Azhar Vadi | Cii News | 10 January 2013

A second South African financial institution, Al Baraka Bank, has closed the account of the Al Aqsa Foundation in South Africa according to Melissa Hoole, a spokesperson for the foundation.

The Johannesburg based organisation that provides humanitarian aid in Palestine opened a banking account at Al Baraka Bank following a decision in December last year  by another institution, First National Bank (FNB), to terminate its relationship with Al Aqsa .

FNB at the time stated that: “It has come to the bank’s attention that the foundation is expressly listed by the US Department of Treasury, Office of Foreign Assets Control (OFAC) and other international sanctions lists. The listing of the Foundation had been verified with reference, inter alia, to the addresses contained in the listing documents.”

The Office of Foreign Asset control (OFAC) Compliance is part of the U.S. Department of the Treasury. According to World Compliance, a web database site of profiles of individuals and organisations that pose a potential risk to the financial system, OFAC is responsible for administering and enforcing economic and trade sanctions against targeted foreign countries, terrorism sponsoring organisations and international narcotics traffickers, following U.S. foreign policy and national security objectives.

Following FNB’s decision to terminate Al Aqsa Foundation’s account, effective from 31 march 2013, another account was opened at Al Baraka Bank, but was also closed down according to Hoole. “There was a new account opened at Al Baraka in light of the issue that arose with FNB. Al Baraka Bank unilaterally closed Al Aqsa Foundation’s account without given them any prior communication.”

Yunus Paruk, the marketing manager at Al Baraka Bank, responded to requests for an interview on Cii Radio regarding the matter by stating: “Al Baraka Bank subscribes to the Banking Association’s Code of Conduct and therefore cannot comment on individual client’s accounts with the Bank in order to protect client confidentiality.”

Zahid Asmal, a member of the Palestinian Solidarity Alliance (PSA), responded in surprise to the Al Baraka statement. “I’m shocked. If FNB had been able to comment on the issue and it follows the same code of conduct, then what other rules govern Al Baraka Bank then? I’m stunned that Al Baraka Bank, a much smaller bank than FNB in the country, chooses to keep quiet and not comment on the situation.”

He said Al Aqsa’s banking account was not a personal account. “It is an account for the Ummah. It’s an account for an NPO and as such I cannot see how they cannot comment on something like that, when FNB clearly had then broken the code when they commented so heavily on the issue thus far.”

Hoole acknowledged that the banks must be experiencing pressure behind the scenes in order to close Al Aqsa’s account. “I believe this pressure is coming from the United States because of the so called Treasury List which has thousands of names of orgnaisations and individuals that they claim they won’t do any business with.”

Hoole dismissed the view that either of the banks were adhering to a code of conduct. “FNB and Al Baraka Bank have not been adhering to a code of conduct. I think that’s coded speak for them to protect their own interests and to resist being transparent.”

Hoole also noted the stringent laws in South Africa that govern the banking and non-governmental sector. “Those laws need to be upheld and applied consistently. We can’t end up in a situation where an organisation that works for the poorest of the poor in the community, stands to have its account closed arbitrarily, when other organisations doing the exact same work with the same banks are allowed to carry on.”

Al Aqsa Foundation in South Africa has been on the OFAC list for the past 11 years. Hoole was unable to say why the decision to have the account closed at this point was only taken now.

FNB has also refused to grant Cii Radio an on air interview but agreed to answer questions via email.

Michael Vacy-Lyle, the CEO of FNB Commercial, stated that their decision was based purely on the Foundation (Al Aqsa) appearing on international sanction lisitings. “The closure is a requirement of global banking governance and is applicable to all South African Banks including Al Baraka Bank.”

Vacy-Lyle described the bank’s relationship with the Foundation as “very good”. He added that the, “…listing was brought to our attention around 12 months ago as part of our internal governance processes – we immediately approached the Foundation and have been in discussions with them since we became aware.”

He also admitted to meeting with Muslim community leaders, organisations and business people on the matter. The outcome of the talks according to Vacy-Lyle saw, FNB explain, “objectively the nature of our decision and explained the bank’s continued commitment to ALL South Africans. He added that the response from the organisations and people met had “been positive”.

Asked whether he was taking threats of a boycott from certain quarters of the community seriously, Vacy-Lyle stated: “Absolutely! Our response has been to be open and honest with our customers, staff and the general market around this decision.”

One of the organisations that FNB has met, is the Jamiatul Ulama South Africa (Council of Muslim Theologians). Moulana Ebrahim Bham, the secretary-general, noted the explanation that FNB has provided. “They have put forward the pragmatic nature of their decision. Because of Al Aqsa Foundation being on the list, it will curtail their trading opportunities, particularly in the foreign market and especially when they have to deal in dollars or send any remittance abroad. Because it goes to the United States treasury, they (FNB) are going to be in a difficult situation…Similar types of arguments have been presented by several other banks.”

The move however extends beyond just the case in question to other Muslim organisations in South Africa. “When someone is placed on the list it is a purely an arbitrary type of decision,” added Moulana Bham. He said the Jamiatul Ulama will be contesting the FNB decision and pushed the question to South African politicians: “We need to take it up with legislators ? Where does this leave South Africa as a sovereign state?