On 29 September 2026, a range of new and expanded UK sanctions targeting Iran entered into force, following the publication on 8 September 2026 of the Iran (Sanctions) (Amendment) Regulations 2026 (the “Regulations“).
The Regulations amend both the Iran (Sanctions) Regulations 2023, which principally address human rights abuses and hostile activity by Iran, and the Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019, which seek to restrict Iran’s ability to develop nuclear weapons and implement certain UN obligations. Certain of these measures are in line with those previously lifted in 2016 pursuant to the Iran nuclear deal.
As explained below, this is further to Iran sanctions developments globally, including recent action taken by the US, EU and UAE.
What measures have been introduced?
The new UK measures significantly expand existing restrictions on financial and commercial dealings involving Iran.
- Investment-related restrictions: The UK has introduced prohibitions on certain investment activities relating to “persons connected with Iran” that operate in sensitive sectors, including the energy sector, the strategic goods and technology sector, and parties involved in uranium-related activities. The measures prohibit specific activities with such parties, including granting loans or credit, acquiring or extending participations or ownership interests, or establishing joint ventures.
- Banking and correspondent banking restrictions: The UK has imposed specific restrictions on UK credit and financial restrictions, which prohibit such parties from opening accounts or engaging in correspondent banking activities with Iranian credit or financial institutions. The measures also prohibit various types of activities that could support such entities from building their presence in Iran or establishing a presence in the UK.
- Insurance and reinsurance activities: The UK’s measures include broad prohibitions on the provision of insurance and reinsurance services to “persons connected with Iran”, and parties acting on behalf or at the direction of such persons. There is a carve-out from these prohibitions in respect of insurance and reinsurance contracts that were lawfully entered into prior to 8 September 2026.
- Sale and purchase of Iranian bonds: The UK has imposed restrictions on dealings in Iranian bonds or bonds guaranteed by the Government of Iran and issued after 8 September 2026. The restrictions also capture brokering services and other services that support the issuance of such bonds.
- Export-related restrictions: The UK has imposed export-related restrictions on a wide range of goods and technologies, including oil and petroleum products and other energy-related goods, gold, precious metals and diamonds.
- Sectoral software measures: The UK has imposed prohibitions on the export, supply and making available of certain categories of business enterprise and industrial design software. As with similar measures under the UK’s sanctions targeting Russia, the UK’s Explanatory Memorandum for these measures (available here) notes that these measures “cover not only physical transfers, but also intangible supply (for example, through downloads, cloud access, or software provided as a service)”.
- Energy-related services: The UK’s measures include a prohibition on the provision of “relevant energy services”, which captures “any of the following services which are necessary for an oil or gas exploration project in Iran or an oil or gas production project in Iran— (a) drilling; (b) well testing; (c) logging and completion services; (d) supply of specialised floating vessels”.
- Import-related restrictions: The UK has also prohibited the import of a range of items that originate in or are consigned from Iran, including oil and petroleum products, petrochemicals, natural gas, gold, precious metals and diamonds.
- Other measures: The UK has also introduced a range of measures focused on specified ships, and a new prohibition on the landing at UK airports of certain Iranian aircraft used for air cargo services.
UK licensing developments
Alongside the new restrictions, the UK Office of Trade Sanctions Implementation published a general trade licence which permits the continued operation of the Shah Deniz gas field in Azerbaijan, which came into force on 29 September 2026.
The UK Office of Financial Sanctions Implementation (“OFSI“) amended General Licence: Shah Deniz Project Activities INT/2025/7363752, to also cover activities involving investments in relation to Iran, and insurance and reinsurance services, to reflect these new prohibitions.
OFSI also published guidance (available here) indicating that there will now be a presumption of denial to licence applications made by the following designated Iranian banks operating in the UK: Bank Sepah, Melli Bank plc, Bank Saderat, Persia International Bank and Bank Tejarat.
It is important to review the scope of any licences and related prohibitions carefully.
Wider international action
The UK measures form part of broader international developments relating to Iran. For example:
- On 24 August 2026, the US launched “Operation Economic Outcast”, expanding the sectors of the Iranian economy exposed to secondary sanctions to include aviation, digital assets, gold, shipping and technology. OFAC also designated more than 60 individuals, entities and vessels, indefinitely suspended five Iran-related general licences, subject to a limited wind-down period, and updated its alert concerning sanctions risks associated with passage through the Strait of Hormuz. Further details are available in our previous blog post here. The US Congress also passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which became law on September 18, 2026. More information on this development can be found in our blog post here.
- On 19 August 2026, the UAE announced the suspension, until further notice, of all trade and commercial exchange with Iran, as well as financial transactions involving Iranian entities, in response to escalating regional tensions. The measure is broad in scope and may affect the import, export and transit of goods, the provision of services, and payments or other financial dealings involving Iranian counterparties. Businesses operating in or through the UAE should therefore review existing and proposed Iran-related activities and exercise caution pending further guidance from the UAE authorities.
- In August 2025, Europe’s E3 (comprising France, Germany and the UK) triggered the JCPOA “snapback” mechanism. This initiated the process for reinstating the UN sanctions against Iran that had previously been lifted under the JCPOA, which were subsequently reimposed in September 2025. The EU also reintroduced both UN-mandated and autonomous EU sanctions relating to Iran’s nuclear proliferation activities, including trade, financial and transport restrictions. Further details can be found in our previous blog post here.
Implications for businesses
In consideration of the new Regulations, businesses should assess how the expanded financial, trade and transport restrictions may affect their activities, including transactions conducted through intermediaries or third countries. In particular, businesses should:
- review transactions and relationships involving Iran or persons connected with Iran against the new measures, including trade, financing, investment, banking, and insurance-related activities ;
- assess their supply chains to identify goods originating in or consigned from Iran, as well as goods or technology supplied to, or for the benefit of, persons connected with Iran;
- consider whether ancillary activities, such as technical assistance, financial services, brokering, or other related services, are separately restricted; and
- determine whether any proposed activity is prohibited, falls within an applicable exception or general licence, or requires a specific licence before proceeding.
Please reach out to our team if you have any questions in relation to these developments.
