UK extends sectoral sanctions on Iran: The Iran (Sanctions) (Amendment) Regulations 2026

Background

In 2015, Iran and the E3/EU+3 (China, France, Germany, Russia, the United Kingdom, the United States, and the European Union) agreed the Joint Comprehensive Plan of Action (JCPOA). This placed obligations on Iran regarding its nuclear programme, in exchange for extensive sanctions relief.

But geopolitical circumstances changed, and in September 2025 the JCPOA's "snapback" mechanism was triggered, leading to reimposition of sanctions.

In our October 2025 article, we reported on the reimposition of UN sanctions on Iran following the E3's (UK, France, and Germany) triggering of the snapback mechanism, and the immediate steps taken by the EU and UK in response. The EU moved swiftly to reinstate a broad range of autonomous sectoral measures going beyond the UN Security Council snapback requirements, but the UK's initial legislative response was more limited.

The UK amended its Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019 (2019 Regulations) to reflect the snapback of UN sanctions and designated 71 individuals and entities as asset freeze targets, but merely stated that in the future it intended "to bring in legislation to impose further sectoral measures" targeting "finance, energy, shipping, software, and other significant industries".

That further legislation has arrived. On 8 September 2026, the Government laid before Parliament The Iran (Sanctions) (Amendment) Regulations 2026 (SI 2026/983), which come into force on 29 September 2026. In an accompanying Written Ministerial Statement, the Minister for the Middle East confirmed that the Regulations introduce sectoral measures which are "broadly those lifted as part of the Joint Comprehensive Plan of Action" and are designed to "double down on our action to constrain Iran's nuclear ambitions".

Overview of the new measures

The Regulations amend both the 2019 Regulations and the Iran (Sanctions) Regulations 2023. They introduce a comprehensive suite of sectoral restrictions that mirror the EU measures adopted in September 2025.

New financial measures under the amended 2019 Regulations further restrict the Government of Iran's ability to access the UK financial system. They include prohibitions on investments (loans, participations and joint ventures) with persons connected with Iran engaged in oil and gas, refining, petrochemicals and uranium; restrictions on banking relationships between UK and Iranian financial institutions; a broad prohibition on insurance and reinsurance services to persons connected with Iran (or acting on their behalf); and prohibitions on the sale or purchase of Iranian bonds.

On trade, the amended 2019 Regulations impose wide-ranging export prohibitions on energy-related goods and technology (encompassing oil and gas exploration and production equipment, refining and LNG technology, and petrochemical equipment), and corresponding import prohibitions on Iranian oil and petroleum products, petrochemicals and natural gas. The trade restrictions also cover gold, precious metals and diamonds, Iranian banknotes and coinage, and a notable new category of sectoral software (including enterprise resource planning, CRM (customer relationship management), business intelligence, supply chain management and CAD/CAM (computer aided design and manufacture) software).

On transport, the amended 2019 Regulations prohibit Iranian cargo aircraft from landing in the UK (with limited exceptions for emergencies and transit rights), and introduce a comprehensive shipping sanctions framework.

The new measures also provide for several sanctions mitigations. These include a general licence for the continued operation of the Shah Deniz gas field in Azerbaijan, exceptions for emergencies, humanitarian purposes and UK petroleum projects, and winddown provisions for sectoral software permitting the discharge of pre-existing contractual obligations provided the act is carried out before 7 March 2027.

Alignment with the EU position

The UK has now moved to broadly align its Iran sanctions with the EU measures adopted in September 2025. The scope of the new UK measures broadly tracks the EU's autonomous sanctions package under the amended Regulation (EU) No 267/2012.

Advice for businesses

As with the initial snapback measures, the practical impact of the new sanctions will depend on the extent to which businesses have exposure to the targeted Iranian sectors or persons connected with Iran. Businesses should:

• Assess all trade, investment, financial and service activities for potential exposure to the newly restricted sectors, in particular energy, petrochemicals, software, precious metals and shipping.
• Where existing contracts may be affected, consider whether any of the available exceptions or winddown provisions apply, noting in particular the 7 March 2027 deadline for the sectoral software winddown. Consider whether any exception has a corresponding notification obligation – the sectoral software winddown requires notice to be given to the authorities before, or after, a relevant act is carried out.
• Ensure that sanctions compliance screening, policies and procedures are updated to reflect the expanded scope of the UK's Iran sanctions regime.
• The Government has indicated that it remains "fully committed to a lasting and sustainable diplomatic solution" to the Iranian nuclear question. The sanctions landscape may continue to evolve, and businesses should keep abreast of any further legislative or licensing developments.

Failure to comply with the new sanctions can result in criminal penalties or civil enforcement on a strict liability basis. If there is any uncertainty regarding the application of the new measures, do not hesitate to reach out to any of our key contacts below.

Authors: Andris Ivanovs, Partner; Tom Cummins, Senior Counsel; Sophie Law, Counsel; Rebecca Akroyd, Solicitor