Iran Reportedly Used UK Banks to Evade U.S. Sanctions

Latest Developments

Iran used two banks in the United Kingdom to evade U.S. sanctions via front companies secretly owned by Iran’s Petrochemical Commercial Company (PCC), the Financial Times reported on February 4. The report claims that PCC’s UK division (PCC UK) owns front companies called Pisco UK and Aria Associates that utilized accounts in the two banks, Lloyds and Santander UK, to launder money on behalf of Iran’s Ministry of Defence and Armed Forces Logistics (MODAFL). The United States sanctioned PCC in 2018, but the UK has not followed suit. Lloyds and Santander have denied breaching U.S. sanctions but refrained from further commenting on the matter. Petrochemical products are Iran’s second-largest exports category.

Expert Analysis

“Despite touting self-sufficiency and hailing an eastward economic outlook, Iran continues to prove that it has both the capability and the intent to take advantage of Western financial institutions to launder money and generate profits from the sale of petrochemical products. The use of front companies and illicit networks tied to the worst of the worst elements in the Islamic Republic should be a wake-up call for Britain to bridge the transatlantic sanctions gap and target all MODAFL affiliates already subject to U.S. sanctions.” — Behnam Ben Taleblu, FDD Senior Fellow

“Tehran has a well-documented history of effectively utilizing front companies in Western countries to circumvent sanctions, engage in money laundering, and acquire materials and technology with dual-use applications. The achievements of Tehran in this regard owe much to the support of opportunistic individuals and entities in the West. The remedy to this situation lies in substantially raising the consequences associated with collaborating with the regime in Iran. This will ultimately alter the cost-benefit calculations for those considering involvement in such activities.” — Saeed Ghasseminejad, FDD Senior Iran and Financial Economics Advisor

“Iran is increasingly exploiting British resources, such as banks, universities, and local governments, to advance its own interests. The exploitation of such loopholes underscores the need for further transatlantic cooperation.” — Janatan Sayeh, FDD Research Analyst

Iran’s Exploitation of UK Resources

The revelations in the Financial Times come a week after the United States and Britain announced joint sanctions against an Iranian transnational assassination network. Reports from 2023 also indicate an increase in malign Iranian activities in the UK. According to an investigation conducted by the Jewish Chronicle, scientists in at least 11 British universities produced studies that could facilitate Iran’s ability to develop technology for its drone program and fighter jets. In late 2023, the UK-based newspaper The Times reported on Iranian links to a mosque that received some £200,000 from the Scottish government.

Related Analysis

“Bipartisan Coalitions Urge Biden to Resume Enforcement of Iran Oil Sanctions,” by Saeed Ghasseminejad

“Iran Continues to Benefit from Mideast War,” FDD Flash Brief

“Congress Should Take Away Iran’s $10 Billion Sanctions Relief,” FDD Policy Brief