The European Union's efforts to impose economic sanctions on Iran suffered a new setback on Monday when a top court ruled that measures against the Islamic Republic's biggest cargo carrier should be lifted.
The ruling by Europe's second-highest court follows similar decisions in favour of some dozen Iranian companies in the last year, which have raised alarm in Europe and the United States.
Governments in the West have been using economic sanctions such as asset freezes against banks, shipping companies and other firms in an effort to curb Iran's nuclear activities they fear aim at developing weapons.
But such measures are unlikely to find support in the European Union at a large scale, because governments are concerned about punishing companies not involved in atom work.
Mark Dubowitz, executive director of the Foundation for Defense of Democracies think tank, which has pushed for tougher sanctions, said IRISL's activities in Europe may remain constrained even if sanctions were upheld by the highest court.
"In theory, if the appeal is rejected, IRISL could have their cargo fleet now trade in Europe," he said. "In practice, the fear of U.S. sanctions should keep all European businesses that are not completely isolated from the U.S. market from interacting with the Iranian fleet."
IRISL was hit with financial sanctions by the U.S. Treasury in 2008 for what it said was its role in aiding Iran's ballistic missile development programme, and any foreign companies doing businesses with it may face punitive measures under U.S. law.