Barclays bank rejects customers to comply with US terror law
Sean O'Neill, Crime and Security Editor The Times June 6, 2008
The bank has unilaterally enforced anti-Iran sanctions drawn up by the Bush Administration under the US Patriot Act against companies that operate completely legally in Britain. Those affected by the account closures are not directors of the companies but ordinary staff members, including clerical officers, computer engineers and bank tellers.
Barclays refuses to discuss the decision or to say how many people have been affected by its action. But The Times has obtained a letter written by Deborah Cooper, a senior Barclays lawyer, which states that the bank must consider ?the global regulatory environment? and regards ?full compliance with sanctions regimes to be of extreme importance?.
Ms Cooper?s letter was addressed to lawyers representing employees of the Iranian-owned banks Saderat and Melli whose accounts have been closed and funds returned to the account holder.
Both banks are based in the City, fully licensed to operate in Britain and regulated by the Financial Services Authority. Neither is subject to the extensive Iranian sanctions regimes that are operated by the Treasury or the European Union.
However, the US Government?s Office of Foreign Assets Control has placed both on its list of specially designated nationals (SDNs).
Ms Cooper?s letter said: ?Barclays has . . . a policy of not conducting business with people or entities which are publicly designated SDNs and in line with that Barclays is unable to receive payments from or undertake other business which involves Melli or Saderat.?
Barclays began the account closures in February, shortly after reports from industry sources that US Treasury agents had been touring the City of London putting pressure on financial institutions to withdraw from any form of business that might have Iranian links.
One source told The Times that City banks had been warned that they would lose access to the US market if they continued to deal with Iranian businesses. Barclays has extensive business interests in the United States.
The US Government has accused Melli Bank of alleged links to the proliferation of weapons of mass destruction and described Bank Saderat as a terrorist financier that has channelled money to Hezbollah and other groups. Both banks deny the allegations strongly.
Case study: Cast out in the supermarket
Chris was doing the shopping in Tesco when Barclays rang to tell him that his bank account was being closed. Later that evening his wife was told that her Barclays account, which she had held for 25 years, was also being closed.
Chris, 46, works in IT for Bank Saderat, and his wife is in the accounts department of Melli Bank. Both institutions are Iranian-owned. ?They said it was because of sanctions but I knew there were no British sanctions on the banks. I asked them if they were responding to US laws and they said they didn?t have to give me a reason,? he said.
The couple opened new accounts with one of Barclays? rivals but they had difficulty transferring standing orders, especially Chris?s child-support payments. He said: ?I know that UK banks are being pressured by America to stop all dealings with Iran but what impact will it have to shut an English bloke?s account with an English bank? The Iranians won?t give a monkey?s. What upsets me is the lack of respect Barclays have for their customers.?