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NCVO to meet banks over closure of Muslim charities' accounts

NCVO to meet banks over closure of Muslim charities' accounts

Categories: Latest News

Tuesday August 19 2014

Civil Society Media and the voluntary sector publication, Third Sector, both report that the chief executive of NCVO, Sir Stuart Etherington, it to organise a meeting with banks following the closure of a number of accounts held by British Muslim charities.

Similar to the efforts initiated by Sir Stephen Bubb, the head of the charity chief executives body ACEVO, Sir Stuart met with representatives from Muslim charities including Muslim Aid, Muslim Hands and the Muslim Charities Forum last Wednesday.

The meeting follows the unexpected closure of a number of bank accounts of Muslim charities. The Ummah Welfare Trust, Finsbury Park Mosque, and The Cordoba Foundation were all served notices by HSBC informing that their accounts would be closed because the bank no longer felt the client met its “risk appetite”.

NCVO now plans to arrange a meeting with banks to discuss the problems that have led to the account closures.

The policy manager at NCVO, Elizabeth Chamberlain, acknowledged that banks face challenges with some charities that operate overseas due to “the requirements of tight regulations designed to avoid money laundering, along with the additional risk generated consequent to growing Middle East conflicts.”

She added “We understand banks may sometimes find it simpler to end relationships with customers rather than carry out the complex compliance work required to satisfy themselves that their risks are a satisfactory level.

“However, we hope that by getting banks and charities together, we can work towards solutions that go as far as possible to minimise the likelihood of consequences for charities.”

Third Sector further notes that the Charity Finance Group (CFG) has obtained anecdotal evidence suggesting that banks’ de-risking activities has made it difficult for charities to send funds to areas affected by conflict.

Indeed, the CFG submitted a response to the parliamentary Home Affairs Select Committee consultation in September 2013 in which it acknowledged that: “charities are finding it increasingly challenging to send money to certain countries through formal banking channels. This problem has been particularly acute amongst Muslim charities, who have more frequently reported having bank accounts closed or donations blocked.”

It observes that charities experience problems in particular with: delayed payments, transferring funds to sanctioned or high risk countries, opening and keeping open bank accounts, and receiving funds from certain regions. The CFG argue that these problems directly impact upon the ability of charities to carry out humanitarian work.

The submission by the CFG to the Home Affairs select committee inquiry into counter-terrorism stated:

“[I]f charities are unable to use formal banking channels they will increasingly turn to untraceable, informal means to transfer funds (e.g. by transferring large amounts of cash over borders) – making them more vulnerable to abuse by terrorists. Additionally, by providing humanitarian aid and help with infrastructure building, charities have a key role in contributing to the stability of a region and thus preventing the growth and spread of terrorism abroad.”

The Home Affairs select committee notes this point with a recommendation calling on the Government’s Independent Reviewer of Terrorism Legislation, David Anderson QC, to look into this area following “a UN recommendation that more work needed to be done to reconcile counter-terrorism measures and humanitarian effort.”

Muslim charity executives have also expressed concerns over the Charity Commission’s approach to statutory inquiries and the naming of charities under investigation. In meetings with the ACEVO as well as in a letter to The Times, charity executives highlighted that the approach could negatively impact on a Muslim charity’s reputation before any guilt or misdemeanour had been proven.

In June, the Charity Commission disclosed that it was investigating Muslim Aid among several other charities; Al Fatiha Global, the Islamic Education and Research Academy and Children in Deen.

A spokesman for the NCVO, said that Sir Stuart is expected to address the issue of statutory inquiries saying “We are interested in the time that inquiries are taking and we’re raising that with the Commission. We think announcing the start of an investigation is welcome as it shows that the Commission is being an active regulator. It will help sustain public confidence in charities if it’s clear that they are well regulated.

He added “However in the interests of fairness to the charity under investigation, it is crucial that investigations are conducted as speedily as possible. We would like the commission to publish regular indicators of how long its investigations are taking.”

The Muslim Charities Forum meanwhile is calling for the Charity Commission to offer more detailed information on why certain Muslim charities have been singled out for investigation.


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