputy Presidential Chief of Staff Mehdi Tabatabaei stated that “The Strait of Hormuz will be reopened only when part of the transit revenues is used to compensate for all damages caused by the imposed war.”

Iran’s National Security and Foreign Policy Committee had already approved the “Strait of Hormuz Management Plan” on March 30, a bill that codifies what the IRGC Navy has been implementing since mid-March: charging vessels approximately $2 million per transit through a northern corridor, collecting fees in yuan and cryptocurrency, and barring ships linked to the United States or Israel at any price. Iran and Oman are simultaneously co-drafting a bilateral monitoring protocol that would give both states joint administrative control over every vessel entering or leaving the Persian Gulf.

Rather than a routine exercise of coastal-state regulatory authority, this can best be considered an attempt to convert a natural international strait into a managed and revenue-generating gateway administered by the bordering states on their own political terms. 

The Natural Strait / Artificial Waterway Distinction

Iran’s implicit legal theory appears to rest on an analogy to the Suez and Panama Canals, both of which charge transit fees. The analogy fails at the threshold. Artificial canals are engineered waterways constructed, maintained, and administered through sovereign territory, and their operation is governed by specific treaty regimes tailored to those waterways. The Panama and Suez Canal regimes are governed by their own treaty frameworks, not by the straits provisions of the law of the sea.

The Strait of Hormuz is different in kind: it is a natural geographic feature, created without Iranian investment. The navigational right at stake is a passage regime arising from the strait’s international character and its function in connecting one part of the high seas or exclusive economic zone to another. The ICJ recognized an antecedent version of this principle in Corfu Channel, holding that states enjoy a right of passage through international straits in time of peace without prior authorization. The transit passage regime codified in UNCLOS Articles 37 through 44 is the later elaboration of that principle. A fee regime premised on bordering-state discretion to screen, price, and selectively deny passage would transform a legal right of passage into a purchased license.

The Fee Prohibition and Its Doctrinal Basis

The prohibition on charges for passage through territorial waters appears in UNCLOS Article 26: “No charge may be levied upon foreign ships by reason only of their passage through the territorial sea. Charges may be levied upon a foreign ship passing through the territorial sea as payment only for specific services rendered to the ship. These charges shall be levied without discrimination.”

Article 26 appears in Part II, which governs innocent passage in the territorial sea, not in Part III on transit passage. Its application to transit passage straits is therefore an inference rather than explicit treaty text. Transit passage is designed to secure a more robust navigational freedom than innocent passage, and Article 44’s prohibition on suspension would be substantially hollowed out if bordering states could achieve the same result through economically coercive tolling.

That said, Iran’s fee regime is difficult to defend even on the logic it invokes. Iran has characterized its charges as payment for services such as naval escort, corridor clearance, and administrative screening. But Article 26(2)’s exception for “specific services rendered” is most naturally read to cover identifiable operational services actually rendered to a vessel, rather than compulsory protection from a danger manufactured by the charging state itself. A state that creates the navigational peril and then monetizes safe passage through it is turning control over access into a revenue mechanism. Article 300’s prohibition on abuse of right captures the logic of that objection at the treaty level.

The Bilateral Protocol Cannot Displace Third-State Passage Rights

The Iran-Oman bilateral monitoring protocol under negotiation is the more structurally significant element of Iran’s proposal. Because the territorial seas of Iran and Oman together span the full width of the strait, there is no high seas corridor through which ships could bypass the two bordering states. A bilateral arrangement granting Iran and Oman joint administrative control over all entry and exit from the Persian Gulf would therefore function, in practice, as a permission-based regime for passage.

Bordering states may coordinate safety measures, navigation schemes, and traffic management consistent with the law of the sea. What they cannot lawfully do is use bilateral coordination to extinguish, suspend, or convert third-state transit rights into a matter of discretionary approval. The right of transit passage through an international strait is a legal regime that operates vis-à-vis the broader international community, rather than a bilateral concession exchanged between the two littoral states. That is the deeper implication of Corfu Channel. Instead of the Court denying Albania’s sovereignty over its territorial sea, it held that sovereignty over an international strait does not include the power to make passage contingent on prior authorization.

An Iran-Oman protocol requiring vessels to obtain approval from both states before entering the Gulf would therefore recast the juridical basis of passage itself. Oman’s own position is legally awkward here. As an UNCLOS party, Oman is bound by Article 44’s command that there shall be no suspension of transit passage. Participation in a joint management structure that functionally suspends or conditions passage for political reasons would be hard to reconcile with that obligation.

The Historical Parallel

One useful historical parallel is the Danish Sound Dues, levied on vessels transiting the Øresund until 1857. For centuries, Denmark charged for passage through what would now be understood as an international strait, and the dues were ultimately abolished only through collective payment by maritime powers.

None of those conditions applies to Hormuz today. Iran’s proposed tolls postdate the legal framework they contradict. They have been met with immediate challenge rather than long acquiescence. And they are not grounded in any treaty or long-standing practice specific to Hormuz itself. The Sound Dues illustrate that strait tolls once existed, but do not establish that a state may now invent one in the face of the modern law of the sea.

The Precedent Problem

Iran’s Deputy Foreign Minister for Legal and International Affairs, Kazem Gharibabadi, stated publicly in late March that “we are now in a state of war, and wartime conditions cannot be governed by peacetime rules.” If that framing were accepted, the consequences would extend well beyond Hormuz. It would imply that any bordering state engaged in armed conflict could suspend or reconfigure the legal regime of an international strait by unilateral fiat.

The Strait of Malacca, Bab el-Mandeb, the Danish Straits, and Gibraltar are all strategically significant waterways governed by the same underlying straits framework. A precedent that permits a belligerent littoral state to impose tolls, discriminatory access conditions, or bilateral clearance schemes during armed conflict would alter the legal architecture on which maritime commerce, naval mobility, and third-state reliance depend.

The Customary Law Complication

It would be incomplete not to acknowledge the customary-law complication. Iran’s formal position is that when it signed UNCLOS in 1982, it treated the transit passage regime as treaty-specific rather than as a codification of custom, and it has maintained a restrictive approach through subsequent legislation and practice. That gives Iran a persistent-objector argument against the customary status of transit passage, though the success of that argument remains contested and depends on unresolved questions about crystallization and objection during the formative period of the norm.

Even if one assumed, for the sake of argument, that Iran could resist the customary transit-passage rule in that way, the conclusion would still not be what Iran needs it to be. Exemption from a particular obligation is not the same as affirmative authority to construct a new legal regime for third states. A state does not acquire the right to charge discriminatory transit fees, convert passage into a licensed service, or jointly administer an international chokepoint merely because it disputes one source of the obligation constraining it. 

The US Counter-Blockade

Trump’s April 13 announcement of a naval blockade warrants a brief note, not least because CENTCOM’s clarification that the blockade targets Iranian ports rather than the strait itself matters legally. A belligerent blockade of an enemy’s ports is a recognized method of naval warfare under San Remo Rules 93–104, provided it meets the declaration, effectiveness, impartiality, and neutral-access requirements; directed at Iranian ports rather than a neutral international waterway, it has a structurally sounder foundation than Iran’s own closure. The more problematic element is Trump’s separate instruction to interdict in international waters any vessel that has paid Iran’s toll: neutral merchant vessels enjoy protection under San Remo Rule 67 that the mere fact of having paid a fee does not displace. 

What the US blockade illustrates most clearly, however, is the structural asymmetry that lies at the heart of this piece’s argument. The United States can act as a belligerent with established naval superiority and a recognized, if contested, legal basis for port blockade, while India, South Korea, Japan, and the EU member states most concretely injured by Iran’s toll regime cannot. The US position is not without its own legal difficulties; the port blockade, mine-clearing operations, and interdiction order each raise contested questions this piece leaves aside.

Conclusion

Iran’s proposed “new legal regime” is an attempt to translate coercive control over a strait into permanent legal entitlement. The proposal’s legal weakness is structural: the distinction between natural straits and artificial canals undermines the fee analogy at the threshold. A bilateral Iran-Oman protocol cannot lawfully convert third-state passage rights into a permission-based system, and the fee structure itself is best understood as an effort to normalize monetized control over access. Iran’s project is an attempted revision of the legal nature of the strait itself, and its survival without formal legal challenge would be the most damaging precedent the law of the sea has faced since the extension of the territorial sea to twelve nautical miles