U.K. Reimposes Sectoral Sanctions on Iran, Affecting Aviation and Shipping Industries

The United Kingdom's Iran (Sanctions) (Amendment) Regulations 2026 reimpose sectoral sanctions broadly corresponding to measures previously lifted under the Joint Comprehensive Plan of Action (JCPOA) following the United Nations sanctions snapback in October 2025.

What the Regulations Cover

Shipping

Two key concepts run through the measures: a "designated person" is an individual or entity listed on a United Kingdom sanctions list; a "specified ship" is a vessel that the Secretary of State has identified (generally by International Maritime Organization (IMO) Number) as being involved in, or likely to be involved in, relevant activity. Different prohibitions are attached to each.

• Vessel Specification Powers: The Secretary of State may "specify" a ship (generally by IMO Number) when there are reasonable grounds to suspect involvement in relevant activities, including nuclear-related activity, sanctions evasion, serious human rights violations in Iran, hostile activity by the Iranian government or its proxies, and carriage of Iranian-origin oil, petroleum products or natural gas (including certain third-country movements and ship-to-ship transfers).
• Chartering and Operating Ban: It is prohibited to charter or operate a specified ship if the person knows or has reasonable cause to suspect the ship is specified (unless licensed or excepted).
• Maritime Services Ban: The regulations prohibit providing brokering, chartering, crewing, financial, operating or technical services in relation to a specified ship. They also prohibit providing services connected with the acquisition, sale, transfer or supply of a specified ship, and procuring services relating to such a ship.
• Port Access and Detention: Specified ships – and ships owned, controlled, chartered or operated by designated persons – are prohibited from entering U.K. ports and may be subject to movement, detention or port-barring directions.
• Registration Ban: U.K. registration must be refused for specified ships and ships owned, controlled, chartered or operated by designated persons. The Secretary of State may also direct termination of an existing registration.
• Oil/Gas Vessels and Technical Assistance: It is prohibited to make vessels designed or modified for transporting or storing oil and petroleum products available to a person connected with Iran. Technical assistance relating to tankers and cargo vessels for Iran-connected persons, and to ships generally for designated persons, is also restricted.
• Iranian Oil, Gas and Petrochemicals: Separate prohibitions cover import and acquisition of Iranian oil and petroleum products, petrochemicals and natural gas, together with related technical assistance, financial services and brokering. Limited exceptions and licensing provisions apply.

Insurance and Reinsurance

• A broad prohibition applies to providing insurance or reinsurance to any person "connected with Iran" or acting on their behalf. A person is "connected with Iran" if they are ordinarily resident or located in Iran, incorporated or domiciled in Iran, or owned or controlled by such persons. The prohibition expressly covers maritime transportation of oil and petroleum products.
• Preexisting agreements concluded before September 8, 2026, are grandfathered, provided they were lawful when made. Extensions and renewals are treated as new services unless there is a preexisting obligation to accept them.
• Limited exceptions permit compulsory/third-party insurance for Iranian persons in the U.K. and insurance for non-designated owners of ships or aircraft chartered by an Iran-connected person.

Financial Measures

• Additional prohibitions cover granting loans or credit, acquiring participations and creating joint ventures with Iran-connected persons engaged in specified sectors (including oil and gas, petrochemicals and uranium).
• U.K. credit and financial institutions are prohibited from opening accounts, establishing correspondent banking relationships, or forming joint ventures with Iranian credit or financial institutions.

General Licences

• The Office of Trade Sanctions Implementation (OTSI) and the Office of Financial Sanctions Implementation (OFSI) are issuing general licences permitting continued trade and financial activities related to the Shah Deniz gas field in Azerbaijan, taking effect on September 29, 2026. This aligns with European Union and U.S. carve-outs.

Aviation

• A landing prohibition applies to "Iranian aircraft" – defined narrowly as aircraft used exclusively for air cargo services that are owned, chartered or operated by a designated person, a person connected with Iran or registered in Iran.
• Passenger aircraft are not caught, and there is no ban on exporting aircraft or parts to Iran.

What This Means in Practice

Shipping/Maritime

The new measures have broad reach across the maritime industry – affecting shipowners, charterers, operators, managers, financiers, brokers, insurers and other service providers. Key practical steps include:

• Screen Vessels and Counterparties. Screen vessels by IMO number and review ownership, control and counterparties before fixtures and services. Continue screening during longer-term relationships, as specification can be based on past, present or likely future activity.
• Strengthen Voyage and Cargo Diligence. Verify cargo origin and destination, counterparties and prior or proposed ship-to-ship transfers, including for third-country movements of Iranian-origin oil or gas.
• Review Charterparty Protections. Check sanctions warranties, cargo and voyage disclosure requirements, rights to reject prohibited employment or counterparties, ship-to-ship transfer controls, and suspension or termination rights following designation or specification.
• Review Insurance. Preexisting agreements concluded before September 8, 2026, may continue if lawful when made, but extensions and renewals are generally treated as new services unless there was a preexisting obligation to accept them. A limited exception permits cover for a non-designated owner whose ship is chartered by a person connected with Iran.
• Review Financing. A mortgagee interest is excluded from the beneficial-interest test for ship ownership, but separate restrictions may apply to financial services or funds connected with a specified ship or prohibited trade.
• Confirm Exceptions and Licensing. Limited exceptions cover emergencies, ship safety and human life. A licence issued by the secretary of state may, in certain circumstances, authorize otherwise prohibited chartering or operation of a specified ship.

Aviation

• Direct Impact on Aviation Industry Appears Limited: By way of comparison, the Russia aviation regime is significantly broader – banning all Russian aircraft from U.K. airspace, prohibiting aircraft and parts exports, and restricting aviation services generally.
• The insurance prohibition targets persons "connected with Iran" or acting on their behalf. As a result, insurers providing coverage to non-Iranian airlines operating flights in and out of Iran would not ordinarily be subject to the prohibition.
• The new U.K. measures are narrower than the U.S. Department of the Treasury Office of Foreign Assets Control's suspension of GL J-1 announced on September 8, 2026, which directly restricts non-U.S. operators from reexporting civil aircraft to Iran on temporary sojourn. This distinction is significant because certain airlines relied on the temporary sojourn exception to operate leased aircraft on flights to and from Iran.

All measures enter into force on September 29, 2026. If you have any questions about how the U.K. regulations may affect your operations, contracts or compliance obligations, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.