On 8th July 2026, the UK enacted the National Security (State Threats) Act 2026 (the new “Act“), introducing a new power for the Home Secretary to designate bodies involved in foreign power threat activity and creating criminal offences for supporting, assisting, or obtaining a material benefit from those bodies. The new regime is intended to address a perceived gap between sanctions, terrorism legislation and the existing National Security Act 2023 framework, by targeting organisations, proxies and networks used by foreign powers to carry out hostile activity against the UK or its interests.
The new regime expands the compliance risks that businesses must consider when dealing with state-linked actors, particularly those that operate in higher risk jurisdictions that already face increased sanctions and counter-terrorism financing risks. Organisations will need to look beyond traditional sanctions screening and undertake robust due diligence to identify links to designated bodies, including through indirect ownership structures, intermediaries and proxy relationships.
On 13th July, the UK Government announced its plan to designate Iran’s Islamic Revolutionary Guard Corps (IRGC) and Islamic Movement of Companions of the Right (IMCR) and Russia’s GRU Volunteer Corps. These designations came into force on 17th July under the National Security Act 2023 (Designated Bodies) Regulations 2026, making these entities the first bodies designated under the new powers.
Background and policy rationale
The Act builds on existing legislation, including by amending the National Security Act 2023. In introducing the changes, the UK Government argued that threats from foreign powers and their proxies had increased in both scale and sophistication, creating risks to national security, democratic institutions and public safety. It considered that additional powers were needed to disrupt hostile state activity conducted through organisations and networks that operate outside formal state structures.
The policy emerged from Jonathan Hall KC’s May 2025 report in his capacity as Independent Reviewer of State Threats Legislation. He concluded that the existing counter-terrorism proscription regime was not designed to address state entities or state-threat activity and recommended the creation of a separate proscription-style power for hostile state actors, alongside existing sanctions measures. The new State Threats regime is intended to fill that gap by capturing actors whose hostile activity may not be adequately addressed through sanctions or terrorism legislation alone.
The designation regime
The designation power is inserted into the National Security Act 2023 as new section 33A. A designation may be made only where the Secretary of State reasonably believes that a “body” is, or has been, involved in “foreign power threat activity” and considers designation necessary to protect the safety or interests of the UK. “Foreign power threat activity” adopts the existing definition in section 33 of the National Security Act 2023, and covers espionage, sabotage, foreign interference, threats to life and other hostile activity carried out for, on behalf of, or with the intention of benefiting a foreign power. The designation power is intended to enable the UK Government to designate, for example, a mercenary group carrying out acts of serious violence on behalf of a foreign power, or a network threatening to commit acts that create a serious risk to the safety of the British public with the intention of benefiting a foreign power.
The language of the new Act is deliberately broad. A “body” reflects a range of organisations that might be involved in foreign power threat activity, however, the power cannot be used to designate an individual – a key difference with existing sanctions regimes.
Designated bodies are listed in a new Schedule 6A to the National Security Act 2023, and may be added, removed or amended as required through secondary legislation.
Offence A: supporting a designated body
New section 17A of the National Security Act 2023 creates three offences of supporting a designated body. In each case, the defendant must have acted for a “prohibited purpose”, meaning a purpose that they knew or ought reasonably to have known was prejudicial to the safety or interests of the UK.
- The first offence covers inviting support for, or expressing an opinion or belief that is supportive of, a designated body, where that is done for a prohibited purpose. This is conceptually similar to aspects of the terrorism proscription framework under the Terrorism Act 2000, but here the relevant body is one designated for foreign power threat activity rather than terrorism.
- The second offence is committed where a person arranges, manages, or assists in arranging or managing a meeting that they know is to support a designated body, further the activities of a designated body, or be addressed by a person who belongs or professes to belong to a designated body, provided the act is done for a prohibited purpose. A defence is available to the final limb, where the defendant shows that they had no reasonable cause to believe that the address would support a designated body or further its activities.
- The third offence applies where a person addresses a meeting and the purpose of the address is to encourage support for a designated body or further its activities, again where the conduct is for a prohibited purpose.
The maximum penalty for this offence is up to 14 years’ imprisonment and/or an unlimited fine.
Offence B: assisting a designated body
New section 17B of the National Security Act 2023 creates two offences of assisting a designated body.
- The first offence applies where a person engages in conduct which they intend will materially assist a designated body in carrying out “UK-related activities”.
- The second offence applies where a person engages in conduct that is likely to materially assist a designated body in carrying out “UK-related activities”, and the person knows or ought reasonably to know that the conduct is likely to have that effect.
Conduct that may be likely to “materially assist a designated body” has broad meaning and includes providing, or providing access to, goods, services, financial benefits or information. Examples could include supplying surveillance equipment, providing administrative or IT services, providing ready access to cash to support UK-related activities, or providing personal details about a public figure that could be used as compromising material. This is framed broadly and does not require the person to directly engage with the designated body; for example, they may be assisting the designated body through a proxy. It is sufficient that the person merely intends, knows or ought reasonably to know that their activity would materially assist the designated body.
The term “UK-related activities” includes activities taking place in the UK, and activities taking place outside the UK that are prejudicial to the safety or interests of the UK. The Act does not prohibit activities outside the UK that are not prejudicial to UK safety or interests.
There are several defences available, including:
- conduct in compliance with a legal obligation under UK law, excluding private law obligations;
- conduct by a person exercising functions of a public nature under UK law for the purposes of those functions;
- conduct as a lawyer carrying out a legal activity;
- conduct for the purpose of carrying out humanitarian activities; and
- conduct in accordance with, or in relation to, UK-related activities carried out under an agreement or arrangement to which the UK or any person acting for, or behalf or holding office under the Crown (and acting in that capacity), was a party.
The maximum penalty for this offence is up to 14 years’ imprisonment and/or an unlimited fine.
Offence C: obtaining, accepting, retaining or agreeing to obtain material benefits
New section 17C of the National Security Act 2023 creates two offences relating to material benefits from a designated body.
- The first applies where a person obtains, accepts or retains a material benefit for themselves, or obtains or accepts the provision of such a benefit to another person, where (i) the benefit is or was provided by or on behalf of a designated body, and (ii) the person knows, or ought reasonably to know, that this is the case.
- The second offence applies where a person agrees to accept a material benefit themselves, or agrees to accept the provision of such a benefit to another person, where the benefit is to be provided by or on behalf of a designated body and the person knows, or ought reasonably to know, that this is the case.
“Material benefit” is defined broadly to include financial benefits, anything that has the potential to result in a financial benefit, and information. A financial benefit may include money or a gift with monetary value, including a beneficial contract or direct cash payment. Similar to the offence of assisting a designated body, there is no requirement that the material benefit be provided directly by a designated body; it could be provided by a proxy or someone else working for or on behalf of the designated body.
Not all benefits are prohibited. A material benefit is excluded where it is provided as reasonable consideration for the provision of goods or services, and the provision of those goods or services does not itself constitute an offence. However, if goods or services are provided for a sum exceeding reasonable payment, that would still be restricted.
The offences apply to conduct outside the UK in specified circumstances, including where the material benefit is or was, or is to be, provided in or from the UK, or where the person engaging in the conduct is a UK person or acts for or on behalf of, or holds office under, the Crown or is in Crown employment (even if acting outside that capacity).
The key defences include:
- having a reasonable excuse for retaining a material benefit;
- conduct in compliance with a legal obligation under UK law;
- conduct by a person with public functions under UK law for the purposes of those functions;
- conduct in accordance with an agreement or arrangement to which the UK, or any person acting for, or behalf or holding office under the Crown (and acting in that capacity), was a party; and
- conduct for the purpose of carrying out humanitarian activities.
The maximum penalty is: (i) for obtaining, accepting or retaining a material benefit up to 14 years’ imprisonment and/or an unlimited fine; and (ii) for agreeing to accept a material benefit, up to 10 years’ imprisonment and/or an unlimited fine.
Implications for businesses
The Act expands the compliance risks associated with state-linked actors. Businesses will need to look beyond sanctions screening and assess potential exposure to designated bodies, including through aliases, intermediaries, proxy relationships and indirect ownership or control structures, as the offence is not limited to direct engagements with designated bodies. These restrictions overlap with existing sanctions measures, but cover a wider range of activities and so warrant enhanced controls when dealing with jurisdictions in which designated state actors operate.
The “ought reasonably to know” standard places particular importance on effective due diligence and escalation procedures. Businesses should review whether existing sanctions, AML, export control and information governance controls are capable of identifying and managing risks arising from the provision of support, assistance, information, services or benefits to designated bodies. For organisations operating in higher-risk sectors or jurisdictions, enhanced scrutiny of counterparties, transactions and information flows is advisable.
