Lloyds Banking Group PLC (LSE:LLOY) and Santander were used by Iran to covertly move money around the world as part of a vast sanctions-evasion scheme backed by Tehran’s intelligence services, according to a report Monday.
Lloyds and Santander UK provided accounts to British front companies secretly owned by a sanctioned Iranian petrochemicals company based near Buckingham Palace, according to documents seen by the Financial Times.
The state-controlled Petrochemical Commercial Company (PCC) was part of a network that the US accuses of raising hundreds of millions of dollars for the Iranian Revolutionary Guards Quds Force and of working with Russian intelligence agencies to raise money for Iranian proxy militias.
Documents analysed by the FT show that since being placed under US sanctions, PCC has used companies in the UK to receive funds from Iranian front entities in China while concealing their real ownership through “trustee agreements” and nominee directors.
One of these companies, called Pisco UK, is registered to a detached house in Surrey and used a business account with Santander UK.
Another PCC front company in the UK is Aria Associates, which has an account with Lloyds.
Shares in Lloyds fell 1.7% to 41.61p.