This alert summarizes recent developments in relation to the UK sanctions.
First, the UK introduced a substantial expansion of its Iran sanctions regime, including new trade, financial and transport restrictions. These measures are scheduled to enter into force on 29 September 2026.
Second, the UK announced a new package of measures targeting certain Israeli settlements in the West Bank, including an import ban on settlement goods and restrictions on certain types of services. Legislation implementing these measures has not yet been adopted. At the same time, a number of other countries, including several EU Member States, announced alongside the UK their intention to introduce national measures relating to the West Bank and expressed support for the development of a coordinated European approach.
On 8 September 2026, the UK Government laid the Iran (Sanctions) (Amendment) Regulations 2026, amending both the Iran (Sanctions) Regulations 2023 and the Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019. The new measures follow the UK's decision in October 2025, alongside the EU, to reimpose sanctions on Iran pursuant to sanctions "snap back" mechanisms contemplated under the Joint Comprehensive Plan of Action (JCPOA) (we discuss those mechanisms in further detail in our September 2025 client alert). The new UK measures largely, though not entirely, align with EU JCPOA-related restrictions re-introduced in 2025, and significantly expand the UK's existing Iran sanctions framework.
The new measures will take effect on 29 September 2026.
The amendments introduce the following restrictions:
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Trade restrictions and related services prohibitions: The Regulations impose a broad range of export restrictions covering various categories of goods, software and technology, including products used in the energy sector, gold, precious metals and diamonds, as well as certain categories of business enterprise software and related technology (including ERP software).
The Regulations also introduce extensive import, purchase and third-country supply restrictions in relation to, among other things, Iranian-origin or Iranian-consigned oil, petroleum products, petrochemicals and natural gas.
These trade restrictions are supplemented by corresponding prohibitions on the provision of related technical assistance, financial services and brokering services.
- Investment restrictions: The Regulations prohibit certain investments involving Iranian persons operating in specified sectors, including the energy sector and activities relating to uranium mining, enrichment and processing.
- Financial sector restrictions: UK financial institutions are prohibited from opening new branches, subsidiaries or representative offices in Iran, establishing new correspondent banking relationships with Iranian banks, or entering into certain joint venture arrangements with Iranian banks. The measures also restrict dealings in Iranian sovereign debt and debt instruments guaranteed by the Government of Iran issued on or after 8 September 2026. In addition, restrictions apply to the provision of certain insurance and reinsurance services involving Iranian persons and the Government of Iran.
- Transport restrictions: The new measures introduce a range of shipping and transport-related restrictions, including prohibitions on certain services involving specified vessels and other Iran-related maritime activities. They also prohibit Iranian cargo aircraft from landing in the UK, subject to limited exceptions.
The UK Office of Trade Sanctions Implementation (OTSI) has also issued a General Licence authorising certain otherwise prohibited activities necessary for the continued operation of the Shah Deniz gas project. The licence covers specified activities relating to the Shah Deniz Gas Field, the South Caucasus Pipeline and the Azerbaijan Gas Supply Company.
Separately, on 8 September 2026, UK Foreign Secretary Ed Miliband announced a new package of measures targeting Israeli settlements in the West Bank. The announcement forms part of what the UK Government has described as a significant shift in its approach to settlement activity.
At present, however, few concrete measures have been formally implemented. The only measures adopted to date in connection with the announcement are the designation of certain settler individuals under the UK Global Human Rights Sanctions Regime. During his announcement, the Foreign Secretary stated that the legislation underpinning the new measures is expected to be in place within six to nine months, while noting that the Government would also take certain more immediate steps in the interim.
Based on the Government's announcement, the proposed measures are expected to include:
- Restrictions on imports into the UK of goods originating from Israeli settlements in the West Bank.
- Measures targeting companies and individuals involved in "settlement expansion", including those providing construction, infrastructure, financing, or real estate services.
- A prohibition on the advertising in the UK of "illegal settlements".
To date, the UK government has not published draft legislation or guidance clarifying the scope of these proposed restrictions, and a number of important implementation questions remain open.
In addition, the Foreign Secretary announced that the UK would refuse license applications for arms and other exports that materially contribute to settlement-related activity in the West Bank.
On the same day, the Foreign Ministers of Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the UK issued a joint statement expressing their intention to introduce national restrictions and/or support EU-wide measures targeting trade and economic activity connected with Israeli settlements that they consider illegal under international law. Several countries, including Ireland, Spain, Norway, Belgium and the Netherlands, have already adopted certain measures relating to settlement activity at the national level. To date, however, EU Member States have not reached the unanimity required to adopt comparable restrictions across the European Union.
Covington's International Trade Controls team, which includes lawyers in the firm's offices in the United States, London and the European Union, regularly advises clients across business sectors concerning the full range of U.S. and European export controls and sanctions regulations. Our trade controls lawyers work regularly with Covington's Global Public Policy team—consisting of over 120 former diplomats and policymakers in the United States, Europe, the Middle East, Latin America, Africa, and Asia—many of whom have had substantial government experience in sanctions and export controls matters, and who regularly advise our clients on emerging sanctions policy matters and related engagements with government stakeholders.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our International Trade Controls or International Dispute Resolution practice.
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