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Interpal's US terrorism designation blamed for Lloyd's Bank decision

Finance | Vibeka Mair | 24 Feb 2009

Lloyds TSB has blamed US government economic sanction laws for its decision to block Interpal’s bank account last year.

It’s the first time that Lloyds, who has blocked clearing services for Interpal through its account with the Islamic Bank of Britain (IBB), has spoken out on the matter.

In a statement to the Islamic charity, Lloyds said: “We would like to clarify we have not instructed IBB to close Interpal’s accounts, however we have told them that we are not able to offer clearing services for Interpal.

“This is because Lloyds TSB, like many other banks, has dealings with the United States, and so we have no option but to comply with US government economic sanction laws…The US has classified Interpal as a Specially Designated Global Terrorist which means that Lloyds TSB cannot provide any services to Interpal.”

On US terror list since 2003

An Interpal spokesman said the charity was confused that Lloyds TSB had chosen to act upon the US designation now, since it had been public information since 2003.

“It is especially upsetting that foreign jurisdiction can hinder the essential work of a legitimate charity without any due process whatsoever,” he added. “This is therefore not simply a case of charities working under difficult circumstances but it has now escalated to a serious challenge which the UK government must now address.

“Without the due legal procedures, the US designation process presents a political blockade to charities working in politically-sensitive areas such as Palestine.”

No explanation from Barclays

Meanwhile, the Ummah Welfare Trust (UWT), who had its bank account closed by Barclays Bank in January, has still received no explanation.

Mohammed Ahmed, UWT director said: “We suggested in a meeting with Barclays that it would benefit them to disclose a reason to avoid people making assumptions but it is still adamant to maintain the same position.”

Meanwhile, the minister for international development, Michael Foster, has written to Labour MP Martin Linton about Interpal and UWT's banking problems.

Foster, who promised to report on the matter after MPs urged action in a Westminsister Hall debate on Palestinian Territories organised by Linton, wrote:

"I am aware of the problems faced by both Interpal and Ummah Welfare in clearing funds through UK banks. I hope that the charities will find a suitable way forward that will ensure continuing aid flows for the Palestinian people, which I understand, particularly given the situation in GAza, will be of paramount importance to the charity and its donors."

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