EDINBURGH — Groups based in the United Kingdom which support human rights causes in the Occupied Palestinian Territories have expressed fears that U.S. hedge funds pressured a major bank into closing their accounts.
The Scottish Palestine Solidarity Campaign, which campaigns for Palestinian rights while opposing Israel’s occupation of disputed lands and violations of international law, is the latest pro-Palestine group in Britain to an account closure notification from the Co-operative Bank. At least 20 other NGOs have suffered a similar fate since shares in the Co-op Bank were sold to U.S. investors in 2013.
Mick Napier, SPSC’s treasurer, told MintPress News that the closure of the account will be “very disruptive and costly,” and claims the move by the bank is politically motivated and could be a result of pressure from U.S. investors.
Since receiving notice of the impending closure on Nov. 10, the organization has protested outside Co-op Bank branches and called for people in Britain to close their accounts if the bank does not reverse its decision.
The NGO’s bank account is due to be closed next month. (The bank initially set to close the account on Jan. 14, but the NGO has since negotiated a one-month extension.)
Napier described the account closure as an attack on free speech, and said
the closure would badly affect the SPSC’s work because its only revenue stream is donations from the public. He added:
“Disrupting receipt of these donations will impede our work, even as arms flow unimpeded from Scotland to the Israeli army to commit what Amnesty [International] and others describe as crimes against humanity.”
A change in ‘risk appetite’
In a letter to the SPSC seen by MintPress, the Co-op Bank said it was changing its “risk appetite” which “determines if we are able to provide customers with banking services.”
The letter continued: “Unfortunately, your account (s) no longer fits within our risk appetite and we are no longer able to provide you with banking services”
In response to the SPSC’s claims, a spokesman for the bank told MintPress that the decision to close the account was neither politically motivated nor a statement about the causes the NGO supports.
He continued: “We remain a committed supporter of charities which can meet the industry-level requirements.”
“However, in common with all banks, we have to perform due diligence on our customers, their accounts and the payments they make to ensure the bank complies with anti-money laundering obligations and to manage the bank’s risk.”
Likewise, in a statement to MintPress, the Co-op Bank said that for customers who operate in, or send money to high-risk locations throughout the world, advanced due diligence checks are required by all banks to ensure that funds do not inadvertently fund illegal or other proscribed activities.
The bank’s statement continued: “Depending on the particular circumstances it may not be possible for us to complete these checks to our satisfaction and the decision to close a number of accounts, including the PSC and some of its affiliates, is an inevitable result of this process.”
The Co-op Bank added that after extensive research, the charities and groups involved did not meet its requirements or allow the bank to fulfil its obligations.
The spokesman further noted that the move is “part of our normal banking processes and is an area where the bank has made some changes recently to bring it into line with the industry generally.”
He added that banks in the U.K. are regulated by the Financial Conduct Authority, Prudential Regulatory Authority and various pieces of banking legislation, but he declined to be more specific regarding the bank’s legal obligations and recent change of policy.
When asked about the SPSC’s claim that U.S. investors were influencing its policy, the spokesman replied: “This decision is about adhering to our obligations under the law and not about arbitrary decisions or any form of discrimination or inequality.”
“The primary reason for not being more specific at this stage is because of client confidentiality.”
SPSC is not alone
The SPSC is the latest U.K.-based pro-Palestine organization to receive notice that their Co-op Bank accounts would be closed.
Friends of Al-Aqsa and other Palestinian-affiliated groups — including the Palestine Solidarity Campaign based in England — also received letters recently from the Co-op Bank advising that their banking facilities would end.
The bank also closed the Cuba Solidarity Campaign’s account, and closed or denied the accounts of another 20 organizations that support Palestinians, including PSC branches in Abergavenny, Bristol, Cambridge, Norwich, Nottingham, Oxford, Plymouth, Sheffield, West Midlands and York.
In October, the PSC launched a legal case against the Co-op Bank after its account was closed.
PSC said that the bank’s decision was discriminatory and contravened sections 13 and 29 of the Equality Act 2010.
Ismail Patel, founder and chairman of Friends of Al-Aqsa, told MintPress: “Friends of Al-Aqsa (FOA) discovered whilst trying to making a transaction on 15 December 2015 that the Co-operative Bank had taken the unilateral decision to close FOA’s bank account.”
Noting that no consultation or notice preceded the decision, Patel continued: “The only reasons provided by the bank for the closure is a change in its ‘risk appetite.’”
“They have since than given FOA an extension to 23 February  before closing the account.”
“We will ensure that we pursue every legal, social and political avenue to put pressure on the Co-op to re-open our account.”
Save Our Bank forms in the wake of US hedge fund involvement
Elsewhere, there’s been growing concern that the Co-op Bank’s much vaunted ethical policy has been diluted since most shares were sold off to private shareholders in November 2013.
At that time, a group of disparate hedge funds took control of 35 percent of the Co-op Bank.
The 12 funds injected $88 million of fresh capital as part of a deal that saw the Co-operative Group lose majority control of the bank.
The investors included Silver Point, based in Greenwich, Connecticut, and Monarch Alternative Capital, a fund headquartered in New York. (Silver Point and Perry Capital declined to comment for this article.)
In May 2014, the Co-op said it had secured another $674 million in investment to bolster its capital and that two hedge funds — Silver Point and Perry Capital — had been granted the right to nominate a director to the board of the bank.
Announcing that investment, Co-op Bank Chief Executive Niall Booker said the bank’s ethical focus would not wane, which includes commitments such as not lending to weapons makers.
“Values and ethics remain at the heart of the bank’s business, as evidenced by the fact they are embedded in the bank’s articles of association, and this is supported by our shareholders who recognise the importance of this to the future of the bank and its customers,” he added.
But following the shares sell-off, a group called Save Our Bank was formed by some of the bank’s customers with a view to ensuring the Co-op Bank retained “its world-leading ethical policy.”
A statement on SOB’s website says: “We fear that the bank will lose more than it saves because of the impact on its reputation as an ethical bank.”
The group has called on the bank to: “Remember its proud tradition of supporting human rights campaigners and to help legitimate support groups to meet the bank’s obligations instead of just closing accounts.”
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This BBSNews article originally appeared on MintPress News.