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 .
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