Lloyd’s faces US probe into Iranian deals
A POWERFUL New York watchdog has stepped up its probe into London’s venerable insurance market amid allegations it breached US sanctions by insuring trades with Iran.
The New York State Department of Financial Services has demanded answers from Lloyd’s of London, whose imposing ‘inside-out’ headquarters is a familiar sight in the Square Mile.
In a letter sent this week, it requested fresh information about the market’s alleged links with two companies which have traded with Iran in the past.
The firms are London-listed commodities giant GlencoreXstrata and trading firm Trafigura.
Lloyd’s has already embarked on an internal probe into allegations that some of its members may have underwritten policies for shipments to Iran that violate US sanctions.
This followed a request for information sent to around 40 insurers and reinsurers by the New York regulator earlier this year. It has been investigating alleged links between non-US companies and Iran after r a crackdown by Presi- Pr dent Barack Obama. In its latest letter, the watchdog has asked for detailed information on Lloyd’s internal probe, including the number and names of managers under investigation.
The 325-year-old Lloyd’s market consists of 57 independent managing agents and 87 syndicates which are meant to ensure they are compliant with sanctions.
A focus of the New York regulator’s probe is shipments of alumina to Iran by GlencoreXstrata and Trafigura.
GlencoreXstrata had a ‘ barter’ deal with the Iranian Aluminium Company – or Iralco - whereby it provided alumina, and received aluminium in exchange.
It transpired that Iralco was providing raw materials for the Iranian nuclear weapons programme.
GlencoreXstrata said it was unaware of this and stopped its dealings with Iralco in October, before sanctions were introduced on the firm in December.
A spokesman for Lloyd’s said: ‘Lloyd’s takes sanctions compliance very seriously and there is no evidence of any breach.’
Standard Chartered last year reached a settlement with the New York regulator for breaching US sanctions.