Santander loses 3.140 million on stock market due to Iran-linked account

Santander says it complies with international sanctions rules. The stock market fell 5% yesterday due to the risk that the case could lead to a fine.

Yesterday Santander took a major hit on the stock market due to open uncertainty after it was revealed that the Iranian regime he would use the bank to avoid international sanctions to country.

Their actions, sometimes losing to 6.12%, they ended the session with the worst value on Ibex and lost 5%. The title closed at €3.68, with a capitalization loss of EUR 3,140 million, up to 59.630 million

IN Wall Street, where Santander is listed in the form of ADRs (American Depositary Receipt), also became the subject of sales, decreasing by 5.74% at the end of the session.

He risk of financial fines and reputational They caused serious damage to the company, which had its worst day on the stock market since April last year.

Shell companies

Iran used a current account opened in Santander, UK, UK branch of the group, to move money around the world, as published yesterday Financial Times.

Santander UK, along with Lloyds, would provide bank accounts to shell companies in the United Kingdom, which is in fact belonged to the Petrochemical Commercial Company (PCC), property of the Iranian state.

PCC and its British branch were has been under US sanctions since 2018, which accuses them of being part of a network that raises money for the Islamic Revolutionary Guard Corps’ Quds Force and that works with Russian intelligence agencies to obtain funds for Iranian militias.

Compliance with standard

In this regard, Santander’s official sources said yesterday that the bank had not violated the requirements. US regulations on sanctions imposed on third parties, Based on an internal investigation conducted to date.

“The bank has policies and procedures to ensure compliance with sanctions requirements. Santander will continue to actively cooperate with British and American authorities” – he remarked.

“Based on our investigation that we did not violate US sanctions, we have no reason to believe that We are not going to be subject to any fines or sanctions.” appreciated the essence.

Sources close to the process indicate that the operation related to the Iranian company affected only one account, which has already been cancelled. They emphasize that transfer of funds to PCC is not confirmed and that there is no official investigation currently underway.

The reason for the punishment on the trading platform was the risk that the authorities would initiate actions that could lead to economic sanctions against the bank.

Other organizations have suffered in recent years. million fines from the USA for violating sanctions against Iran.

In 2019, UniCredit paid $1.3 billion (€1.2 billion at current exchange rates) for oversight shortcomings by the Tehran regime. The Italian bank had to implement a plan to improve internal controls, which periodically He had to answer to the American authorities. In addition, UniCredit had to hire an independent expert to confirm progress.

For the same type of violations that Standard Chartered faced four years ago $1.1 billion fine (1020 million euros).

UK branch of Santander won 1.545 million euros last year.

Informed sources indicate that the operation being analyzed at Santander This is not comparable to other cases observed in the past. where a lack of controls has been discovered over the years.

Santander, like other banks, periodically discloses to the US market regulator the activities the group undertakes in connection with the sanctions.

As of September 2023 Santander UK It blocked seven accounts of five clients included in the US sanctions program.

Financial consumer through the Belgian branch, Since 2018, seven accounts have been identified. Santander Brazil, three more. The group also controls transactions with an Iranian bank.

“Santander has taken significant steps to exit the Iranian market, such as closing its representative office in Iran and cessation of all banking activities in this country, including correspondent relationships or collection of deposits from Iranian entities,” Santander states in the information filed in the United States.

British branch

A year ago, Santander UK had already agreed a fine of 107.79 million pounds (125 million euros) with the FCA, the British regulator. This was due to the disadvantages measures to prevent money laundering in the self-employed banking division between 2012 and 2017.

“Santander UK takes its responsibility to prevent financial crime very seriously,” the CEO said at the time. Mike Regnier. He took the reins of the UK business in April 2022, succeeding Nathan Bostock.

The non-executive presidency belongs to William Vereker from the end of 2020.

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