25 August 2026
Executive Summary
The US sanctions package we were waiting for has now been announced.
Washington has expanded sanctions against Iran and warned countries and companies that continued commercial dealings with Tehran could ultimately jeopardise access to the US dollar-based financial system.
The Treasury announced sanctions against 60 individuals, entities and vessels, while signalling potential secondary measures against countries and companies that continue trading with Iran.
However, the measures were less sweeping than had been threatened.
Notably, major Chinese financial institutions were not included in the initial designations, and Washington has indicated that counterparties will be given time to comply before harsher measures are considered.
Iran has nevertheless promised retaliation.
The risk has therefore shifted from:
“What might Washington announce?”
to:
“How will banks, counterparties and Iran respond to what Washington actually announced?”
UK Impact
UK companies may still be affected even where no UK law has changed.
The greatest immediate risk is likely to arise through:
- Dollar payments.
- Correspondent banks.
- Shipping.
- Aviation.
- Technology.
- Gold and precious metals.
- Digital assets.
- Trade finance.
- Energy transactions.
Reuters reports that the US is specifically targeting activity across digital assets, technology, gold, aviation and shipping.
British companies should therefore distinguish between:
- UK legal prohibition.
- US secondary-sanctions exposure.
- Bank risk appetite.
- Insurer risk appetite.
- Commercial unwillingness to process a transaction.
A transaction does not necessarily need to become unlawful to become commercially impossible.
Global Impact
China remains the most important test.
Reuters estimates Chinese imports of Iranian oil have fallen substantially under existing pressure, but still averaged hundreds of thousands of barrels per day during August.
Washington has not yet directly targeted major Chinese financial institutions involved in international commerce.
That means the most significant uncertainty is what happens next.
If China continues trading and Washington subsequently escalates enforcement, global banks and commodity markets may face a much sharper compliance problem.
Iran’s response is equally important.
Tehran has warned of retaliation against US interests and energy chokepoints if Iranian infrastructure is attacked or economic pressure escalates further.
Our View
Businesses should now move from preparation to active sanctions review.
Companies should ask:
- Are any counterparties among the newly designated entities?
- Are vessels involved in our transactions newly listed?
- Do we operate in the newly targeted sectors?
- Which banks process payments?
- Are any transactions settled in US dollars?
- Do counterparties trade separately with Iran?
- Have insurers changed their underwriting position?
- Could banks reject otherwise lawful transactions?
- Do contracts contain sanctions suspension or termination clauses?
- Are beneficial owners and intermediate entities fully screened?
- Is compliance screening performed at shipment as well as contract signing?
- Who will review new US designations as they are added?
One of the biggest risks now is policy drift.
Companies should not assume Monday’s announcement is the final word.
The US has deliberately left open the possibility of stronger secondary sanctions.
Businesses therefore need to monitor not only today’s list but the direction of travel.
Risk Indicator: HIGH – DEVELOPING
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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