The UK government’s announcement on 8 September 2026 of an intention to impose sanctions related to West Bank settlements (Settlements Sanctions) highlights the increasing complexity of sanctions compliance for business operating internationally, including those with global supply chains.
At this stage few specific details have been announced regarding the prospective Settlements Sanctions, other than (i) that they are likely to target the provision of services such as construction, infrastructure, financing, or real estate for settlement expansion, in addition to an import ban on goods from settlements, and (ii) there is an intention that they will be in place within 6 to 9 months.
Given the lack of current detail, and uncertainty over whether the proposals will survive developments in the near future, including the Israeli legislative election of 27 October 2026, the extent and impact of any measures is currently not clear. The proposals do however highlight:
- That there are no easy assumptions to be made in the current geopolitical climate. Disruption can result from the imposition of sanctions, but also the imposition of tariffs or export controls, currency fluctuations and the outbreak of conflict.
- Sanctions or the threat of sanctions can currently be regarded as a popular foreign policy tool, and countries are increasingly willing to “go it alone” in applying these outside of a broad regional/alliance consensus or established UN frameworks.
- That there should be no default assumption that sanctions compliance only concerns the financial services sector, or operates to prevent the sale of goods to certain territories: existing UK sanctions (depending on the regime) already contain import bans, restrictions on the provision of certain services, restrictions on investments in companies and land, and reporting requirements on firms operating in certain sectors, such as art market participants and estate and letting agents. Under UK sanctions law there are also general risks of a breach in establishing commercial relations with an individual or company that may be a “designated person” or linked to one.
As a result, actions that businesses should be considering now include:
- “Future-proofing” contracts to cover potential risks associated with the imposition of government measures affecting trade, or logistical issues or price fluctuations caused by global instability is an increasingly important consideration. Relevant provisions will depend on the nature of the underlying contract, but measures mitigating risks might include termination rights, shorter terms with renewal options, counterparty conduct warranties, carefully drafted force majeure clauses and price review clauses.
- Given the increasingly patchwork nature of sanctions, there is no one-size fits all approach to compliance globally, and attention may need to be paid to the specifics of relevant local sanctions regimes, including that of the UK.
- Sanctions compliance considerations should typically be included (i) as part of any global supply chain audit or (ii) as part of any customer or supplier on-boarding procedures.
