By Tim Worstall From Forbes

HSBC has closed the UK bank accounts of a series of Muslim organisations and those associated with them. This is causing some uproar as they’ve not explained very well why they’ve done this. It is more likely than not that this is a result of some discreet pressure from the American authorities (or the possibility of it in the future) as happened a few years back with the charity Interpal.

The news itself:

Anas Altikriti, chief executive of the think tank the Cordoba Foundation, said he had met with a “wall of silence” from HSBC over its decision to close his account and those of his wife and two sons aged 16 and 12 years old.

The Cordoba Foundation, along with Finsbury Park Mosque in north London and the Ummah Welfare Trust (UWT) have also been told their accounts are to be closed by the bank.

And what would such a story be without Giles Fraser managing to get the wrong end of the stick?

Even weirder is a similar letter from HSBC that was sent to Anas Al Tikriti, who runs an Islamic thinktank. This time no explanation whatsoever was given. His wife and two sons – one aged 16, one aged 12 – got a letter too. Whatever the youngest Mr Tikriti has been spending his pocket money on, it’s hard to believe that a small boy falls outside the “risk appetite” of Europe’s largest bank. And especially a bank that was, until recently, perfectly happy with the business of Mexican drug cartels, allowing them to launder their money through HSBC accounts in the Cayman Islands. Not only that, but the same US Senate committee that fined HSBC $1.9bn in 2012, also questioned the bank’s dodgy links with financial institutions in Saudi Arabia that, they believed, were responsible for funding terrorism.

Being fined $1.9 billion is likely to change your desired risk profile. Indeed, that’s rather the point of the $1.9 billion fine we might think.

As far as anyone knows these various organisations are not on any proscribed list. Also as far as anyone knows they’re close to the edge of what might get them there (this is a matter of opinion of course). And this all reminds me of the Interpal case five or six years ago. A similar sort of charity, non-political, claiming to be simply a charity aiding those in Gaza and Palestine who needed aiding, found that Lloyds Bank closed their account and that other banks were extremely reluctant indeed to open another one. No one has officially found them doing anything wrong under UK law so that all seems a little odd. Yet as the BNP Paribas case shows, the US does like to use its power over the US banking system to extend the reach of US law and policy. And that’s what happened with Interpal. The US had it on a list of organisations that must not be dealt with. And that shouldn’t affect Lloyds in the UK, dealing with an organisation legal under UK law. But Lloyds has a US banking licence, a US banking licence that they’d rather like to keep. In order to keep that they needed to buckle under to US law about who a bank may or may not deal with.

We’ve absolutely no information at all that any of these newly unbanked organisations are proscribed by the US. But they are all fairly radically minded Islamic organisations and they’re perhaps the sort that a bank that’s just been fined $1.9 billion might prefer not to offer services to. And at heart I’m sure this is much more to do with the US than it is to anything domestic in the UK. Just as it was with Interpal. After all, even the smallest risk of being fined for offering services to someone the US would rather you didn’t could be much larger than any revenue that’s going to come from a handful of small charities and those involved with them.

For more on this story go to: http://www.forbes.com/sites/timworstall/2014/07/31/hsbc-closes-bank-accounts-of-muslim-organisations/

IMAGE: www.young-enterprise.org.uk