Bank withdraws facilities from Muslim charity

Bank withdraws facilities from Muslim charity


Written by: Rebecca Wood

Interpal, a London-based Muslim charity which carries out emergency relief work in Palestine, has been notified of the imminent closure of its banking facilities.

The charity claims that it has been given no explanation for the upcoming closure of its account, which has the potential to force it to cease all operations in the New Year, and has labeled the decision ‘an Islamophobic attack’ which ‘sets a dangerous precedent for discrimination’ against all British Muslims.

Since 9/11, governments around the world, under pressure from the US and UN resolutions, have brought in strict new laws to prevent the financing of terrorism. Some banks are now so fearful of government action that they react to rumours and politically-motivated attacks on Muslim charities and NGOs by withdrawing banking facilities.

Interpal, also known as the Palestinian Relief and Development Fund, has been the victim of innuendo ever since its name appeared on a US Treasury list of Specially Designated Global Terrorists in 2003. Even though powerful international interests seem intent on frustrating Interpal’s work of providing emergency relief to Palestinians, it has never been proscribed in the UK. Two previous Charity Commission investigations over allegedly supplying funds to terrorist groups have vindicated it of any wrong-doing. While a third Charity Commission investigation is ongoing, Interpal is confident that once again the charity will be found innocent of the charge of ‘indirect’ links to the military wing of Hamas, which is on the EU list of proscribed organisations.

On 12 November Interpal received notification from the Islamic Bank of Britain (IBB) that Lloyds TSB, IBB’s clearing bank, had served notice on IBB to cease all dealings with Interpal. The order, initially effective as of 8 December, has since been revised to 30 January 2009.

The notification stated that once the closure of Interpal’s bank account had come into effect, not only would all transactions into or out of its account be blocked, but also its bank, IBB, would ‘be at further risk of all its customer payments being suspended’.

In a statement Interpal said that ‘Lloyds TSB has treated IBB with contempt. Their action sends a signal to other Muslim charities – as well as the bank’s 50,000 Muslim account holders – that their accounts can be closed down without warning or explanation at any time.’

Interpal feels that ‘at a time when ties amongst communities need to be strengthened, Lloyds TSB’s action is tantamount to an Islamophobic attack on the rights of all British Muslims and sets a dangerous precedent for discrimination on [sic] all British citizens and account-holders’.

In early 2007, NatWest bank withdrew banking facilities from Interpal. This followed an unrelated action in the US courts at the time where Israeli victims of suicide bombings were suing a French bank for damages – alleging a link between a French-based Palestinian support charity and the funding of Hamas.

US charity convicted

The notification to Interpal took place a short time before a US-based Muslim charity and five of its former organisers were convicted of funding the Palestinian group Hamas in what has amounted to the largest terrorism financing trial there since September 11. Both Hamas’ political and military wings are designated as terrorist organisations in the US.

The charity, Holy Land Foundation for Relief and Development, once the largest US Muslim charity, was accused of giving more than $12 million (£8 million) to support Hamas. Holy Land has consistently countered these allegations by arguing that it ran a legitimate humanitarian operation. Its supporters have accused the US government of politicising the case as part of its ‘war on terror’.

Related links


Hungry for Justice

The Institute of Race Relations is precluded from expressing a corporate view: any opinions expressed are therefore those of the authors.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.