Islamic Republic banks in Britain: essential payments licence ends

The general licence that allowed five sanctioned Islamic Republic banks in Britain to make essential payments expired on Thursday 22 October 2026, and the British government did not renew it. The decision covers Bank Sepah, Melli Bank plc, Bank Saderat, Bank Tejarat and Persia International Bank, banks that have a branch or subsidiary in the United Kingdom.

The Office of Financial Sanctions Implementation (OFSI) at Britain's Treasury had announced on 22 September that general licence INT/2025/7628424 would not be extended beyond 22 October. The licence covered the banks' running costs, such as staff salaries and pensions, IT services, telephone and accounting. From now on, any such transaction requires a specific licence from the British Treasury.

A presumption of refusal

According to the British Treasury, licence applications from the five banks will be assessed with a "presumption of refusal": they will be rejected unless the bank provides clear and compelling reasons. A licence will be granted only where the law requires it or in exceptional and urgent circumstances, such as a risk to life or to the environment, and even then only for the most basic needs.

The other conditions are strict as well: transactions must take place on British soil, and money held by entities operating in Britain will not be sent to Iran, directly or indirectly. Cash payments and transfers between sanctioned banks are prohibited, and only recorded, auditable transactions are accepted.

Closing the Islamic Republic's financial routes in Europe

This step is part of a broader sanctions package that Britain adopted earlier and that took effect on 29 September: regulations covering the financial, energy, shipping and software sectors that restrict the Islamic Republic's access to the British financial system.

At the same time, other European countries are also closing the regime's financial routes. Germany's financial regulator announced on Thursday that Bank Saderat's Hamburg branch must be wound up, and Greece, after the sanctioning of a law firm linked to the shadow fleet, announced it would enforce sanctions related to the Islamic Republic. Earlier, German documents had shown that a network linked to Bank Shahr sought to buy a German bank.

The banks now under pressure in Britain have for years been among the Islamic Republic's main channels for foreign trade and moving money; Bank Sepah has repeatedly been sanctioned for its role in the missile programme, and Bank Melli and Bank Saderat for their links to the financial networks of the Islamic Revolutionary Guard Corps (IRGC).

With the licence gone, five Islamic Republic banks in London now need special permission from the British government even to pay their own staff.