UK banks have provided services to holding companies associated with a state-backed Iranian petrochemicals company that has been under western sanctions since 2018, in a scheme backed by Tehran’s intelligence services.

The Financial Times (FT) has seen a document that shows Lloyds and Santander UK provided accounts to the British front companies owned by Petrochemical Commercial Company (PCC).

PCC was sanctioned by the US in 2018 following accusations that it provided hundreds of millions of dollars in funding to the Iranian Revolutionary Guard and that it has worked with Russian intelligence services. The British subsidiary PCC UK was also under the same sanctions.

However, PCC UK has continued to operate from an office in Belgravia, using an intricate web of front entities in Britain and other countries, according to documents, emails and accounting records seen by the FT.

The documents also show that PCC has received funds from Iranian front entities in China through its companies in the UK since the imposition of sanctions, while concealing their real ownership through “trustee agreements” and nominee directors. One of the companies, called Pisco UK, is registered to a detached house in Surrey and used a business account with Santander UK. Another front company, Aria Associates, has an account with Lloyds.

A spokesperson from Santander said they were “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”.

Lloyds Banking group told the FT that it could not comment on individual customers but complied with sanctions laws, adding: “In addition, due to legal restrictions, we cannot comment on the submission of suspicious activity reports to relevant authorities when and if they occur.”

The report comes as conflict in the Middle East intensifies after the US carried out further strikes against Iranian- backed Houthis on Sunday.