Nigel Farage said he was denied accounts at nine banks. Credit: Geoff Pugh for The Telegraph
EU Laws Charged Against Banks The use to close customer accounts due to their political views is expected to be lifted in line with plans being considered by ministers.
Treasury officials have ordered the city's oversight body to urgently review its «politically exposed persons» (PEP) rules after several public figures, including Nigel Farage, complained that their accounts were closed without warnings.
Measures enshrined in UK law under a Brussels ruling requiring financial institutions to carry out «extended» background checks on people involved in public life have raised concerns that banks are restricting free speech.
Chancellor Jeremy Hunt and Business Secretary Kemi Badenok are believed to be sympathetic to the need to amend such EU rules.
Mr Farage said he was denied accounts at nine banks and urged the government to use the UK's exit from the EU to abandon the current system and end the «injustices» faced by public figures.
He said closing his account and other banks refusing to accept him as a client was «serious political harassment» and suggested it was «corporate bias» linked to his Brexit campaign.
“What is happening to me and many others is a direct result of EU laws that have been incorporated into the UK rulebook,” he said. “Add to that the UK’s obsession with gilding EU regulation and this is how this injustice was allowed to happen.
“If only our government would implement the Brexit freedoms available. He still can and must do the right thing and repeal this law.”
Andrew Griffith, Secretary of the Treasury Department of the Treasury, wrote a letter to the Financial Conduct Authority asking them to expedite the revision of the rules.
«Given the strength of the concern on this issue, I expect the FCA to prioritize this important review in the coming months and if there are 'easy wins' along the way, they will be implemented as soon as possible,» he said.
The rules apply to politicians, diplomats, generals, and even members of the royal family, and often include combing not only their financial affairs, but also their extended families. Such PEPs are subject to «heightened scrutiny» by banks to ensure they are not involved in money laundering, blackmail or corruption.
Lord Moylan, a Conservative colleague, added: “Now that we have left the EU, we can return to proper international standards by distinguishing between domestic and foreign PEPs. But we have resistance from our own civil servants, and the ministers agree with that.”
Sir Charles Walker, a senior Conservative MP who campaigned on the issue, urged the government to strengthen existing powers to sanction banks that misbehave. “We have often complained that the EU has gilded its own legislation, but in this case it is the banks that are gilding and seem to be turning their backs on customer protection,” he said.
“Banks can act the way they are because they have access to an almost bottomless money pit to defend themselves against any claims made by a debanking client.”
Claire Coutinho, Secretary of State for Children, said it was «completely unacceptable for a bank to close an account because it doesn't like the opinions of individuals.»
The measures are based on international standards but have been strengthened by the EU and incorporated into UK law through a bloc directive on money laundering.
Brussels has eliminated the distinction between local PEPs, who are generally less at risk, and those who come from other countries. Ministers acknowledged that EU regulation «goes beyond» international obligations.
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