Co-operative Bank admits bank closures are directly due to US blockade policies
Spring 2016
Co-op Bank Chief Exec admits: “it is correct that the sanctions that are in place are those imposed by OFAC.”
In November 2015 the Co-operative Bank closed the bank account of the Cuba Solidarity Campaign (CSC) citing changing “risk appetite” and “global regulations” among the reasons.
Now following a huge campaign by CSC members and affiliates Niall Booker, the bank’s Chief Executive, has finally confirmed in writing that the closure was due to ‘risk’ arising from sanctions imposed by the US government.
In response to direct questions from concerned members, Mr Booker said “it is correct that the sanctions that are in place are those imposed by OFAC.”
US blockade policies against Cuba are enforced by the US Treasury Department’s Office of Foreign Assets Control (OFAC). By adhering to US sanctions the Co-operative Bank is complying with US extraterritorial legislation. This is in itself illegal under British and EU law. When similar events occurred in Austria and Mexico, those countries acted to penalise the companies for acquiescing to US blockade sanctions legislation over their own county’s sovereign laws.
CSC has written to the Foreign and Commonwealth Office and the Department of Trade and Industry to ask that they make urgent representations to the US government and to the Co-operative bank to ensure British individuals and companies are free to work with Cuba without being sanctioned by US blockade policies. The British government should enforce the existing ‘Protection of Trading Interests’ legislation to ensure British companies and banks do not carry out US blockade policies and ensure that they are not prevented from carrying out normal trade and relations between the UK and Cuba.
The All Party Parliamentary Group on Cuba (APPG) has also taken action on the issue and written directly to the UK government.
Cat Smith MP, Chair of the APPG said
“It cannot be right that this UK based organisation (CSC) should be penalised due to United States’ blockade policies when the organisation is doing nothing more than promoting better UK-Cuba relations in accord with UK Government policies.”
The Co-operative’s admission that it closed the account out of fear of US sanctions is one of the first times a major corporation has admitted acting as a result of US extraterritorial anti-Cuban blockade legislation.
Extraterritorial nature of the US blockade and British government policy
In 1992 and 1996, legislation was passed in US Congress to strengthen the extraterritorial parts of the blockade. The Torricelli Law (1992) made it illegal for US-owned subsidiaries in third countries to trade with Cuba and the Helms Burton Act (1996) made foreign investment in some Cuban companies liable to prosecution in the US.
Britain and the EU opposed these laws and in 1996 the European Council introduced regulation EC2271/96 (the 'EU blocking statute') to offer protection to EU individuals and companies against certain specific extraterritorial legislation, including the Helms/-Burton Act.
The British government also passed its own ‘antidote’ legislation, Protection of Trading Interests in 1996.This enables the British government to penalise companies in the UK that comply with the extraterritorial aspects of US law, thus supposedly countering the effects of the US legislation. However, although this Order remains on the statute books it has never been invoked.
In 2007 Austria’s fifth largest bank, BAWAG, reversed a decision to close the bank accounts of 100 Cuban customers after the Austrian government threatened to charge the bank for violating EU laws.
In a statement to the Austrian parliament the then Foreign Minister, Ursula Plassnik said:
"US law is not applicable in Austria. We are not the 51st of the United States."
In 2008 the Mexican government fined the Sheraton Maria Isabel hotel £60,000 for barring 16 Cuban guests. The Mexican Foreign Ministry said the fine was for violating the national ‘Act to Protect Trade and Investment from Foreign Norms that Contravene International Law’ passed October 1996, in order to oppose the Helms-Burton extraterritorial law.
In May 2007 160 British MPs signed ‘Early Day Motion 1408, US Extraterritorial Legislation’ in response to Hilton Hotels and Barclays Bank complying with US sanctions. The EDM called upon the British government to “make urgent representations to the relevant US authorities to cease the prosecution of such illegal trade measures.”
The Co-operative Bank is one of the oldest banks in Britain with roots going back to its establishment in Rochdale in 1872. This issue is therefore one of British independence and sovereignty in so much as US law is impacting on a UK based bank and UK based organisations carrying out perfectly legal activities in this country.
The story was reported by several papers including the Daily Mirror and Morning Star in Britain and widely in the Cuban media.
Cuban daily, Granma, cited the CSC bank closure as another example of the extraterritorial character of the blockade: “A clear example of this policy is the closure of the bank accounts of the Cuba Solidarity Campaign in the UK, following the takeover of the Co-op Bank by US-based hedge funds.”
And went on to quote CSC Director, Rob Miller: “The fact that such an historic and proudly independent British institution, renowned for its ethical banking, has been forced to adopt US-imposed policies is an affront to us all.”
In the light of the recent rapprochement between the US and Cuba, it is ludicrous that the US government is still attempting to prevent foreign companies and organisations from having normal business and banking relations with Cuba.
CSC believes that the British government should uphold its own sovereign laws above those of the US and defend British interests; it should make representations to the US government to remove the threat of fines toward foreign companies that trade with Cuba, and invoke existing UK legislation to prevent British companies from complying with US extraterritorial legislation. This would send a clear signal to other banks and companies facing similar dilemmas over their “risk appetite” that UK laws are sovereign and that UK–Cuba trade is being supported.
