UK expands Iran sanctions regime

The Iran (Sanctions) (Amendment) Regulations 2026 came into force on 29 September 2026, introducing a broad package of additional financial, trade and transport restrictions expanding controls across sectors including financial services, commodities, shipping and software. The measures follow the UK's implementation of the Iran sanctions "snapback" in 2025 and require businesses to perform a wider assessment of products, services, counterparties, supply chains and financial arrangements to ensure compliance.

What has changed?

The Regulations expand the UK's existing Iran sanctions regime and introduce new restrictions across a number of key sectors, extending controls over:

• gold, precious metals and diamonds;
• energy-related goods and technology;
• oil, petroleum products, natural gas and petrochemicals;
• specified categories of software and technology;
• financial services and trade-related services; and
• shipping and transport-related activities involving Iran.

The restrictions are not limited to the import or export of physical goods and depending on the relevant prohibition may also extend to connected services including technical assistance, financial services, brokering services and the transfer of technology. Equally the prohibitions may bite where no direct Iranian counterparty is involved and the relevant arrangements involve third-country intermediaries or other indirect connections to Iran. Businesses should therefore consider whether their compliance frameworks are capable of identifying indirect Iran-related exposure including through complex ownership and control structures, supply chains and intermediary counterparties.

Vessels and aircraft connected with Iran are also subject to further restrictions, including strengthened Government powers to specify ships and prohibitions on certain activities involving vessels linked to sanctioned conduct. Separate restrictions also apply in relation to Iranian cargo aircraft.

The Regulations also contain anti-circumvention provisions and have significant extra-territorial reach. UK persons and UK-incorporated entities may be caught wherever they operate globally. Reporting, record-keeping and licensing requirements also continue to form an important part of the overall compliance framework.

Ensuring compliance

Businesses with actual or potential Iran exposure should consider:

• reviewing products, software and technology against the new controlled-goods categories;
• identifying Iran-related exposure across counterparties including customers and intermediaries;
• reviewing Iran-related financing, insurance, shipping and other associated services;
• checking existing contracts to ensure sanctions clauses are adequate and workable;
• understanding applicable exceptions and licences;
• considering the wind-down of activities which are now prohibited; and
• updating sanctions screening and compliance procedures where necessary, including providing business-wide training.

The Government has introduced licensing and wind-down arrangements for certain activities and the applicable conditions and deadlines vary depending on the prohibition. Businesses should therefore assess existing arrangements against the applicable provisions rather than assuming that they can continue their activities unchanged.

Crucially, the Regulations strengthen enforcement powers for breaches of the prohibitions and non-compliance may be costly. Businesses must therefore understand not only whether an activity is prohibited, but what other connected obligations it has such as reporting and record-keeping where there is a potential or actual breach.

Many UK businesses have invested heavily in sanctions compliance infrastructure in response to recent measures, particularly those targeting Russia. The expansion of the Iran sanctions regime provides an opportunity to build on those existing frameworks and apply lessons learned to Iran-related risks. The message is not that businesses need to start again from scratch but rather to leverage and, where necessary, enhance existing systems and controls so that they remain fit for purpose in light of the expanded Iran sanctions regime.