The world’s most recognised bank check company has been implicated in the arbitrary closure of accounts belonging to a series of UK-registered Muslim charities and individuals after apparently being falsely smeared or associated with terrorism.
World-Check, a confidential database owned by financial information giants Thomson Reuters, is used by 49 out of the largest 50 banks to help them judge which customers to accept or retain in a background of restrictions imposed against those alleged to be financing terror or money-laundering.
One of the main culprits in closing Muslim bank accounts was HSBC but has refused to discuss or explain the reasons for its sudden decisions other than saying the clients had become “outside of our risk appetite.”
Running into a brick wall, an inquiry carried out for the BBC gained access to World-Check database denied to journalists but from one of their clients said to have “strong reservations about the software”.
The team was headed by Peter Oborne who resigned from the Daily Telegraph after the newspaper failed to publish an article about HSBC’s closure it uses. In the database it found the word “terrorism” was linked with the Cordoba Foundation, one of several Islamic institutions that had been targeted.
HSBC also acted against Anas Altikriti, the Foundation’s Chief Executive, who had banked with them ever since he had been a university student 30 years ago, as well as the personal bank account of his wife and his two teenage children.
Controversially the claim against Cordoba was sourced to the United Arab Emirates. It brands certain political opponents as terrorists, including the Muslim Brotherhood.
Other anomalies found were the action against the banking services of Finsbury Park Mosque, despite being under new management for the past decade approved by the Metropolitan Police.
Challenged about its data, World-Check insisted that it “uses only reliable and reputable public domain sources (such as official sanctions lists, law and regulatory enforcement lists, government sources and trustworthy media publications) for risk-based information or allegations about an individual or entity.”
The website contained several strong disclaimers, and stressed that the “accuracy of the information found in the underlying media sources should be verified with the profile subject before any action is taken.” Furthermore, World-Check stressed that the decision to open or close accounts lay with the banks.
HSBC also insisted that when it reviews a customer relationship it typically gathers information from a “wide range of sources and take a number of factors into consideration.” Although it said that it can’t always provide customers with specific reasons for closing an account, “any such decisions are not taken lightly and are not based on a customer’s race or religion.”
In March this year, the Overseas Development Institute (ODI) warned that a lack of guidance from the UK Government, particularly the Treasury, on how banks should respond to counter-terrorism legislation had caused millions of pounds of donation to charities to be inadvertently held, blocked or returned.
ODI, the leading think tank on development and humanitarian aid issues, suggested that “overly risk averse actions” were being taken for fear of breaching counter-terrorism laws and led to the closing and freezing of accounts with “no detailed explanation.”
Some of the sanctions against Muslim charities were also seen to coincide with Israel’s renewed killings of Palestinians in Gaza last year. HSBC closures included against Ummah Welfare Trust, which also had its accounts closed during the previous Gaza massacres in 2008, when it banked with Barclays.