Priya PatelLloyds and Santander have been embroiled in controversy over allegations that they provided banking services to front companies owned by a sanctioned Iranian petrochemicals company. The Financial Times reported that the banks had accounts with British front companies owned by the Petrochemical Commercial Company (PCC), which is accused by the US of assisting in fundraising for the Iranian Revolutionary Guard and of working with Russian intelligence. Although the PCC and its subsidiaries have both been under UK and US sanctions since 2018, the company purportedly carried on its activity via a number of non-sanctioned holding companies. These companies have been used to hide the ownership of PCC’s funds from Iranian firms in China. Santander UK responded on behalf of its subsidiary, stating that it “abides by its legal and regulatory obligations, and we are highly focused on sanctions compliance”. Lloyds Banking Group has said it also complies with sanctions obligations but is not able to comment on individual customers.
Key takeaways/points:
- British banks Lloyds and Santander have been accused of assisting Iranian petrochemicals company PCC
- PCC, which is under American sanctions for its alleged collaboration with Russian intelligence agencies and funding the Iranian Revolutionary Guard, operated through non-sanctioned holding companies
- PCC is said to have used the holding companies to disguise ownership of funds from Chinese companies
- Both banks have since said that they comply with sanctions and other relevant financial regulations
