Behind the operational announcements of the Persian Gulf Strait Authority on 5 May and 18 May 2026 sits a piece of legislation. Reporting in BusinessToday, the Windward analytical service, House of Saud, Türkiye Today, and the Iranian parliamentary record indicates that the PGSA is the executive arm of a twelve-article statute moving through the Islamic Consultative Assembly under the working title “Law on Establishing Iran’s Sovereignty over the Strait of Hormuz.” The statute was ratified by the National Security and Foreign Policy Committee on 21 April 2026 and is awaiting the full-chamber vote. The committee’s chairman, Ebrahim Azizi, indicated on 16 May that the full text would be unveiled in the near term.
The site has, until now, mostly read the PGSA at the operational level — the vessel-by-vessel vetting in the PGSA on the Suez/Panama yardstick post, the bilateral carve-out pattern in the bifurcating-strait post, the insurance-product launch in the Hormuz Safe post. The underlying legal architecture deserves its own reading. This post takes the publicly reported elements of the twelve-article statute and reads each one against the equivalent provisions in the statutory frameworks of the Suez Canal Authority and the Panama Canal Authority. The exercise is not adversarial. It is the only way to see what the legal-architecture choice the Iranian parliament is in the process of finalising actually does to the institutional configuration the chokepoint produces.
The reported elements
The publicly available reporting on the statute, summarised across BusinessToday, the Windward commentary, Türkiye Today, and House of Saud, identifies the following operational provisions. Israeli vessels are banned under any circumstance. Vessels of nationalities the Iranian government characterises as “hostile” require Supreme National Security Council approval. Vessels flagged from states the legislation characterises as having “damaged Iran” are denied passage until compensation has been paid. All transit fees are to be denominated in Iranian rial. All shipping documents associated with the transit are required to use the term “Persian Gulf” rather than alternative geographic terms. The IRGC retains seizure authority for non-compliance with the statute. Approximately twenty per cent of cargo value is confiscable as a penalty for non-compliance. The PGSA is named as the executive administrative body responsible for implementing the statute.
Each of these provisions has an analogue in the Suez statutory framework or in the Panama Canal Authority’s constitutional and statutory documentation. Reading them in parallel produces the clearest available picture of what the legal-architecture choice is.
Article-by-article comparison: who is admitted
The Iranian statute’s admission criteria are political and selective: Israeli vessels banned, “hostile” vessels under SNSC approval, “damaged Iran” flag-states denied. The Suez Canal Authority’s admission criteria, under the Egyptian statutory framework and the 1888 Convention of Constantinople which the Authority operates under, are non-political: any vessel of any flag-state, in time of peace and in time of war, is admitted on equal commercial terms, with restrictions only for vessels that would, by their physical characteristics (size, draft, cargo type), present operational safety concerns the Authority has the technical mandate to assess. The Panama Canal Authority’s admission criteria, under the 1977 Torrijos-Carter treaties and Title XIV of the Panamanian constitution, are similarly non-political: equal access on commercial terms, with operational restrictions only.
The Iranian statute, on its public terms, replaces the equal-access principle with a flag-state-political selection criterion. This is the institutional configuration the unilateral framework announced on 30 April and analysed in the new-chapter post proposed. The statute formalises the configuration in legislation, which closes the question of whether the political-selection element is a transitional crisis-period measure or a permanent design choice.
Article-by-article comparison: how transit is paid for
The Iranian statute denominates fees in Iranian rial. The Suez Canal Authority denominates fees in United States dollars (with allowances for special drawing rights in some scheduled cases). The Panama Canal Authority denominates fees in United States dollars and routes payment through Citibank and a small set of named major banks. The dollar denomination at both existing authorities is the operational consequence of the fact that global crude, LNG, container, dry-bulk, and tanker traffic is itself dollar-denominated, that vessel insurance is dollar-denominated, that the major shipping lenders and protection-and-indemnity clubs are dollar-denominated, and that the chokepoint authority needs to be in a currency the operator class can lawfully and routinely pay through the global banking system.
The rial denomination in the Iranian statute is, in this comparison, a sovereignty assertion rather than a banking arrangement. The rial is not freely convertible on global foreign-exchange markets at scale; it is subject to extensive United States and European Union sanctions architecture; it cannot, in practice, be acquired and held in the volumes a global tanker fleet would require for chokepoint-fee payment without exposing the operator to compliance pressure on the channel-leg analysis the Treasury position post set out. The bilateral and crypto channels the PGSA actually operates on are workarounds for the rial denomination; the statute itself, in its formal text, requires rial.
Article-by-article comparison: who administers
The Iranian statute names the PGSA as the executive administrative body, with the IRGC retaining seizure authority for non-compliance and with the Supreme National Security Council as the approval body for higher-tier admission decisions. The administrative chain runs from the SNSC through the PGSA to the IRGC Navy’s Hormozgan Provincial Command. The body is, on its statutory description, an instrument of state security and is not insulated from direct military command.
The Suez Canal Authority is a statutory civilian authority of the Egyptian government, with leadership drawn from maritime engineering and management backgrounds, reporting through the Ministry of Transport to the Prime Minister and the President, with a chain of command insulated from direct military command. The Panama Canal Authority is constitutionally autonomous under Title XIV of the Panamanian constitution, with a board of eleven directors appointed under prescribed procedures (seven by the President with National Assembly approval, three rotating among other branches and entities), explicitly prohibited from receiving direct political or military instructions in its operational decisions.
The administering-body question is the structural choice that determines whether the chokepoint authority operates as a chokepoint authority or as a state-security instrument. The Iranian statute’s choice is the latter. The Suez and Panama statutory frameworks make the former choice explicitly and have operated on that choice for decades.
Article-by-article comparison: enforcement and penalty
The Iranian statute provides for IRGC seizure authority and approximately twenty per cent cargo-value confiscation as a non-compliance penalty. The Suez Canal Authority’s enforcement and penalty arrangements operate through the Egyptian civilian legal system: tariff disputes are resolved through the Authority’s standing administrative process, with appeal channels to the Egyptian courts; safety and operational violations are handled through pilotage and traffic-management procedures with proportionate administrative penalties; physical seizure is reserved for the Egyptian state authorities operating under standard civilian-law procedures, not the Authority directly. The Panama Canal Authority’s arrangements are analogous, operating through the Panamanian civilian legal system with the Authority itself having no direct seizure authority.
The twenty-per-cent cargo-value confiscation provision in the Iranian statute is the substantive content that distinguishes the enforcement structure most sharply from the existing chokepoint authorities. A twenty-per-cent confiscation on a VLCC cargo at present crude prices is approximately twenty-five to forty-five million United States dollars per ship for a one-time non-compliance event. This is not a tariff dispute; it is a sovereignty-asserting penalty that the chokepoint authority can impose unilaterally. The provision converts the chokepoint authority from a transit-fee-collecting body into a sanctions-imposing body, with the IRGC as the enforcement arm.
Article-by-article comparison: what the documents say
The Iranian statute requires the use of the term “Persian Gulf” in all shipping documents associated with the transit. The Suez and Panama statutory frameworks make no equivalent terminological requirement. The naming requirement is a sovereignty assertion specific to the long-standing dispute between Iran and several GCC member states over the geographic naming of the body of water, with no operational equivalent in the Suez or Panama precedents.
The requirement is, in itself, a small operational matter for most operators — shipping documents can be reissued with the specified terminology. The more substantive point is that the statutory framework includes the kind of provision that a sovereignty-asserting body would include and that a services-oriented chokepoint authority would not. The provision is, on its own, diagnostic of which kind of authority the statute is constituting.
The legal-architecture summary
The twelve-article statute, taken on its publicly reported provisions, is the legal architecture for a sovereignty-asserting toll-collection arrangement administered by a state-security instrument. Each substantive element diverges from the equivalent provision at Suez or Panama in the same direction: away from civilian administration, away from equal access, away from convertible-currency settlement, away from proportionate administrative penalties, away from operational neutrality, toward sovereignty assertion as the organising principle. The statute, in its full ratified form, will be the most explicit articulation yet of the institutional configuration Tehran is pursuing for the chokepoint.
The structural reading the site has been carrying since 18 April is that the operator class, the buyer class, the underwriter class, and the broader international institutional architecture (UNCLOS, IMO, ICS, ITF, and the working chokepoint authorities themselves) cannot, on their respective working assumptions, transact routinely with a chokepoint authority configured as a sovereignty-asserting state-security instrument. The 14-15 May Trump-Xi summit’s “no charge for transiting” line analysed in the Trump-Xi post, the Jeddah communique and the UN draft resolution analysed in the GCC long-term arrangement post, and the 25 April International Chamber of Shipping statement analysed in the ICS post are the formal expressions of that working assumption by the principal counterparties. The twelve-article statute is the formal expression of the divergent assumption by the Iranian government.
What an alternative legal architecture would look like
The legal architecture for a Hormuz transit authority on the Suez or Panama model would replace each of the twelve-article statute’s distinguishing provisions with the equivalent provision from one of the existing frameworks. The admission criterion would be equal access on commercial terms, with restrictions only for operational-safety reasons. The denomination would be dollars, with named depository banks. The administering body would be a civilian statutory or constitutionally-autonomous authority insulated from direct military command. The enforcement structure would operate through the civilian legal system of the host state, with proportionate administrative penalties and standing appeal channels. The naming and terminological provisions would not appear in the statute. The IRGC’s role in the chokepoint configuration would be limited to maritime security and search-and-rescue cooperation under the host state’s general civilian-defence framework, with no direct administrative or seizure authority over commercial transit.
The full alternative legal architecture is, in this reading, available from the existing precedents. It is not exotic. It has been the operating arrangement at the world’s two existing treaty-backed chokepoint authorities for decades. The comparison page walks through the institutional arithmetic. The rate schedule proposes the services-fee tariff under the alternative architecture. The calculator prices a transit against it. The twelve-article statute is the moment at which the choice between the two legal architectures becomes explicit and formal on the Iranian side. The work of the negotiation, on the site’s reading, is to make the alternative legal architecture equally explicit on the multilateral side.
Sources: BusinessToday, “Iran defines Strait Of Hormuz regulatory zone: What the new PGSA means for global trade,” 21 May 2026; Windward analytical commentary, “Iran’s Hormuz Transit Toll Mechanism and What It Means at Sea”; Windward, “Iran’s PGSA Toll Regime Reshapes Hormuz Into a Holding Queue”; Türkiye Today, “Iran formally launches Persian Gulf Strait Authority to manage Hormuz traffic”; House of Saud, “Iran Launches PGSA Hormuz Transit Authority”; Euronews, “Iran sets up Hormuz transit authority to charge ships for passage,” 18 May 2026; Iranian parliamentary reporting on the National Security and Foreign Policy Committee’s 21 April 2026 ratification of the draft “Law on Establishing Iran’s Sovereignty over the Strait of Hormuz”; public statements by committee chairman Ebrahim Azizi on 16 May 2026; Suez Canal Authority statutory framework and the 1888 Convention of Constantinople; Panama Canal Authority constitutional and tariff documentation under Title XIV of the Panamanian constitution; the 1977 Torrijos-Carter treaties; United Nations Convention on the Law of the Sea, 1982; this site’s prior analyses on the UNCLOS vacuum (24 April), the ICS statement (25 April), the new-chapter framework (30 April), the Treasury position (30 April), the GCC long-term arrangement (11 May), the Trump-Xi summit (15 May), the PGSA on the Suez/Panama yardstick (19 May), the Hormuz Safe insurance post (20 May), and the bifurcating-strait post (20 May).