The Finsbury Park Mosque in London was, for several years until 2005, the base of Abu Hamza, who was later convicted of terrorism offences in the United States. Abu Hamza was widely regarded as a preacher of hate and the UK government had made a succession of attempts to have him deported. It also consented to extradition. But Abu Hamza's legal team was tenacious and kept him in the UK by a succession of legal appeals at an estimated cost to the UK taxpayer of GBP25 million in legal aid. He received a further GBP3 million in benefits some media has reported although the veracity of that claim cannot be verified.

Abu Hamza is presently in a "super-max" prison in the USA but last October it was reported that he was making an application to be returned to the UK to serve his sentence. He was jailed for life by a New York court. The application is being filed in the European Court of Human Rights by his UK lawyers. He became Imam of the Finsbury Park Mosque in 1997 and used it as a platform to foment dissent, to preach hate against non-Muslims and, the American Courts found, to be the base for planning a number of terrorist events. That included organising the kidnap of 16 people, including British subjects, in Yemen, the organising and funding a terrorist training camp in the USA and sending money to the Taleban. He was an outspoken supporter of those who flew two airliners into the World Trade Centre Twin Towers and another aircraft into The Pentagon, Washington DC, on 11 September 2001.

However, the Charity Commissioners found that Abu Hamza was using the mosque for his own political purposes and found the the committee that ran it was intimidated both as to collections and distributions of moneys collected. Abu Hamza was ordered to stay away from the mosque, there were major changes, changes which were often reported by mainstream media. In 2003, security forces and the police raided the mosque after reports that there had been combat classes, including weapons training, conducted inside the mosque and that the mosque was being used as the base for preparation for a biological attack in London using the poison ricin. The mosque was boarded up.

For example, on 28 May, 2004, the BBC reported "Despite being subsequently banned from preaching at the north London mosque, Abu Hamza had continued to hold Friday prayer meetings on the street outside, sometimes preaching to up to 150 supporters." (see "http://news.bbc.co.uk/2/hi/uk_...")

By 2014, the mosque had changed beyond all recognition. It was owned and run by a new company with no ties to the old operators, it was rapidly becoming a beacon of how Islam should be practised with acceptance of a variety of creeds within Islam, but a rejection of extremism. It functions as a community centre and inter-faith events, functions and discussions are regular events. Now, diametrically opposed to its divisionary past, it is a place of unity. Even so, The Independent reported in 2014, it was "the name Finsbury Park remains infamous and inextricably linked with the former imam, as well as the self-styled sheik Abu Hamza al-Masri and the legions of young men – including “shoe-bomber” Richard Reid and 7/7 bomber Germaine Lindsay – who came here to be primed for martyrdom."

The problem is that people have long memories for bad things and those memories are not easily displaced. Even where they are, a degree of suspicion remains.

In 2009, following an astonishingly dubious judicial process, the US based operators of a charity sending money for relief in schools and hospitals in Palestine were jailed for a total of 65 years. There was significant high-level noise about charities being used to fund terrorism.

In 2012, US authorities fined HSBC USD 1,900 million for breaches in its counter-money laundering and anti-terrorism functions. The USA has a tendency to attack foreign institutions for failures that its own banks routinely demonstrate without penalty.

As part of a global de-risking, financial institutions all over the world began to shed accounts that they considered might expose them to any risk of prosecution for failures to properly identify risk. From the banks' point of view, it was often cheaper to close accounts than to constantly monitor movements of moneys that may, or may not, have related to terrorism. Essentially, the banks took the view that even intelligence agencies fail to identify the risks and they are in the business of banking not intelligence gathering.

One of the tools that financial institutions have long used are watch lists, the grand-daddy of which is World-Check. World-Check is huge and for several years had a reputation for adding to its database but not removing or updating items. When it was bought by Thompson Reuters, to sell alongside its CompliCheck service (run by Complinet - disclosure, Nigel Morris-Cotterill, our big boss, is a contributing editor at Complinet / Accellus) the World-Check was dominant and inertia made it almost impossible to unseat them from existing contracts. However, it had been thought that the culture of failing to update had been eradicated.

Part of the problem is that World-Check has for years been created by teams of data-bunnies around the world and for them, although they are collecting and publishing data in English, English is not their first language. That, and local variations, militate against understanding the nuances of the public reports that they read and package into World-Check data.

World-Check is so embedded that many regulators take the view that any financial institution that does not use it is failing to use the tools at its disposal. And regulators are demanding that banks, in particular, use more and more technological support, as evidenced in the UK FCA's findings regarding Deutsche Bank recently.

Against all that background, in 2014, HSBC did as it is expected to do: performed checks on all of its charity customers, worldwide, including a World-Check database check. It found that the Finsbury Park Mosque was listed as having connections to terrorism. Aware of the high risk of more penalties in the USA in relation to any US dollar accounts or transactions the Mosque may have, the bank took the entirely reasonable step of closing all the accounts it held for the mosque, saying that the accounts "fall outside our risk appetite."

Of course, no one has a right to banking services, but they do have a right not to be discriminated against when the decision as to whether to provide or continue services is made. HSBC's decision was not discriminatory: it was based on the fact that World-Check, as the most relied-on source of information and with the credibility of Reuters, one of the world's biggest news organisations, behind it, provided information that skewed that risk profile.

Yet, there had already been at least seven years in which the mosque had entirely distanced itself from its terrorist-linked past.

The new owners and operators of the Mosque found that they were repeatedly turned away by other banks, using similar terms. They sued World-Check's owners, Thomson Reuters, for libel. Last week, they won damages and an apology.

The original report, everyone agrees, was correct. Thompson Reuters has said that World-Check "made the false allegation that there were grounds to suspect that the claimant had continued connections to terrorism."

Where does this leave FCROs?

The obvious problem is that the clear market leader now has a known failure in its systems. It is, one has to say, an impossible task to ensure that all data is kept up to date. But that is what the users rely on. FCROs must, of course, now recognise that the information is a guide and that it must be verified. That has always been the case but, because of pressure by regulators, it has become regarded as a de facto black list.

It isn't. With regard to news and, even, sanctions lists, it is vital that FCROs take the data that is presented and then check its veracity. Why? Because now the data is publicly known to be faulty, reliance on it without further checking is at least negligent or possibly reckless and both can have personal consequences for the FCRO and / or the financial institution he is engaged by.

Sources:
http://www.independent.co.uk/n...
http://www.reuters.com/article...