Your assumption is totally reasonable. Lift definitely does have the meaning you're thinking of:
1 a : to raise from a lower to a higher position : elevate
b : to raise in rank or condition
c : to raise in rate or amount
But it also has this other meaning:
3 : revoke, rescind
// lift an embargo
In the case of "lifting sanctions," this other meaning is employed. How do we know that it's this latter meaning and not the former? Only because "lifting sanctions" is a common phrase and it always has this meaning.
Also note, in case this wasn't annoying enough, that sanction can have essentially opposite meanings:
How did 'sanction' come to have two opposite meanings?