Two of the UK’s biggest banks, Santander UK and Lloyds, provided accounts to British companies with links to Iran’s intelligence services.
Iran evaded Western sanctions by using accounts at two UK banks to move money around the world in an extensive sanctions evasion scheme, according to the Financial Times.
Lloyds Banking Group and Santander UK provided accounts to front companies that were secretly owned by a sanctioned and state-controlled Iranian petrochemicals company, the news outlet said, citing documents.
The Petrochemical Commercial Company’s (PCC) British subsidiary (PCC UK) is still operating near Buckingham Palace.
Both companies have been under US sanctions since 2018, meaning that Western banks are blocked from doing business with them.
However, the petrochemicals company had found ways of setting up front companies in the UK to “receive funds from Iranian front entities in China”, a set-up that was part of a “vast sanctions-evasion scheme” backed by Tehran’s intelligence services, according to the FT.
How two big UK banks provided accounts to companies linked to Iran
The PCC set up companies in the UK via “trustee agreements and nominee directors”, the FT said.
One of these companies – Pisco UK – is owned by British national Abdollah-Siauash Fahimi, who appears to have signed an agreement to own the company in trust on PCC’s behalf. He was also a director of PCC UK in 2021.
In 2021, Pisco’s Santander account received a transfer from a Chinese entity, also linked to PCC, reported the newspaper.
The lender said it couldn’t comment on individual clients but it was “highly focused on sanctions compliance”. The bank account in question has been closed, the FT said.
Aria Associates, another UK front company linked to PCC, had a bank account at Lloyds, according to the report. The firm is owned by Mohamed Ali Rejal, who is also deputy CEO of PCC UK.
FT refers to emails which supposedly show that in July 2021, a PCC accounting official in Tehran emailed Rejal about a planned payment from China, telling him, “Please send us the safe account No. For payment.” And that he instructed his coworkers to avoid any indication of PCC in the transfer.
Lloyds also declined to comment on individual clients and said it complied with sanctions laws.
Share prices of Spain’s Santander bank fell more than 4% by Monday midday in Madrid. Lloyds’ share prices were in a mild negative in the morning but climbed back into 0.6% positive by noon, in London.