UK bank accounts held by Muslim organisations risk closure

2014-08-11 06:18:00 | Al Muslim News
UK bank accounts held by Muslim organisations risk closure

 

An increasing number of Muslim NGOs are likely to suffer the same fate as three groups that were told their bank accounts are to close because they are too risky, a finance and security expert has warned. Finsbury Park mosque in north London, international development charity the Ummah Welfare Trust (UWT) and the Cordoba Foundation thinktank received identical letters from HSBC dated 22 July giving them two months notice because their accounts fell “outside of our risk appetite”, prompting allegations of Islamophobia, strenuously denied by the bank, and calls for a boycott. The bank has refused to expand on the reasons for the closures but Tom Keatinge, associate fellow of the Royal United Services Institute, said that the sector had been forced to take a cautious approach because of stringent money laundering and counter-terrorism legislation, with the effect that some organisations were treated as guilty unless proven innocent. “Do you bother to look at these organisations in detail to see if they are credible? Do you spend time doing your research? Or do you say: ‘Time’s too short and the returns are too small so we will exercise our right to close the account’,” he said. “It’s just not worth it, it boils down to a risk/reward decision. “The result of these decisions [by HSBC] might look like Islamophobia but I am certain no UK bank is actively going to close out Islamic charities. They made decisions that predominately affects Muslim charities given the regions they operate in.” Both UWT and the Cordoba Foundation suggested HSBC’s decision was down to their support for Gaza. HSBC, which paid $1.9bn (£1.2bn) in 2012 to settle allegations it allowed Mexican drug-traffickers to move money around the financial system, is not the first bank to close accounts of organisations largely serving Muslim communities. In 2012, UBS closed Islamic Relief’s account and UWT previously had its account shut down by Barclays in 2008. Barclays also closed more than 200 UK accounts last year held by remittance companies providing services for Somali expatriates . The Financial Action Task Force (FATF), an international body dedicated to combatting terrorist financing and money laundering among other things, says that non-profit organisations are “vulnerable for abuse by terrorists or terrorist networks”, and rates governments’ compliance with its recommendations. “Why would I provide services to NGOs when I am told by the global standard setter that they are particularly vulnerable to abuse by terrorist organisations,” said Keatinge, who worked in banking for 20 years. The independent reviewer of terrorism legislation, David Anderson, warned in a report last month of the risk that “anti-terrorism laws will be given a bad name if they result in avoidable restrictions on the ability of NGOs to conduct vital humanitarian and peacebuilding operations in parts of the world from which terrorism emanates”. He urged policymakers and NGOs to sit down together to prevent that happening. Keatinge echoed the call for talks and said introducing something akin to a Kitemark, that could be periodically awarded by the Charity Commission if certain standards were met, could offer a possible solution. He added: “Should there be more guidance, for example, saying we won’t prosecute you unless there’s explicitly information that says this charity is guilty? But that will take dialogue and there’s no sign of that happening. A government spokesman said: “It is strictly a commercial matter for a bank itself about whether or not to offer products or services to certain individuals or groups.” But he added that the government recognised the important work done by NGOs and “has an ongoing dialogue with both the banking industry and NGOs on a range of issues”..

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