UK banks forcibly closing accounts of British firms doing business in Ukraine: Report

Banks in the UK are forcibly closing the accounts of British firms felicitating trade with Ukraine due to money laundering and bribery as the country is engaged in war with neighbouring Russia. Business leaders have been warned against doing business in Kyiv, thereby torpedoing the wider efforts to boost war-ravaged Ukraine's economy. Concerns are also emerging due to the Western sanctions against Russia. 

In a letter to UK's Treasury Minister Andrew Griffith, British-Ukrainian Chamber of Commerce (BUCC) Co-Chair Bate Toms said that Brits are increasingly “afraid to trade with Ukraine from the UK” as they risk being debated, Politico newspaper reported. The document, dated July 26, was also copied to UK Business and Trade Minister Nusrat Ghani.

"BUCC has received multiple complaints from firms who have had bank accounts closed — or their attempts to set up accounts rejected — because of dealings in Ukraine," the letter said, as per the newspaper. Banks also insist that British traders must fulfill their legal and regulatory obligations. They also warn about strict compliance with Western sanctions on Russia whilst carrying out trade activities. 

“Conducting even one Ukrainian transaction can lead to an account being closed," Toms said in the document. "UK banks generally refuse to open accounts if any Ukrainian trade is contemplated," he added. 

Complications for UK bank for businesses in non-government-controlled regions in Ukraine

There are complications with respect to business in the non-government-controlled regions in Ukraine that are now occupied by Russia. For instance, some procedures for the banks such as processing the checks take longer time and are more complex now than the territories fall under Russia's control.

Tom has urged the British government to look into the recently launched review of the de-banking of Politically Exposed Persons (PEPs). Many PEPs can still hold positions that can be abused for the purpose of laundering illicit funds, and other financial offences such as corruption or bribery. It was triggered by former Brexit Party leader Nigel Farage, an ally of Donald Trump, during his dispute with a regal private bank. Farage claimed that his exclusive private bank, Coutts, had removed him as their customer because of his polarizing politics. Tom also asked the UK government to ensure that the British banks are handling business transactions in Ukraine fairly. 

“If trade from the UK with Ukraine is not possible for SMEs [small and medium-sized enterprises], the U.K.’s and Ukraine’s economies will suffer, harming Ukraine’s ability to fund its defense and making Ukraine even more dependent on foreign assistance,” he warned in the letter. 

While Tom agreed that British banks, decades ago, were at risk while doing business with Ukraine, he noted that “Ukraine has since greatly improved its rule of law."