This study aims at exploring the efficacy of European sanctions, which have been classified into moderate, extensive and comprehensive, according to their degree of intensity, and assessing whether the cost-efficacy paradox of sanctions, observed in most of historical episodes of international restrictive measures, applies also to European provisions. After reviewing the historical and legal evolution of European sanctions policy, and having examined the successful case of Iran, a definition of the cost-efficacy paradox is provided by means of a thorough analysis of the existing literature on sanctions. Subsequently, European restrictive measures are assessed in terms of cost-effectiveness using the gravity model of international trade, which helps us define the impact of such measures on bilateral trade. Eventually, results are compared with the policy outcome in target countries in terms of compliance to the sender(s) requests in order to establish if cost-effectiveness translates into efficacy, or if the cost-efficacy paradox is operating. The case of Iran emerges as an exception to the paradox.