This week’s revelations that Iran used two of the UK’s biggest banks to evade sanctions will likely cause a shake-up of the banking system not just in Britain but possibly in allied countries like the US.
The Financial Times reported on Monday that Lloyds Bank and Santander UK provided accounts to companies with links to Iran’s intelligence services. The two lenders provided accounts to front companies that were secretly owned by a sanctioned state-controlled Iranian petrochemicals company, the paper reported.
Petrochemical Commercial Company Iran (PCC), which was sanctioned by the US, owns PCC UK and PCC China, which set up two shell companies that were allowed to open accounts with Santander UK and Lloyds. PCC UK, which is sanctioned by the US, operated out of an office in London close to Buckingham Palace.
Tom Keatinge, founding director of the Centre for Financial Crime and Security Studies (CFCS) at the RUSI think tank, said having been subjected to Western sanctions for decades, Tehran has had a long time to fine-tune techniques that involve setting up different shell companies and take advantage of sympathetic individuals who could provide necessary corporate and legal services to them to help them evade sanctions.
