UK Expands Iran Sanctions: What the 2026 Regulations May Mean for Businesses

Wednesday, October 7, 2026

The Iran (Sanctions) (Amendment) Regulations 2026 (SI 2026/983) (the Regulations) came into force in the UK on 29 September 2026. The Regulations significantly expand the UK’s sanctions on Iran and increase compliance risks for businesses with links to Iran. As with other UK sanctions regimes, the Regulations apply to all UK persons (including UK incorporated companies) anywhere in the world and anyone (whether individuals, businesses, or other organisations) located in the UK or its territorial sea. 

The Regulations amend the UK’s existing Iran regimes:

• the Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019, which target Iran’s nuclear programme; and
• the Iran (Sanctions) Regulations 2023, which target human rights abuses and “hostile activity” by the government of Iran and armed groups it backs.

The UK sanctions regime against Iran has included designations (freezing the assets of named individuals and companies) and controls on specific sensitive goods. The Regulations, however, introduce sectoral measures on finance, energy, shipping, software and other industries. Many of these measures are imposed on anyone “connected with Iran,” including individuals living or located in Iran, Iranian registered companies, and companies owned or controlled by such individuals or companies. Wide-ranging export prohibitions have been introduced in connection with energy-related goods and technology, as well as import prohibitions on Iranian oil and petroleum products.

Stephen Doughty, the UK’s Minister for the Middle East, has described the Regulations as “broadly those lifted as part of the Joint Comprehensive Plan of Action” which “double down on our action to constrain Iran’s nuclear ambition,” aligning the UK with EU measures adopted in September 2025 and expanding existing restrictions on financial and commercial dealings involving Iran.

• Investment: It is prohibited to lend to, invest in or form a joint venture with persons connected with Iran who are engaged in the oil, gas, refining, petrochemical and uranium sectors, or who make certain listed goods.
• Banking: UK financial institutions must not open new accounts or set up correspondent banking relationships or joint ventures with Iranian banks. The Office of Financial Sanctions Implementation (OFSI) has published guidance stating that with immediate effect it will apply a presumption of denial to licence applications made by designated Iranian banks operating in the UK: Bank Sepah, Melli Bank plc, Bank Saderat, Persia International Bank and Bank Tejarat.
• Insurance: The provision of insurance or reinsurance to any person connected with Iran is prohibited. There is a carve-out for insurance and reinsurance agreements made before 8 September 2026; but renewals and extensions may be caught.
• Bonds: It is prohibited to buy from, sell to or broker for the government of Iran and Iranian banks any Iranian government or government-guaranteed bonds issued after 8 September 2026.

• Imports: It is prohibited to import, buy or acquire items that originate in or are consigned from Iran, including oil and petroleum products, petrochemicals and natural gas, gold, precious metals and diamonds. It is also prohibited to move these products from Iran to other countries or to provide related financing, brokering, or technical assistance.
• Exports: Export-related restrictions have been imposed on a wide range of goods and technologies including oil and petroleum products, energy-related goods, gold, precious metals and diamonds. A detailed list of energy-related equipment, software and technology is also restricted from export to Iran, including drilling equipment, refinery units and LNG equipment.
• Services: The provision of “relevant energy services” necessary for oil and gas exploration or projects in Iran is prohibited and extends to drilling, well testing, logging and completion services and the supply of specialised floating vessels.

Sectoral software restrictions have been widened, imposing prohibitions on the export, supply and making available of certain categories of business enterprise software (e.g., enterprise resource planning (ERP), customer relationship management (CRM), supply chain and data services software) and industrial design software (e.g., computer-aided design (CAD) and building information modelling (BIM)). As first seen under the UK Russia Regulations, these sectoral restrictions extend beyond physical transfers and include intangible supply, such as downloads, cloud access and software as a service.

The restricted list of “goods of strategic concern” has been expanded to include, for example, laptops and other computers, lithium-ion batteries, transformers and radio transmission equipment, as well as “maritime goods,” such as marine engines, propellers and navigation instruments.

Existing nuclear controls have been strengthened. Powers to specify or designate vessels suspected to be linked to prohibited trade have been expanded, including a prohibition on making oil tankers available to persons connected with Iran. Aircraft registered in Iran, or owned, chartered or operated by a designated person or a person connected with Iran, are prohibited from landing in the UK.

The Regulations include winddown provisions for pre-existing contractual obligations relating to sectoral software and technology which may be performed before the end of 7 March 2027.

The Office of Trade Sanctions Implementation has published a General Licence permitting the continued operation of the Shah Deniz gas field in Azerbaijan, and OFSI has amended its existing General Licence covering Shah Deniz-related project activities enabling investment, insurance and re-insurance activities. The Regulations also include a number of exceptions relating to genuine emergencies and humanitarian purposes, certain UK oil and gas projects, and diplomatic missions. Where no exception applies, a specific licence to undertake certain activities that fall within an identified licensing ground can be applied for.

1. Check your business activities and goods against the Regulations. Businesses may wish to assess how the expanded financial, trade and transport restrictions may affect their business activities, including business activities via third parties.
2. Look beyond the Sanctions List. Many of the new rules relate to anyone “connected with Iran” – review and screen all transactions, customers, third-party relationships and supply chains involving Iran. Such a review may include assessment of any trade, financing, investment, banking and insurance-related activities, as well as the provision of any technical assistance, financial services or other restricted services.
3. Diarise deadlines and consider the need for licences. Consider exceptions and winddown provisions and determine whether any activities fall within scope and, where appropriate, whether they can be completed by the relevant deadline. Meet notification deadlines and where necessary consider whether licences can be applied for. Licence applications will generally be considered on case-by-case basis but, as explained above, OFSI has confirmed it will apply a presumption of denial to licence applications made by certain designated Iranian banks.
4. Review and update compliance programmes as necessary. Risk assessments, screening tools, contract clauses and training may need to be refreshed.
5. Take a holistic approach, considering all relevant sanctions regimes. Businesses may wish to assess their global sanctions risk and consider any touchpoints the business has with other sanctions regimes, including the US, which maintains a comprehensive sanctions regime against Iran, with sanctions that apply to both US and non-US persons.

The Regulations expand the UK sanctions regime. Failure to comply with the new sanctions may result in criminal penalties, including imprisonment, or civil enforcement on a strict-liability basis.