The Business and Trade Committee has launched an investigation into possible sanctions against a state-backed entity from Iran, MPs have warned.
Petrochemical Commercial Company (PCC) has reportedly been using two UK banks, Lloyds and Santander UK, to divert money across the world.
The claims are currently being addressed by MPs on the Business and Trade Committee, following a hearing on Tuesday to evaluate the Economic Crime and Corporate Transparency Act introduced by the Government last year.
Kevin Hollinrake, Under Secretary of State for Enterprise and Markets, told MPs that he was “disturbed” by the claims that PCC was using accounts at two major banks to move hundreds of millions of dollars through front companies.
Wayne Johnson, Co-Founder and CEO, Encompass Corporation, said: "Banks must be vigilant and ready to respond, as they are consistently a target for financial criminals increasingly utilising the many options of company formation to mask true beneficial ownership. This makes the challenge of identifying and verifying customers even more difficult, especially given the volume being dealt with on a daily basis.
"These ongoing developments only serve to highlight the critical importance of banks having robust Know Your Customer (KYC) systems in place to deal with the evolving risks. Here, technology is the answer and, more specifically, embracing Corporate Digital Identity (CDI) platforms. CDI provides a holistic customer risk view, combining real-time public data with private information to deliver ready-made customer profiles on demand. This is the only way to ensure a unified and transparent source of truth.
"With this, banks can be sure of true customer identity, and operate confidently when it comes to risk mitigation, continued regulatory compliance and, ultimately, making better decisions that build trust in their business."
PCC and its subsidiary PCC UK have been under US sanctions since November 2018, with the UK now investigating the entity following activity in London.
The two banks have expressed their willingness to work with authorities to combat financial crime, and both have denied breaching US sanctions.