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HSBC closes accounts: 2 Islamic nonprofits and 1 mosque

August 12, 2014

HSBC has closed the accounts of the Islamic charity Ummah Welfare Trust (UWT), the Finsbury Park Mosque in north London, and an Islamic advocacy group called the Cordoba Foundation. The closures are part of the British bank’s effort to improve compliance with U.S. and British regulations and after being heavily criticized and fined in 2012 for being too lax about the customers and correspondent banks it chose to do business with.

UWT’s accounts were closed by Barclays in 2009. A student group has reported that UWT has conducted projects together with the Al-Salah Islamic Association, a Hamas front. The Finsbury Park Mosque was formerly pastored by hate preacher and jihadist Abu Hamza. The Cordoba Foundation advocates for Palestinian causes, invited a guest to speak from the radical group Hizb-ut-Tahrir, and is run by a member of Britain’s Muslim Brotherhood.

Alex Brummer, city editor of the Daily Mail, offers this insightful analysis of HSBC’s move:

The notion that HSBC is closing down the bank accounts of Muslim groups and charities because of some kind of Islamophobia could not be more wide of the mark.

Britain’s biggest and most international bank is engaged in a determined effort to clean up its reputation and preserve its banking licenses in the United States after settling charges of money laundering and sanctions busting brought by the US Justice Department.

A coruscating 2012 report by the powerful Senate sub-Committee on Investigations found that HSBC had exposed the US ‘financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-laundering controls’.

The bank subsequently agreed to pay £1.12billion ($1.9billion) in fines to settle the claims and was given a five year probationary period to clean up its act.

Under the chairmanship of the redoubtable Scotsman Douglas Flint, who has been in charge of HSBC since 2010, it has rigorously sought to eliminate the risks of further money laundering charges that might put in danger its American banking licenses.

It has ruthlessly closed down branches, cancelled relationships with overseas banks and shut down the accounts of customers that might conceivably be regarded as risky because of links to money laundering, sanctions busting or potential terrorist activities.

In the troubled Middle East alone, it has doubled the number of compliance officers—internal enforcers—to 3,500 over the two years since it reached a settlement with the American authorities…

Improving the bank’s standards has been hugely expensive, with the global cost of the internal enforcement operation climbing to £296million ($500 million) a year…

Among the relationships that HSBC has severed, as it has gone about its task, is that with the Vatican Bank, recently renamed the Institute for the Works of Religion, because of its past association with money laundering. Such a move involving a prominent Roman Catholic institution strongly suggests Muslim causes and accounts have not been singled out as HSBC seeks to rebuild its reputation in Washington…

If HSBC could be accused of anything it is of being over-cautious in its dealings with the authorities and its elimination of potentially risky clients.

Thanks to Rushette for sending in the news.

One comment

  1. […] by the decision of HSBC to close the accounts of clients who may be at risk of laundering money, evading sanctions, […]



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