Kalyeena Makortoff
Banking correspondent
Mon, 5 February 2024
Santander and Lloyds could face penalties if they are found to have in any way helped Iran’s Petrochemical Commercial Company evade US sanctions.
Mon, 5 February 2024
Santander and Lloyds could face penalties if they are found to have in any way helped Iran’s Petrochemical Commercial Company evade US sanctions.
Photograph: Raheb Homavandi/Reuters
Two of the UK’s largest lenders, Santander UK and Lloyds Banking Group, allegedly held bank accounts for front companies that helped Iranian entities evade US sanctions, according to reports.
The news has rattled investors, who sold off shares in the two banks on Monday morning, amid fears that the lenders could face penalties if they are found to have in any way assisted Iran’s state-controlled Petrochemical Commercial Company (PCC).
The Tehran-controlled company has been accused by US officials of raising hundreds of millions of dollars for Iran’s Revolutionary Guards al-Quds Force, and working with Russian intelligence agencies. PCC and its British subsidiary have been under US sanctions since November 2018.
PCC is alleged to have moved money through a Santander UK business bank account by using a front company registered to a detached house in Surrey, according to documents seen by the Financial Times.
It also used a separate front company to move money through an account at Lloyds Banking Group, the newspaper claimed.
The report will raise fresh concerns about how the UK’s financial system could be being used to launder cash or hide illicit payments.
“This is, frankly, a shocking failure to act in lockstep with our allies to shut down the financing of a hostile regime,” said Liam Byrne, Labour MP and chair of the business and trade committee. “It beggars belief that a business sanctioned by the US is freely trading in London.”
He wrote on the X platform that MPs on the committee would be “cross-examining ministers, Companies House, National Crime Agency, HMRC & SFO [Serious Fraud Office] to explain how the hell this happened” when it holds an evidence session on economic crime on Tuesday morning.
The news took a toll on the share price of the two lenders, with Lloyds tumbling as much as 2% in morning trading, before recouping some losses to trade lower by 0.4% by early afternoon. Shares in Santander, which is listed in Spain, fell by more than 3%.
Santander said it had not broken any rules. “Santander is not in breach of US sanctions based on our investigation. We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and US authorities.”
Lloyds is also pushing back against the claims outlined in the FT report.
“We believe we have met all legal and regulatory obligations and, based on our own investigation, we do not believe we have breached any sanction requirements,” the banking group said in a statement.
Santander and Lloyds reportedly helped Iran-backed oil firms evade UK sanctions
Chris Dorrell
Mon, 5 February 2024
Two of the UK’s largest lenders, Santander UK and Lloyds Banking Group, allegedly held bank accounts for front companies that helped Iranian entities evade US sanctions, according to reports.
The news has rattled investors, who sold off shares in the two banks on Monday morning, amid fears that the lenders could face penalties if they are found to have in any way assisted Iran’s state-controlled Petrochemical Commercial Company (PCC).
The Tehran-controlled company has been accused by US officials of raising hundreds of millions of dollars for Iran’s Revolutionary Guards al-Quds Force, and working with Russian intelligence agencies. PCC and its British subsidiary have been under US sanctions since November 2018.
PCC is alleged to have moved money through a Santander UK business bank account by using a front company registered to a detached house in Surrey, according to documents seen by the Financial Times.
It also used a separate front company to move money through an account at Lloyds Banking Group, the newspaper claimed.
The report will raise fresh concerns about how the UK’s financial system could be being used to launder cash or hide illicit payments.
“This is, frankly, a shocking failure to act in lockstep with our allies to shut down the financing of a hostile regime,” said Liam Byrne, Labour MP and chair of the business and trade committee. “It beggars belief that a business sanctioned by the US is freely trading in London.”
He wrote on the X platform that MPs on the committee would be “cross-examining ministers, Companies House, National Crime Agency, HMRC & SFO [Serious Fraud Office] to explain how the hell this happened” when it holds an evidence session on economic crime on Tuesday morning.
The news took a toll on the share price of the two lenders, with Lloyds tumbling as much as 2% in morning trading, before recouping some losses to trade lower by 0.4% by early afternoon. Shares in Santander, which is listed in Spain, fell by more than 3%.
Santander said it had not broken any rules. “Santander is not in breach of US sanctions based on our investigation. We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and US authorities.”
Lloyds is also pushing back against the claims outlined in the FT report.
“We believe we have met all legal and regulatory obligations and, based on our own investigation, we do not believe we have breached any sanction requirements,” the banking group said in a statement.
Santander and Lloyds reportedly helped Iran-backed oil firms evade UK sanctions
Chris Dorrell
Mon, 5 February 2024
The Financial Times reported that both Lloyds and Santander provided accounts to British front companies owned by Petrochemical Commercial Company (PCC).
UK banks have provided bank accounts to holding companies linked to a state-backed Iranian petrochemicals company which has been under western sanctions since 2018, according to reports.
The Financial Times reported that both Lloyds and Santander provided accounts to British front companies owned by Petrochemical Commercial Company (PCC).
PCC is a sanctioned Iranian petrochemicals company accused by the US of helping to raise hundreds of millions of dollars for the Iranian Revolutionary Guard and of working with Russian intelligence agencies.
Both PCC and its subsidiaries have been under UK and US sanctions since 2018.
The company has continued to operate out of an office in Grosvenor Gardens by using a web of holding companies that are not sanctioned, the report suggests.
According to the FT, PCC has used these companies to receive funds from Iranian front entities in China while concealing their real ownership.
One of these companies, Pisco UK, used a business account with Santander UK. Another, called Aria Associates, has an account with Lloyds.
A Santander UK spokesperson said the bank was “unable to comment on specific client relationships” but stated the bank “abides by its legal and regulatory obligations, and we are highly focused on sanctions compliance.”
“Where we identify sanctions risks, we will investigate and take appropriate action,” they said.
A Lloyds Banking Group spokesperson said: “The group’s business activities are conducted to ensure compliance with applicable sanctions laws. We are committed to adhering to all legislative and regulatory requirements as they relate to economic crime.”
“We are not permitted to comment on individual customers. In addition, due to legal restrictions, we cannot comment on the submission of suspicious activity reports to relevant authorities when and if they occur,” they continued.
The revelations come as tensions continue to rise between the west and Iran. The US carried out further airstrikes against the Iranian-backed Houthis on Sunday.
The UK government has been approached for comment.
Santander, Lloyds' shares hit by report Iran used accounts to evade sanctions
Mon, 5 February
By Jesús Aguado and Iain Withers
MADRID/LONDON (Reuters) -Santander and Lloyds shares fell on Monday after the Financial Times (FT) newspaper reported that Iran used accounts held at the banks in the United Kingdom to covertly move money around the world in a sanctions-evasion scheme backed by Iran's intelligence services.
Lloyds and Santander UK provided accounts to British front companies allegedly secretly owned by a sanctioned Iranian petrochemicals company based in London, the FT reported citing documents the newspaper had obtained.
Shares in Madrid-based parent Santander fell as much as 6.1% and were down 4.9% at 1503 GMT, wiping off around 3 billion euros in value from the euro zone's second biggest lender by market capitalisation, according to data from LSEG, while shares in Lloyds declined 0.5%.
Santander shares rose more than 6% last week following 2023 earnings that beat forecasts.
"The market must be realising that they may be fined," said Nuria Alvarez, an analyst at Madrid-based broker Renta 4.
Santander and Lloyds said in separate statements that they believed they were not in breach of sanctions, based on their own investigations.
"We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and U.S. authorities," a Santander spokesperson said.
A Lloyds spokesperson said the group was committed to adhering to economic crime laws and regulations, adding it could not comment on individual customers.
British regulator the Financial Conduct Authority said it was in contact with the banks and with the UK's Office of Financial Sanctions Implementation (OFSI).
The U.S. Treasury Department and Britain's foreign ministry did not immediately reply to requests for comment.
European lenders, such as Unicredit and Standard Chartered, have been hit with large penalties over Iran sanctions in the past, with the Italian lender paying $1.3 billion to U.S. authorities to settle probes.
Standard Chartered agreed to pay $1.1 billion in 2019 to U.S. and British authorities over financial transactions that violated sanctions against Iran and other countries.
According to the FT, the Iranian state-controlled Petrochemical Commercial Company was part of a network that the United States accuses of raising hundreds of millions of dollars for the Iranian Revolutionary Guards Quds Force and of working with Russian intelligence agencies.
Both PCC and its British subsidiary PCC UK have been under U.S. sanctions since November 2018, the FT said.
One of its alleged front companies, called Pisco UK, is registered to a detached house in Surrey and used a business account with Santander UK, the FT report said.
A person with knowledge of the situation said that Santander has closed Pisco's account.
Santander declined to comment on specific client relationships.
Alicia Kearns, chair of Britain's foreign affairs committee, said she had repeatedly raised concerns about the need to shut down "cut-outs" of the Iranian Revolutionary Guard Corps operating in the UK, adding that the FT report suggested more needed to be done.
(Reporting by Jesús Aguado and Iain Withers, Additional reporting by Daphne Psaledakis in Washington; editing by Louise Heavens, Jason Neely and Emelia Sithole-Matarise)
Santander UK and Lloyds deny breaching US sanctions over links to Iranian firms
Anna Wise and August Graham, PA Business Reporters
Mon, 5 February 2024
Lloyds and Santander UK have denied breaching US sanctions after new reports claimed the banks had provided accounts to British holding companies linked to an Iran-backed petrochemicals firm.
Petrochemical Commercial Company (PCC), which is linked to the Iranian state, used a web of front companies in the UK to discreetly move money around the world, according to documents seen by the Financial Times (FT).
Lloyds and Santander UK provided bank accounts to two of those companies, the report revealed.
PCC UK has been subject to US economic sanctions since 2018. Sanctions, which can include the restriction of exports, are a tactic employed by governments to stop other countries acting aggressively or breaking international law.
PCC UK has links to Aria Associates, a company registered to a residential address on the banks of the Thames in central London.
Documents first reported by the FT and also seen by the PA news agency suggest Aria Associates had a bank account with Lloyds.
Aria Associates is not itself subject to sanctions and PCC UK is not sanctioned by the UK Government.
The business is majority-owned by Mohammad Ali Rejal, Companies House filings show.
Mr Rejal has held a senior position at PCC UK and has had communications with company officials in Iran, in emails reported by the FT and also seen by the PA news agency.
Meanwhile, Pisco UK is a company registered in Surrey which documents suggest had a Santander bank account.
The company is majority-owned by British national Abdollah Siavash Fahimi, who the FT reported is running the company on behalf of PCC.
The FT reported that Pisco UK and Aria Associates are fully owned by PCC UK, although the PA news agency was not able to independently confirm this.
A spokeswoman for Santander UK said the bank is “not in breach of US sanctions based on our investigation”.
“We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and US authorities.”
Lloyds also said it has not breached any sanctions, with a spokeswoman saying: “The group’s business activities are conducted to ensure compliance with applicable sanctions laws.
“We are committed to adhering to all legislative and regulatory requirements as they relate to economic crime. We are not permitted to comment on individual customers.
“In addition, due to legal restrictions, we cannot comment on the submission of suspicious activity reports to relevant authorities when and if they occur.”
Shares in Madrid-listed Banco Santander were down more than 4% on Monday and FTSE 100-listed Lloyds shares were down about 1%.
UK banks have provided bank accounts to holding companies linked to a state-backed Iranian petrochemicals company which has been under western sanctions since 2018, according to reports.
The Financial Times reported that both Lloyds and Santander provided accounts to British front companies owned by Petrochemical Commercial Company (PCC).
PCC is a sanctioned Iranian petrochemicals company accused by the US of helping to raise hundreds of millions of dollars for the Iranian Revolutionary Guard and of working with Russian intelligence agencies.
Both PCC and its subsidiaries have been under UK and US sanctions since 2018.
The company has continued to operate out of an office in Grosvenor Gardens by using a web of holding companies that are not sanctioned, the report suggests.
According to the FT, PCC has used these companies to receive funds from Iranian front entities in China while concealing their real ownership.
One of these companies, Pisco UK, used a business account with Santander UK. Another, called Aria Associates, has an account with Lloyds.
A Santander UK spokesperson said the bank was “unable to comment on specific client relationships” but stated the bank “abides by its legal and regulatory obligations, and we are highly focused on sanctions compliance.”
“Where we identify sanctions risks, we will investigate and take appropriate action,” they said.
A Lloyds Banking Group spokesperson said: “The group’s business activities are conducted to ensure compliance with applicable sanctions laws. We are committed to adhering to all legislative and regulatory requirements as they relate to economic crime.”
“We are not permitted to comment on individual customers. In addition, due to legal restrictions, we cannot comment on the submission of suspicious activity reports to relevant authorities when and if they occur,” they continued.
The revelations come as tensions continue to rise between the west and Iran. The US carried out further airstrikes against the Iranian-backed Houthis on Sunday.
The UK government has been approached for comment.
Santander, Lloyds' shares hit by report Iran used accounts to evade sanctions
Mon, 5 February
By Jesús Aguado and Iain Withers
MADRID/LONDON (Reuters) -Santander and Lloyds shares fell on Monday after the Financial Times (FT) newspaper reported that Iran used accounts held at the banks in the United Kingdom to covertly move money around the world in a sanctions-evasion scheme backed by Iran's intelligence services.
Lloyds and Santander UK provided accounts to British front companies allegedly secretly owned by a sanctioned Iranian petrochemicals company based in London, the FT reported citing documents the newspaper had obtained.
Shares in Madrid-based parent Santander fell as much as 6.1% and were down 4.9% at 1503 GMT, wiping off around 3 billion euros in value from the euro zone's second biggest lender by market capitalisation, according to data from LSEG, while shares in Lloyds declined 0.5%.
Santander shares rose more than 6% last week following 2023 earnings that beat forecasts.
"The market must be realising that they may be fined," said Nuria Alvarez, an analyst at Madrid-based broker Renta 4.
Santander and Lloyds said in separate statements that they believed they were not in breach of sanctions, based on their own investigations.
"We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and U.S. authorities," a Santander spokesperson said.
A Lloyds spokesperson said the group was committed to adhering to economic crime laws and regulations, adding it could not comment on individual customers.
British regulator the Financial Conduct Authority said it was in contact with the banks and with the UK's Office of Financial Sanctions Implementation (OFSI).
The U.S. Treasury Department and Britain's foreign ministry did not immediately reply to requests for comment.
European lenders, such as Unicredit and Standard Chartered, have been hit with large penalties over Iran sanctions in the past, with the Italian lender paying $1.3 billion to U.S. authorities to settle probes.
Standard Chartered agreed to pay $1.1 billion in 2019 to U.S. and British authorities over financial transactions that violated sanctions against Iran and other countries.
According to the FT, the Iranian state-controlled Petrochemical Commercial Company was part of a network that the United States accuses of raising hundreds of millions of dollars for the Iranian Revolutionary Guards Quds Force and of working with Russian intelligence agencies.
Both PCC and its British subsidiary PCC UK have been under U.S. sanctions since November 2018, the FT said.
One of its alleged front companies, called Pisco UK, is registered to a detached house in Surrey and used a business account with Santander UK, the FT report said.
A person with knowledge of the situation said that Santander has closed Pisco's account.
Santander declined to comment on specific client relationships.
Alicia Kearns, chair of Britain's foreign affairs committee, said she had repeatedly raised concerns about the need to shut down "cut-outs" of the Iranian Revolutionary Guard Corps operating in the UK, adding that the FT report suggested more needed to be done.
(Reporting by Jesús Aguado and Iain Withers, Additional reporting by Daphne Psaledakis in Washington; editing by Louise Heavens, Jason Neely and Emelia Sithole-Matarise)
Santander UK and Lloyds deny breaching US sanctions over links to Iranian firms
Anna Wise and August Graham, PA Business Reporters
Mon, 5 February 2024
Lloyds and Santander UK have denied breaching US sanctions after new reports claimed the banks had provided accounts to British holding companies linked to an Iran-backed petrochemicals firm.
Petrochemical Commercial Company (PCC), which is linked to the Iranian state, used a web of front companies in the UK to discreetly move money around the world, according to documents seen by the Financial Times (FT).
Lloyds and Santander UK provided bank accounts to two of those companies, the report revealed.
PCC UK has been subject to US economic sanctions since 2018. Sanctions, which can include the restriction of exports, are a tactic employed by governments to stop other countries acting aggressively or breaking international law.
PCC UK has links to Aria Associates, a company registered to a residential address on the banks of the Thames in central London.
Documents first reported by the FT and also seen by the PA news agency suggest Aria Associates had a bank account with Lloyds.
Aria Associates is not itself subject to sanctions and PCC UK is not sanctioned by the UK Government.
The business is majority-owned by Mohammad Ali Rejal, Companies House filings show.
Mr Rejal has held a senior position at PCC UK and has had communications with company officials in Iran, in emails reported by the FT and also seen by the PA news agency.
Meanwhile, Pisco UK is a company registered in Surrey which documents suggest had a Santander bank account.
The company is majority-owned by British national Abdollah Siavash Fahimi, who the FT reported is running the company on behalf of PCC.
The FT reported that Pisco UK and Aria Associates are fully owned by PCC UK, although the PA news agency was not able to independently confirm this.
A spokeswoman for Santander UK said the bank is “not in breach of US sanctions based on our investigation”.
“We have policies and procedures in place to ensure we comply with sanctions requirements and will continue to engage proactively with relevant UK and US authorities.”
Lloyds also said it has not breached any sanctions, with a spokeswoman saying: “The group’s business activities are conducted to ensure compliance with applicable sanctions laws.
“We are committed to adhering to all legislative and regulatory requirements as they relate to economic crime. We are not permitted to comment on individual customers.
“In addition, due to legal restrictions, we cannot comment on the submission of suspicious activity reports to relevant authorities when and if they occur.”
Shares in Madrid-listed Banco Santander were down more than 4% on Monday and FTSE 100-listed Lloyds shares were down about 1%.
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