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Banks are Targeting British Muslim Organizations

Banks including HSBC have shut down the accounts of a number of Muslim charities and non-profits based on vague "risk-assessments."

by Hussein Kesvani
Aug 4 2014, 3:31pm

Anas Altikriti

This article originally appeared on VICE UK.

Waking up to your bank deleting you and your business from their systems isn’t a great way to start the day. Nobody knows this better than Anas Altikriti — a prominent activist, pro-Palestine campaigner and chief executive of the Cordoba Foundation think tank, which fosters relations between the West and "the Muslim world" — whose company and entire family received identical letters last week notifying them of HSBC’s plans to shut down their accounts. Despite the 45-year-old being a customer with the bank for decades, when he attempted to challenge their decision he was told he shouldn’t try to re-open any accounts with HSBC or its affiliates.

The Cordoba Foundation wasn’t the only organization to face such sudden account closures; other British Muslim organizations, including the Ummah Welfare Trust (UWT) and the Finsbury Park Mosque, received similar letters, stating that services could no longer be provided because they fell out of the bank’s “risk appetite.”

Considering the one thing all these organizations have in common is the fact they’re associated with the Islam faith — and apparently present some vague level of risk — it’s understandable why people assumed the closures had something to do with religion. However, in a statement, HSBC said the account terminations were “absolutely not based on race or religion,” adding that “discrimination against customers on grounds of race or religion is immoral, unacceptable and illegal.”

After reaching out to HSBC, neither I nor Anas have received any detailed answers as to why the accounts were closed; just responses that repeated the “risk appetite” line. This phrase seems to have been mostly ignored by other outlets covering the story, not least because “it’s a bit of a nonsense term,” according to Tom Keatingue, a finance and security analyst, and Associate Fellow of the Royal United Services Institute (RUSI).

Tom explained that assessing risk was a standard procedure conducted by most banks, in which they assess a trade-off between the dangers and projected “rewards” offered by a client’s business. But while large commercial accounts usually produce high rewards, in which taking risks is worth the hassle of extensive monitoring costs, general accounts such as Altikriti’s — or those of other small NGOs — tend to be loss-making, which might go some way towards explaining the "risk appetite" explanation.

However, according to an HSBC associate I spoke to who specializes in risk assessment and wished to remain anonymous, “Most charities tend to fall out of the perimeter of risk consideration, considering that the size of donations and transactions being authorized from the accounts are small anyway. If HSBC or other banks really are monitoring charities, it’s a fairly new phenomenon, and it’d be interesting to know what standards they’re using to make the assessment.”

Letters sent to Anas and his family (Photo courtesy of Anas Altikriti)

So what’s so risky about these Muslim organizations? Keatingue suggests that the worries the bank have might derive from anti-terror legislation, which was highlighted in a report titled “Risk of Terrorist Abuse in Non-Profit Organizations” last month, and by comments earlier this year from the chairman of the Charity Commission William Shawcross, who claimed that Islamic extremism is the "most deadly" problem charities face. The statements came as the Charity Commission filed 20 statutory inquiries into the activity of charities operating in the UK, five of which were identified as “Islamic.”

While this might seem like a disproportionate number, representatives of Muslim organizations said it provides little evidence to implicate them as guilty – and there's certainly no evidence to suggest that Anas, the Cordoba Foundation, UWT or the Finsbury Park Mosque are laundering money for extremists, or engaging in any other activity the anti-terror police would have a problem with.

Abdurahman Sharif, operations manager at the Muslim Charities Forum (MCF), told me that because of the locations many Muslim charities are operating in – such as Syria, Iraq and Palestine – there’s naturally more scope for caution, particularly as events in the region become increasingly worse. He also warned that the closure of Islamic charity bank accounts would set a precedent in which similar organizations would be stopped from providing essential services to areas affected by war and poverty.

“There is a strong fear that these closures will trigger further closures, and that in the near future no Islamic faith-based charities will have access to banking services in the United Kingdom,” he said.

Abdurahman noted that this wasn’t the first time a string of charitable organizations were affected by risk-driven closures. Last year, the accounts of around 250 money transfer (MTO) services — many with “Islamic” associations, according to Abdurahman — that help others provide aid to Somali communities from overseas were closed down by Barclays bank.

Barclays chief executive Anthony Jenkins explained the move by claiming that the MTO “sector [was] at particular risk of being used for the transmission of the proceeds of crime, for money laundering and for terrorist financing”. The decision worried activists, who feared that Somalis who relied on the transfers would be left with no financial support, and even caused Oxfam’s chief executive Mark Goldring to slam the UK’s banking regulation rules as “illogical, cold hearted and counter-productive."

Former Guantanamo Bay inmate Moazzam Begg (Photo via)

In early July, Barclays also froze a bank account belonging to CAGE, a human rights NGO whose aim is to “raise awareness of the plight of prisoners at Guantanamo Bay and other detainees as part of the War on Terror.” The organization, which runs on a shoestring budget consisting of individual donations and small grants provided by the Joseph Rowntree Charitable Trust (JRCT), said the decision had a “huge impact” on their work.

CAGE’s troubles began in February, when its outreach director, Moazzam Begg — a former Guantanamo detainee — was arrested on suspicion of terrorist activity in Syria. Almost immediately after the arrest, the organization had its phone services cut off and its larger donations dried up entirely, while the Charity Commission launched investigations into the JCRT and CAGE’s second provider, The Roddick Foundation.

While there is still absolutely no proof that CAGE is a front for laundering jihadi money, the organization remains in limbo, living off what remaining funds it has at its disposal. “Not having a bank account meant that existing standing orders were automatically cancelled. We couldn’t solicit any donations – it was basically our lifeline cut off,” said CAGE press officer Amandla Thomas-Johnson. The bank’s decision to close the account also affected their efforts to seek business elsewhere, said Amandla, on the grounds that they were “too risky.”

Representatives from other Muslim organizations I spoke to, who didn’t want to be named for security reasons, told me they had been threatened by their banks and asked to explain specific transactions “for no reason at all.” According to one organization head, who works as an unpaid volunteer, this kind of interrogation “creates a culture of fear in which one is guilty until proven innocent.”

If indeed it is the terror aspect influencing the “risk appetite” line, it sets a worrying precedent for the future of charitable organizations working in areas blighted by religious extremism. Because while the government steps up its efforts to quell domestic terror threats, they also remain dependent on specialist charities and NGOs to deliver humanitarian aid abroad in efficient, targeted ways. And if those charities have their accounts terminated and their assets frozen, thousands — both at home and overseas — will be left without the help they need.

Is the DOJ Forcing Banks to Terminate the Accounts of Porn Stars? Read more here.

Follow Hussein Kesvani on Twitter: @HKesvani