Britain has frozen the assets of five Iranians, including two suspects in an alleged Iranian plot to kill the Saudi ambassador in the United States.
They include both men charged in the case - Manssor Arbabsiar, a 56-year-old U.S. citizen who also holds an Iranian passport, and Gholam Shakuri, an alleged member of Iran's Quds Force, who is at large in Iran.
British Foreign Secretary William Hague told Reuters he expected other EU nations to take similar steps.
The British move follows similar action by the U.S. Treasury last week, describing the four based in Iran as members of the Quds Force, a shadowy unit of the Islamic Revolutionary Guard Corps.
In Washington, U.S. National Security Council spokesman Tommy Vietor said he welcomed Britain's decision to impose the sanctions.
"This sends yet another message that the international community rejects this flagrant violation of international law," Vietor said in a statement.
From its embassy in London, Iran has again "vehemently and categorically" denied the allegations.
The U.S. charges were "based on statements, guesses and suppositions by individuals involved in drug smuggling," the embassy statement said.
U.S. officials say Arbabsiar had paid an undercover U.S. agent posing as a hit man for a Mexican drug cartel to assassinate the Saudi ambassador, Adel al-Jubeir.
U.S. President Barack Obama has said he will press for "the toughest possible sanctions" against Iran over the alleged plot.
Iranian Supreme Leader Ayatollah Ali Khamenei has vowed a strong response to any "inappropriate measure by the West."
He has accused Washington of concocting the plot to divert attention from the "Occupy Wall Street" protests.
compiled from agency reports