London, United Kingdom - Some Islamic charities in the UK have considered moving their financial affairs abroad amid concerns that they could be frozen out of the British banking system after several Muslim organisations and individuals linked to them had their accounts closed without explanation.
HSBC, the UK's largest bank, faced accusations of prejudice against Muslims after sending letters last week to a London mosque, a Gaza-focused aid charity, and the leader of a prominent Islamic think tank notifying them that they were outside the bank's "risk appetite" and giving them two months to withdraw their money.
Those who received the letters included Anas Altikriti, the head of the Cordoba Foundation think tank and a supporter of the Muslim Brotherhood, who said that HSBC had also written to members of his family, including his 14- and 12-year-old sons.
In a statement, the Cordoba Foundation said that those affected had been "confronted with a wall of silence" when they had sought further clarification from the bank and called on HSBC to issue an unequivocal apology.
The banks may have the financial power but when it comes to weighing them on the scales of morality, I wouldn't say they had one percent left now after what they have done.
Mohammed Kozbar, chairman of the Finsbury Park Mosque, a mosque once associated with radical preachers that reopened under entirely new management in 2005, also received the letter and said it might take legal action and called for a customer boycott of the bank.
"Our legal advisor has said that while the bank has acted within its terms and conditions, if they have specifically targeted Muslim organisations then this decision can be challenged under discrimination laws," said Kozbar.
Another organisation, the Muslim Association of Britain, said it had opened an account with HSBC earlier this year, only for the bank to close it three days later, stating that it "did not meet the criteria to hold a bank account".
The dreaded 'T-word'
A spokesman for another charity, Helping Households Under Great Stress (HHUGS), which supports the families of Muslim prisoners accused of terrorism offences, told Al Jazeera that its account had been frozen with immediate effect in the past month by another bank, Barclays.
"The impact is devastating. Your reputation takes a hit obviously and the only thing I can see is the fact that we deal with the families of people who are suspected of being involved in terrorism," Fahad Ansari, a lawyer speaking on behalf of HHUGS, told Al Jazeera.
"That T-word is obviously a risk factor for them, but for us, we are dealing with women and children, mothers and wives, and there is no reason why they should be criminalised. There are scores of prisoner support groups in this country and they have never had any problems with bank accounts. Muslims are second-class citizens and there is no other explanation for it."
CAGE, a civil liberties group that campaigns against counter-terrorism policies, said that its accounts with both Barclays and the Co-operative Bank had been shut down earlier in the year after its director, Moazzam Begg, was arrested and charged with terrorism offences.
Begg has pleaded not guilty to the charges, while CAGE has published a letter from the UK Treasury confirming that it is not subject to any financial restrictions.
"I think there has been some sort of pressure placed on [the banks], but we just don't know. A problem with the lack of regulation in the banking sector is that it is almost impossible to challenge these things," Asim Qureshi, CAGE's research director, told Al Jazeera.
"There appear to be forces at play that are seeking to cripple organisations at the heart of Muslim community; it smacks of religious discrimination and Islamophobia."
Number of banks involved growing
Abdurahman Sharif, operations manager at the Muslim Charities Forum, said he knew of other charities that had so far not identified themselves publicly that had also had financial services withdrawn.
"It's not one bank, it's a number of banks and it is growing actually," Sharif told Al Jazeera. "The problem is that once one bank does this it sets a precedent that other banks follow. That is a serious matter because in a couple of months you could see no Islamic charities having a bank account in this country."
People assume that anything with the name 'Islamic' on it is suspicious.
Muslim aid charities have been under increased scrutiny this year because of concerns that Britons intent on fighting in Syria have been using humanitarian convoys as cover to travel to the war zone and fears that donations raised in the UK could be reaching armed extremist groups.
William Shawcross, the head of the Charity Commission, said in April that Islamic extremism was "potentially the most deadly" problem that the regulator faced.
But Sharif said greater scrutiny of charities' finances prompted by international money laundering concerns and tougher UK counter-terrorism laws had disproportionately affected Muslim charities.
"The issue is one of perception. People assume that anything with the name 'Islamic' on it is suspicious and that is the biggest challenge we are facing at the moment, and that is why we are seeing accounts closed down."
Last month, David Anderson, the UK's reviewer of terrorism legislation, said that the withdrawal of banking services to charities because of more stringent counter-terrorism legislation risked impeding "positive and worthwhile NGO activity" and called for dialogue between policy makers and NGOs to resolve the issue.
But representatives of some affected charities believe other factors may explain the banks' withdrawal of services.
Linked to Gaza?
Muhammad Ahmad, a spokesman for the Ummah Welfare Trust, an aid charity given notice by HSBC, said he believed the closure of the group's account was linked to its work in Gaza, where it maintains a field office. The charity's account also was shut down by Barclays in 2008 during a previous Israeli assault on the besieged Palestinian territory.
"People are dying on the ground. People don't know where to turn because they have lost everything and all we are trying to do is give them some kind of relief. The banks may have the financial power but when it comes to weighing them on the scales of morality, I wouldn't say they had one percent left now after what they have done," Ahmad told Al Jazeera.
Others criticised banks for taking action at a time which affected charities' ability to raise money during Ramadan, their most important fundraising opportunity of the year.
Ansari said that HHUGS had come close to closing its doors after discovering its account had been frozen just days before Ramadan when donors reported that standing orders were being rejected. The charity has previously had accounts closed by two other banks, HSBC and Lloyds-TSB.
"We had literature that was published for Ramadan with the bank details and all of that had to be thrown in the bin and republished. We had no access to funds, we had salaries to pay, rent and bills to pay, and apart from that we had our beneficiaries who are reliant on us. Ultimately, thank God, we survived but each time our income has diminished rapidly and it is harder to get back on our feet."
Ansari said the charity was now considering moving its financial affairs abroad.
"We are exploring all options at the moment. An overseas account is far from ideal because it looks suspicious and we incur charges, but we need to have something in place so that we can carry on with minimum disruption because what is happening now is an absolute nightmare."
A Charity Commission spokesperson told Al Jazeera none of the charities named in this story were currently the subject of investigations but said that business relationships between charities and their banks were not a matter for the regulator to become involved in.
"We know that this has put the charities in great difficulty. We haven't heard from the banks as to what might have motivated this and the charities haven't been told either," the spokesperson said.
"Our position is clear; charities need a bank account to operate safely and effectively. We would have serious concerns if a charity were not able to operate because of a lack of banking services."
Bank denies discrimination
HSBC told Al Jazeera that it had comprehensive rules in place to ensure race and religion were never factors in banking decisions and said discrimination against customers was "immoral, unacceptable and illegal".
It said it had exited relationships with customers in 70 countries as part of a global review of its businesses after being fined $1.9bn by US authorities in 2012 over poor money laundering controls exploited by Latin American drug cartels to move hundreds of millions of dollars through HSBC accounts.
The bank last year appointed Jonathan Evans, the former chief of the UK's MI5 intelligence agency and an expert on Islamic extremism, to head a committee tasked with reducing its vulnerability to financial crime.
Barclays and the Co-operative Bank said they could not comment on specific customers' affairs.
In an Eid message last week, David Cameron, the British prime minister, paid tribute to the "inspiring amount of charity" participated in and funded by British Muslims.
But charity officials say that access to banking facilities is vital for transparency and good governance and fear that fundraising and aid work in Muslim communities could otherwise be driven underground.
"The government has to understand that it is in their interest that genuine charities are able to operate freely without being hindered or abused in this way," said Ahmad.
"Otherwise you are going to force Muslims who may have faith in some charities because of their Islamic principles to take charity into their own hands, and then the government will not know who the money is reaching."