British firms face ‘debanking’ for trading with Ukraine, business leaders warn
UK businesses reportedly face being ‘debanked’ over trading relationships with Ukraine, business leaders have warned.
Firms are increasingly “afraid to trade with Ukraine from the UK” due to the risk of having their accounts forcibly closed by overly risk-averse financial institutions, it has been claimed.
According to Politico, both the British-Ukrainian Business Council (BUBC) and the British-Ukrainian Chamber of Commerce (BUCC) have cited multiple examples of firms being debanked or having transactions cancelled in relation to dealings with Ukraine.
Writing to City minister Andrew Griffith last month, BUCC co-chair Bate Toms warned: “Conducting even one Ukrainian transaction can lead to an account being closed. UK banks generally refuse to open accounts if any Ukrainian trade is contemplated.”
It comes after a wider debanking scandal emerged after former UKIP leader Nigel Farage became embroiled in a row with Natwest-owned Coutts, which closed his premium account.
Toms, who also wrote to business minister Nusrat Ghani, wants the government to include concerns over how UK banks handle business transactions with Ukraine in its review of so-called politically exposed persons (PEPs) and their treatment by financial institutions.
He warned: “If trade from the UK is not possible… Ukraine’s economy will suffer, harming its ability to fund defence and making it even more dependent on foreign assistance.”
‘Not in scope’
Meanwhile James Watkins, from the BUBC, told Politico the issue of closures were “having a big impact on all of us who are doing our best to support Ukraine during this traumatic period”.
He added that they were an “ongoing problem… not just actually with Ukraine but a whole range of other markets”.
However, banks have said they must comply with legal and regulatory obligations and that Western and UK sanctions against Russia, which is currently occupying parts of Ukraine, complicate matters.
A UK Treasury spokesperson said the issue was “not in scope” of the PEP review which was about individuals rather than businesses. They added: “We continue to stand firm in our support for Ukraine, with significant military and humanitarian assistance.”
Politico said HSBC, one of the banks named in Toms’ letter, declined to comment on the matter.
A Santander UK spokesperson said: “Santander UK abides by its legal and regulatory obligations, including those concerning sanctions compliance. We do not prohibit transactions or client relationships associated with Ukraine.
“However, transactions with Ukraine’s non-government controlled regions are complex, and sometimes there can be delays while all necessary checks are completed, and in some instances, certain payments may not be possible.”