Apparently, this has happened:
The Ummah Welfare Trust (UWT) is dismayed by receiving a 30 day notice from Barclays to close their bank account. The trust has been banking with Barclays since its inception in 2001 in order to carry out relief operations in over twenty countries across Africa, Asia, Europe and the Middle East providing support to over a million people.
Barclays Bank has given no apparent reason to why the notice has been served. UWT Director of Operations Mohammed Ahmed said in a statement, “We are deeply concerned with Barclays Bank’s decision to close our accounts without any justification. This decision will not only affect the great work carried out by UWT but will affect millions of people who rely on UWT. This decision sets a dangerous precedent of disrupting British charities without any substance, especially as INTERPAL is in the process of having its bank accounts closed by Lloyds TSB. Targeting charities in this way shows there is a conceited attempt to stop the good work in politically-sensitive regions by leading British Muslim charities.
UWT is calling on all supporters and friends to urge Barclays Bank to review its decision so UWT can continue its humanitarian projects across the world without any disruption. UWT would like to reassure its supporters this is a decision of a bank and does not reflect the view of the Charity Commission.
Now, the Ummah Welfare Trust had a little run in with the Charities Commission and the West Yorkshire Police – but that was back in 2003.
A Bradford charity is being investigated for allegedly bankrolling Kashmiri guerrilla fighters with huge amounts of cash collected for relief projects.
The Ummah Welfare Trust, which is run from small offices in Manningham, appeals for donations for Muslim good causes around the world such as providing fresh water and medicine, sponsoring orphans and building mosques.
But, after growing concern about its activities, the Charity Commission has frozen its bank accounts and tipped off detectives who have arrested six men linked to the group.
The commission started an inquiry after becoming concerned that money was not actually reaching the projects the charity claims to support.
It is understood that one of the watchdog’s inquiries is that cash had instead been directed to armed Kashmiri guerrillas who are in a bitter fight to wrestle parts of the disputed province, which lies between India and Pakistan, from Indian control.
A commission spokesman confirmed it is investigating the group – also known as the Amanat Charity Trust – and said it was “looking at the ways in which the charity’s funds have been applied”.
He added: “The Commission made a formal complaint to the police – we have a duty to report to the police instances when we consider crimes may have been committed.”
It is believed Special Branch officers were originally called in to investigate the claims but that the inquiry has since been passed to West Yorkshire Police’s fraud squad.
While senior officers refused to release precise details, they confirmed that six men linked to the charity had been arrested and questioned.
They said it followed allegations of fraud involving a “substantial amount of money”.
On its website, the trust states it aims to “respond to the aid of the poor and destitute Muslims across the world”.
The website contains a direct appeal for people to donate money and lists a series of welfare activities supported by its own volunteers such as providing fresh water and medicine, reconstructing mosques and sponsoring orphans.
The trust’s head office is based in a small property off White Abbey Road, but it also has branches in Bolton and Leicester. It has four directors.
A West Yorkshire Police spokesman said: “Six men have been arrested at a premises in the Manningham area in connection with alleged fraud offences.
“All of them have been released on police bail pending further inquiries.”
It is believed that two of those arrested were from Bradford, two were from Oldham and another two from Bolton.
The Charity Commission said the inquiry was opened in December last year when it froze the group’s bank accounts because it felt funds were at risk.
It said its aim was not to close charities down but to help introduce measures to ensure money was properly distributed.
While the group’s most recent accounts state an annual income of £242,000, it is understood the amount involved in the fraud could total as much as £2 million.
When contacted by the Telegraph & Argus, the charity declined to comment about the investigation.
I assume that nothing came of that investigation, because I can find nothing else about it online.
Banks are subject to the Proceeds of Crime Act 2002, section 330 of which requires that they make a report to the Serious and Organised Crime Agency reasonable grounds for knowing or suspecting that a person in involved in money laundering. “Reasonable grounds for suspecting” is an objective test. It does not require actual suspicion: just that the reasonable grounds exist.
Moreover, the definition of money laundering is very wide indeed. It turns on the definition of “criminal conduct”:
(2) Criminal conduct is conduct which—
(a) constitutes an offence in any part of the United Kingdom, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there.
(3) Property is criminal property if—
(a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.
(4) It is immaterial—
(a) who carried out the conduct;
(b) who benefited from it;
(c) whether the conduct occurred before or after the passing of this Act.
SOCA may well allow a financial institution to proceed, so as to allow investigations to continue, unhindered, where they believe that money laundering is taking place. If SOCA don’t give the bank the go ahead, they must stop dealing with the customer, or risk prosecution for engaging in money laundering activities.
International banks are subject to similar legal risk in other parts of the world.
This is just speculation. The 2003 arrests might well have resulted in a refusal by SOCA to allow the bank to proceed; but that was five years ago.
I would very much like to know what is going on. Banks rarely turn away business unless they feel as if they have no choice. I expect we will hear something from Barclays about this.
No flippant comments please. If you have genuine insight into this business, please let us know.
Unseen, in the comments below says:
UWT are a donor to Interpal – see their accounts to track their grants.
That is a possible explanation
For more on the Charities Commission, see here.