The 2026 Islamabad Memorandum of Understanding (MOU) presents an important opportunity for regional de-escalation, but its legal legitimacy ultimately depends on whether its key provisions comply with established principles of international law. Signed after a period of intense military tensions and regional instability between the United States and Iran, the MOU seeks to establish a framework for peace and future negotiations. Although its primary objective is to reduce tensions, it also addresses several debatable issues, including maritime navigation in the Strait of Hormuz, economic sanctions, and frozen Iranian assets, extending its scope beyond a simple ceasefire.

These issues involve fundamental principles of international law, including the prohibition of the use of force, freedom of navigation, state sovereignty, and economic coercion. This article critically examines the Islamabad MOU through the prism of international law by analysing its key provisions on ceasefire obligations, maritime navigation, sanctions, and frozen sovereign assets to assess whether they are consistent with established principles of international law.

Article 1 of the Islamabad Memorandum of Understanding (MOU) states that there must be an immediate and permanent termination of military actions between the United States, Iran, and their allies. It further requires both parties to respect the independence, borders, and territorial rights of the states affected by the conflict and also not to fight in future. These commitments are aligning with Article 2(4) of the United Nations Charter, which stops states from threatening or using force against the territorial or political independence of another state. The clause also reflects Article 33 of the Charter, which encourages states to resolve disputes  through negotiation and diplomacy peacefully instead of using military force.

From an international law perspective, Article 1 of MOU tries  to restore the basic principles of the post 1945 international order.However, it raises important legal questions regarding its implementation. Challenges relating to attribution and state responsibility re created after the inclusion of “allies” specifically non-state armed groups in the ceasefire framework. International law holds a state responsible for the conduct of a non-state actor only where a sufficient degree of control is established. In the Nicaragua case, the International Court of Justice adopted the restrictive “effective control” test, while the ICTY’s Tadić judgment applied the broader “overall control” standard. Determining the extent of such control remains legally contested. Therefore  the ceasefire framework reinforces the principles of non-use of force and peaceful dispute resolution, but its success ultimately depends on the willingness and ability of both state parties to ensure compliance by affiliated actors operating across multiple fronts.

Articles 4 and 5 of the Islamabad Memorandum of Understanding (MOU) deals with one of the world’s most strategically important maritime corridors which is the Strait of Hormuz. Under these articles, the United States undertakes to remove its naval blockade and to remove its forces from the vicinity of Iran following the final agreement, while Iran commits  ensuring the safe passage of commercial vessels and coordinating the future administration of the Strait with Oman in accordance with the international law applicable. These commitments directly engage the law of the sea, particularly the United Nations Convention on the Law of the Sea (UNCLOS). Articles 38 and 44 recognize the right of transit passage through international straits and doesn’t allow coastal states from hampering such navigation, while Article 26 prohibits charges solely for passage, permitting only reasonable fees for specific maritime services. The Corfu Channel case further established the importance of unobstructed navigation through international straits used for international commerce.Despite these commitments, the legal status and future administration of the Strait of Hormuz continue to remain a source of political and legal disagreement, making its interpretation under international law an ongoing issue of regional and global importance.

From an international law perspective, the MOU attempts to restore the balance between freedom of navigation and coastal state sovereignty. The commitment to lift the  naval blockade by United States also raises legal considerations, as Article 42 of the United Nations Charter allows blockades only when authorized by the Security Council as an enforcement measure under Chapter VII a condition which appears not to be satisfied in this case. Similarly, as Iran possesses sovereign rights over its territorial waters, international law does not allow it to close the Strait of Hormuz or impose transit tolls on international shipping. Therefore, the maritime provisions of the MOU largely reinforce the established principles of international maritime law helping to reduce one of the principal sources of regional instability

Article 7 of the Islamabad Memorandum of Understanding (MOU) asks for the step by step termination of all sanctions imposed on Iran, including United Nations Security Council measures, International Atomic Energy Agency (IAEA) Board of Governors resolutions, and both primary and secondary United States sanctions. From the international law point of view, this article deals with the legality, scope, and implementation of economic sanctions. Under Article 41 of the United Nations Charter, the Security Council may impose non military measures, including economic sanctions and trade restrictions, which are legally binding upon all Member States. In contrast, unilateral sanctions imposed by individual states remain legally controversial. While sanctioning states regard them as a legal exercise of sovereign foreign policy, many states argue that broad unilateral sanctions result to unlawful economic coercion and undermine the principles of sovereign equality and non intervention preserved in Articles 2(1) and 2(7) of the UN Charter.

The MOU further considers the removal of both primary and secondary United States sanctions. While primary sanctions regulate the conduct of domestic persons and entities, secondary sanctions extend their effects extra territoriality by penalising foreign companies engaging with Iran, making them one of the most disputed features of contemporary sanctions regimes. Nevertheless, the implementation of Article 7 presents practical legal challenges. United Nations sanctions require Security Council action, while many United States sanctions are embedded within domestic statutory frameworks and cannot be removed solely through executive commitment. Consequently, although Article 7 reflects a significant commitment towards economic normalization, its legal implementation depends upon both international and domestic legal processes.

Article 11 of the Islamabad Memorandum of Understanding (MOU) asks for the release of Iran’s frozen sovereign funds and assets and requires the United States to issue the  licenses and authorizations which are necessary to facilitate their transfer and use. This article deals with important principles of international law, mainly the principles of sovereign equality and sovereign immunity. Article 2(1) of the United Nations Charter recognises the sovereign equality of all states. In addition, customary international law protects state owned property from unjustified interference by other states through the doctrine of sovereign immunity, a principle which is stated in the United Nations Convention on Jurisdictional Immunities of States and Their Property (2004).

Although states may lawfully freeze foreign sovereign assets through sanctions or domestic legislation, the permanent confiscation or transfer of such assets remains legally controversial. Therefore the MOU seeks to restore Iran’s access to its sovereign assets through a legal framework after negotiations rather than unilateral action. However implementation remains subject to domestic legal procedures, banking regulations, and the cooperation of jurisdictions where the assets are held. Consequently, Article 11 illustrates the continuing tension between geopolitical objectives and established principles of international law governing state property and sovereign rights.

The Islamabad Memorandum of Understanding shows more than a political commitment to end conflicts between the United States and Iran,it also shows that international law continues to play an important role in resolving complex geopolitical disputes. Its provisions dealing the prohibition of force, maritime navigation, economic sanctions, and frozen sovereign assets show that durable peace depends not only on political will but also on following established legal principles. While some articles of the MOU remain challenging to implement  legally and practically, the agreement still shows an effort to resolve longstanding disputes through negotiation rather than military confrontation. Finally, the success of the MOU will depend on the willingness of both parties and the wider international community to uphold their legal commitments and convert the framework into a comprehensive and enforceable peace settlement.