The Iranian judiciary operates under the direct authority of the supreme leader and carries an extremely high risk of corruption and political interference. The head of the judiciary is appointed by the supreme leader for renewable five-year terms. While courts retain some internal autonomy, the system is routinely used to silence regime critics, opposition figures, and journalists. In non-political cases there is greater procedural regularity, but corruption and political connections frequently influence proceedings.

Anti-corruption prosecutions are typically selective — deployed against factional rivals rather than to achieve genuine accountability. IRGC-affiliated entities, religious foundations (bonyads), and loyalist clerics remain effectively shielded. Dual nationals and those with international connections continue to face arbitrary detention and denial of due process, and the justice system has been used as leverage in prisoner exchanges. Iran continues to carry out a high number of executions, with political prisoners and ethnic minorities disproportionately represented.

Iran has acceded to the 1958 New York Convention on the recognition of foreign arbitral awards but is not a member of the International Centre for the Settlement of Investment Disputes (ICSID). The efficiency of the legal framework for dispute resolution and for challenging government regulations is rated very low by the business community.

Source: Freedom House — Freedom in the World 2026 (Iran)

Source: Bertelsmann Stiftung — BTI 2026 Iran Country Report

Iran's police and security apparatus — including the national Law Enforcement Force, the IRGC, the Basij militia, and the intelligence services — carries an extremely high risk of corruption. These forces operate with substantial impunity, are loyal primarily to the supreme leader, and have been documented engaging in arbitrary detention, torture, and extrajudicial violence to suppress dissent. Oversight is largely nominal; prosecutions of security officials for abuse or corruption are effectively non-existent.

The morality police have continued to enforce mandatory hijab compliance, including through surveillance technology and physical force, particularly since the 2022 death in custody of Mahsa (Jina) Amini and the protests that followed. International monitors have also documented the recruitment and use of minors by the IRGC and Basij. The pace of executions rose sharply in 2025, reaching the highest annual level in well over a decade according to human-rights monitors.

Source: US Department of State — 2025 Trafficking in Persons Report (Iran)

Source: Freedom House — Freedom on the Net 2025 (Iran)

Public services carry an extremely high risk of corruption. Religious affiliation, ideological loyalty, and political patronage — rather than merit — continue to dominate hiring across the public sector. Officials commonly expect irregular payments for routine services, and systemic mismanagement limits the quality and reach of state services.

State institutions suffer from endemic inefficiency, worsened by a deep economic crisis. Severe energy shortages caused widespread blackouts during winter 2024–25, compounding problems with water supply, air quality, and waste management. Government regulations are widely perceived as burdensome and opaque, and digitalization of public services remains limited.

Source: Bertelsmann Stiftung — BTI 2026 Iran Country Report

Land administration carries very high corruption risk. Routine urban property transactions broadly follow legal procedures, but the process becomes opaque and vulnerable to corruption for large properties, agricultural land, and commercially valuable assets. Bribery to obtain construction permits is common, and mid-sized industrial facilities frequently rely on connections to secure approvals and financing.

Senior municipal officials, council members, members of parliament, and police officers have been implicated in schemes involving the mishandling of public land. Water mismanagement — including IRGC-linked dam construction that has prioritised political and commercial interests — has accelerated land subsidence and diverted water resources toward politically favoured provinces. Land subsidence is an acute and worsening risk in Tehran and other urban centres, linked to unchecked groundwater extraction.

Source: Carnegie Endowment — Iran's Water Crisis Is a Warning (Nov 2025)

Source: Bertelsmann Stiftung — BTI 2026 Iran Country Report

Tax administration carries a very high corruption risk, with irregular payments common in dealings with tax officials. The system is structurally skewed by oil dependence and by large exemptions: a substantial share of the economy — including IRGC-linked bodies and the bonyads (religious foundations) — operates with limited fiscal accountability, creating a two-tier system that favors the politically connected. Tax evasion by state-linked entities is widespread and structural.

The complexity and opacity of tax regulations, combined with pervasive corruption, create significant compliance burdens for private firms. Iran is subject to comprehensive US sanctions, with EU and UK measures also in force. The US reimposition of a 'maximum pressure' approach in 2025 further complicated legitimate financial and fiscal transactions. Companies dealing with Iran or Iran-linked counterparties face substantial exposure to US, EU, and UK measures, including secondary sanctions.

Source: US Department of State — Iran Sanctions

Source: US Department of the Treasury — OFAC Iran Sanctions

Customs administration carries an extremely high corruption risk. Border administration lacks transparency, procedures are perceived as burdensome, and irregular payments related to imports and exports occur frequently. Smuggling of consumer goods, pharmaceuticals, narcotics, and weapons through official channels has been extensively documented, and the underground economy has expanded under sanctions.

The IRGC's control over ports, airports, and border crossings gives it de facto authority over a significant share of customs operations, creating structural incentives for smuggling and document falsification. US Treasury and FinCEN have documented sanctions-evasion techniques in Iranian oil trade, including relabelling Iranian crude and concealing origin through ship-to-ship transfers in international waters.

Source: FinCEN — advisories and Iran-related guidance

Source: US Department of the Treasury — OFAC Iran Sanctions

Public procurement carries an extremely high risk of corruption. Business executives consistently report that bribery is widespread in the awarding of contracts and licences, and that favouritism is routinely shown to well-connected firms. The IRGC in particular enjoys access to lucrative government contracts not subject to competitive tender, much of it channelled through front companies controlled by IRGC-affiliated individuals rather than formally owned by the organisation.

Diversion of public funds and embezzlement are common, and anti-corruption prosecutions have historically targeted political opponents while shielding IRGC-connected entities. Companies operating in or exporting to Iran face significant sanctions-compliance risk. A widely cited example is the case of a major Chinese telecommunications firm that illicitly exported US-origin equipment to Iran via a cover scheme, resulting in a settlement of roughly USD 892 million — at the time the largest penalty of its kind. Firms bidding on Iranian tenders should conduct rigorous sanctions and due-diligence screening.

Source: Bertelsmann Stiftung — BTI 2026 Iran Country Report

Source: US Department of Commerce — Bureau of Industry and Security (export enforcement)

Corruption risks in the natural-resources sector are extremely high. Iran holds some of the world's largest oil and gas reserves. The sector is controlled by the state, principally through the National Iranian Oil Company (NIOC), and by IRGC-affiliated networks. Reporting practices are insufficiently transparent and sector governance is rated as deeply deficient by international benchmarks.

Under sanctions, Iran has continued substantial crude exports — overwhelmingly to China — through shadow-fleet vessels, document falsification, ship-to-ship transfers, and front companies in several jurisdictions. US Treasury reporting indicates the IRGC-Quds Force (designated a Foreign Terrorist Organization by the US) uses proceeds to fund weapons programs and regional proxies. Iran's mining sector, with significant copper, iron-ore, zinc, and coal reserves, suffers from similar governance deficits. Environmental activists who raise concerns about resource mismanagement face arrest and imprisonment.

Source: US Department of the Treasury — OFAC Iran Sanctions

Source: Carnegie Endowment — Iran's Water Crisis Is a Warning (Nov 2025)

Iranian law provides various penalties for corruption — including, for the most serious offences classed as 'corruption on earth' (mofsed fil-arz), the death penalty — but enforcement is inconsistent and cases involving senior officials or IRGC-affiliated entities largely go unprosecuted. Iran's anti-corruption framework is diffuse, spread across multiple statutes, including the Islamic Penal Code, the rules of procedure for public and revolutionary courts in criminal matters, and the Act on Aggravating the Punishment for Perpetrators of Bribery, Embezzlement and Fraud, supplemented by various by-laws and directives.

These provisions cover active and passive bribery, trading in influence, money laundering, embezzlement, and abuse of office by public officials; both natural and legal persons can face administrative, civil, and criminal liability. Public officials are nominally required to submit annual financial disclosures, but the extent of enforcement and public availability is unclear.

Iran ratified the United Nations Convention against Corruption (UNCAC) in 2008. Review mechanisms have identified significant gaps in implementation, particularly regarding political immunity, independent oversight, and asset recovery. Iran is not a party to the OECD Anti-Bribery Convention. US sanctions administered by OFAC apply extraterritorially; any company with a US nexus (including use of US dollars, US banks, or US persons) faces significant exposure when engaging with Iran or Iran-linked entities.

Source: UNODC — United Nations Convention against Corruption (UNCAC)

Source: OECD — Anti-Bribery Convention

Iran has ratified the United Nations Convention against Corruption (UNCAC).

Iran's media environment is among the world's most repressive. Freedom House rates Iran 'Not Free' in both Freedom in the World (2026) and Freedom on the Net (2025). Reporters Without Borders ranked Iran near the bottom of its World Press Freedom Index, classifying the country as one of the world's largest jailers of journalists.

Freedom of expression is nominally guaranteed by the constitution but is severely limited by press law and its amendments, which allow prosecution of journalists for vaguely defined offences such as 'propaganda against the state' or 'insulting the supreme leader.' Lengthy prison sentences for journalists and online commentators have been documented. Following Israeli airstrikes in June 2025, the government imposed a near-total nationwide internet shutdown, with restrictions subsequently extended; most major social-media platforms remain blocked or filtered.

Civil-society organisations working on human rights are systematically suppressed, with members imprisoned or forced into exile. Environmental scientists and activists have been detained for raising inconvenient findings. A renewed wave of mass protests over inflation, currency collapse, and political repression emerged in late 2025, met by lethal force, mass arrests, and collective punishment according to Freedom House.

Source: Freedom House — Freedom in the World 2026 (Iran)

Source: Reporters Without Borders — Iran

Source: Freedom House — Freedom on the Net 2025 (Iran)

This profile draws on established institutional and governance-research sources, including: Transparency International (Corruption Perceptions Index); the World Bank (Worldwide Governance Indicators); the United Nations Office on Drugs and Crime (UNCAC); the International Atomic Energy Agency; the OECD; Freedom House (Freedom in the World; Freedom on the Net); the Bertelsmann Stiftung Transformation Index (BTI); the US Department of State (Trafficking in Persons Report; Iran Sanctions); the US Department of the Treasury (OFAC) and FinCEN; Reporters Without Borders; and the Carnegie Endowment for International Peace. Individual sources are also linked inline at the relevant point in each section, and consolidated below.

Sources cited (by organisation):

• Transparency International: Corruption Perceptions Index 2024

• Iran country page

• World Bank: Worldwide Governance Indicators

• United Nations Office on Drugs and Crime (UNODC): UN Convention against Corruption (UNCAC)

• International Atomic Energy Agency (IAEA): Monitoring and Verification in Iran

• Director General statement to the Board of Governors, 8 June 2026

• Chronology of Key Events

• OECD: Anti-Bribery Convention

• Freedom House: Freedom in the World 2026 (Iran)

• Freedom on the Net 2025 (Iran)

• Bertelsmann Stiftung: BTI 2026 Iran Country Report

• US Department of State: 2025 Trafficking in Persons Report (Iran)

• 2025 Trafficking in Persons Report (full report)

• 2024 Trafficking in Persons Report (Iran)

• Iran Sanctions

• US Department of the Treasury / OFAC: Iran Sanctions program

• OFAC Recent Actions (current designations)

• FinCEN: Advisories and guidance

• US Department of Commerce: Bureau of Industry and Security (export enforcement)

• Reporters Without Borders: Iran

• Carnegie Endowment for International Peace: Iran’s Water Crisis Is a Warning (Nov 2025)

• UN University: Analysis of Iran water stress

Material relating to the 2025–2026 conflict and the change in supreme leadership is included only at the level relevant to governance and compliance risk, sourced where possible to institutional bodies (notably the IAEA). This profile is not a real-time conflict tracker; readers requiring current situational awareness on security developments should consult dedicated conflict-monitoring services. Sanctions and legal designations change frequently — verify current OFAC, EU, and UK listings before any engagement.

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