UK tightens licensing policy for designated Iranian banks
The UK has introduced a presumption of denial for sanctions licence applications from five designated Iranian banks operating in the country, sharply restricting the circumstances in which frozen funds can be accessed or transactions authorised. GOV.UK
LONDON, September 23, 2026 — OFSI said the new policy takes immediate effect and covers Bank Sepah, Melli Bank plc, Bank Saderat, Persia International Bank and Bank Tejarat. All five are designated under the Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019. GOV.UK
Licence applications from the banks will ordinarily be denied unless there are "clear and compelling reasons" for allowing the proposed activity. OFSI said licences will generally only be considered where required by law or in exceptional and urgent circumstances, including risks to life, limb or environmental safety. GOV.UK The restrictions go further for any licence that is granted. Transactions will generally have to remain within the UK, funds held by UK entities will not be permitted to be remitted directly or indirectly to Iran, cash payments will not be authorised and transfers between designated banks will not be allowed.
OFSI also confirmed that General Licence INT/2025/7628424 will not be renewed when it expires on 22 October 2026. Transactions currently relying on that licence will therefore need another applicable general licence or a specific HM Treasury licence after that date.
The move follows a broader tightening of UK sanctions against Iran on 8 September, including new restrictions on Iranian financial institutions and Iranian government bonds. The latest guidance effectively closes down much of the licensing flexibility available to the five designated banks while stopping short of an absolute prohibition on licences.
Regulatory Actions
Structured data extracted from official sources and validated by sanctions experts