UK expands sanctions agenda with planned settlement trade ban and tougher Iran measures

The government has announced plans to introduce a new sanctions regime that would include restrictions on goods originating from Israeli settlements in the occupied Palestinian territories, alongside sanctions targeting certain individuals and businesses connected with settlement expansion.

Rachel Trease, global investigations specialist at Pinsent Masons, said: “The announcement on the import ban does not create any immediate legal prohibitions.  However, businesses should monitor developments closely given the government’s stated intention to introduce the import ban on settlement goods and to expand sanctions measures to cover those involved in activities supporting settlement expansion.”

Although the government has committed to introducing the measures, implementing legislation is not expected for between six and nine months. Until that legislation is published, the precise scope of the regime, any exemptions and the commencement date is uncertain. When announcing the new sanctions in parliament, the UK’s foreign secretary announced the new sanctions regime will include “appropriate religious exemptions.”

In a subsequent research briefing, the foreign secretary said the import ban would apply geographically.  He said: “It will be focused on the settlements in the occupied territories, and we will absolutely ensure that it does not hit green-line Israel.”

Alongside the announcement, the UK imposed financial sanctions on five settlers in the West Bank under the Global Human Rights sanctions regime and Al-Qard Al-Hasan - Hizballah’s financing arm – under the counter-terrorism sanctions regime. Some of these individuals were already targeted by equivalent sanctions in the EU.

As a result, many businesses – particularly those bound to comply with EU sanctions and having links with the region – may have already conducted sanctions-related assessments of their exposure to those individuals and entities they own or control, Trease said.

Separately, the UK has introduced new sanctions legislation relating to Iran. The Iran (Sanctions) (Amendment) Regulations 2026, which enter into force on 29 September, reintroduce a number of sectoral sanctions that had previously been suspended under the 2015 nuclear agreement with Iran.

The measures target trade in precious metals, diamonds, natural gas, oil and petroleum products, petrochemicals, as well as other items.

The UK measures follow additional action taken by the US, including the expansion of secondary sanctions risks for certain non-US persons engaged in business involving Iran as part of a sanctions and economic pressure campaign targeting Iran, dubbed ‘Operation Economic Outcast’ by the US Treasury.

Stacy Keen, sanctions specialist at Pinsent Masons, said: “The developments highlight the importance of ongoing sanctions due diligence for businesses with exposure to the region. Companies may wish to review their supply chains, counterparties and existing compliance procedures as further details of the UK measures emerge.”