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Bank has decided to discontinue accounts of customers from countries that are subject to significant EU sanctions

Dubai: HSBC is closing the accounts of Middle Eastern customers not only from Syria, but also from Sudan, Iran and other countries effective March 20.

 
The global banking giant confirmed that it is discontinuing the accounts of customers from countries that are subject to significant sanctions from the European Union, United States or both. The countries are selected based on an “internal risk assessment”.

 
An HSBC spokesperson, however, clarified that the ban is not across the board. HSBC refused to disclose the full list of countries for which the accounts will be closed, but it confirmed the list does not include any country in which HSBC operates a branch network.

 
Exempted from the ban are customers who have relationship managers. These clients are classified as either “Advance” or “Premier” and are required to maintain a minimum balance of Dh100,000 and Dh350,000 respectively.

“This is not a blanket ban of all customers from certain sanctioned countries. As long as customers with connections to sanctioned countries satisfy our due diligence requirements for Premier or Advance, then we will continue to bank with them,” an HSBC spokesperson told Gulf News.

 
Other international banks in the UAE, however, assured they don’t have any immediate plans to impose a similar ban. Standard Chartered said they are not cutting off ties with clients on the basis of their passport.

Revenues and profits

 
“Standard Chartered does not severe relationships with clients based on their nationality and we adhere to the highest standards of compliance to local and international regulations. [The bank] is focused on Asia, Africa and the Middle East, and 90 per cent of our profits and revenues are generated from these markets,” a spokesperson said.

 
HSBC started sending out letters to its customers this month, informing them of the bank’s decision and giving them until March 20 to transfer their cash balances to an alternative bank.

 
“In the event you do not make such arrangements by March 20, 2013, we will arrange for a cheque for any available credit balance/s in your account/s to be sent to the address we have on record for you,” the bank said in its letter.

 
When asked what prompted the decision, HSBC said they are committed to “adopt the highest compliance standards across the Group. As a result, we must apply enhanced oversight on any customer with connections to sanctioned countries.”

 
“Where we are unable to maintain sufficiently detailed information about such a customer through a relationship-managed account, we have to discontinue that relationship.”

 
The bank told affected customers that any outstanding amounts on their HSBC credit card are now due and payable. They have to settle any outstanding amounts by March 20. “Your existing HSBC credit card/s and any supplemental cards will be deactivated on 20 March 2013. You are requested to return/destroy any such cards by [deadline],” said the bank in the letter.

 
Those who have an HSBC or personal loan, which takes, say, five years to pay, are given the option to settle the balance in full or continue to repay the balance via monthly instalments. “Any penalty/charges due to early closure will be waived off if a customer chooses to settle the full outstanding amount,” the spokesperson said.