Banks, financial institutions structurally discriminating against Muslims

Banks and financial institutions structurally discriminate against Muslims, mainly due to the law to prevent money laundering and terrorism financing (Wwft), the National Coordinator against Discrimination and Racism Rabin Baldewsingh said to Trouw. He called for an investigation into this to prevent another benefits scandal.

Baldewsingh made this call in the middle of Ramadan. He is currently receiving extra signals from Muslims experiencing discrimination. Part of Ramadan is giving to charity, so mosques and individuals often collect money during the month to help the less fortunate. “Then they are bombarded by compliance departments of banks who designated them as suspects of money laundering or terrorism,” Baldewsingh said to Trouw. “Then they must demonstrate how they got that money before the transaction is processed.”

He shared various examples reported to him. ING asked an entrepreneur to answer additional questions when applying for financing for a new restaurant. His common Pakistani surname matched that of a person affiliated with Al-Qaeda. Another person had to explain the Islamic book he ordered online. A civil law notary refused to help an Islamic foundation fund a cemetery in Limburg, citing the Wwft.

Last year, PwC’s investigation into the benefits scandal found that donating to a mosque was one of the red flags that got people onto the Tax Authority’s fraud list. “I dare say that if we are not careful, a new benefits scandal is in the making,” Baldewsingh said. This must be investigated before things get that far.

Baldewsingh is “seriously concerned” about the effect of institutional racism and discrimination affecting Dutch Muslim communities. In 2020, the Social and Cultural Planning office spoke of Muslims in the Netherlands experiencing “chronic discrimination,” with 55 percent of Muslims regularly experiencing discrimination, compared to 27 percent of the Dutch population as a whole. Of the religion-based discrimination reports to the police in 2021, 67 percent were Muslims.

“I am shocked by these figures,” Baldewsingh told Trouw. “But I meet a lot of indifference. Muslim discrimination goes unpunished. As a result, people drop out. Especially young Muslims. That should not happen; they are our future.”

The National Coordinator against Discrimination and Racism appealed for broad research and a national debate on the position of Muslims in Dutch society. “Are they part of society or not? We have done the same with our slavery past. That was mapped out, there was a change in thinking, followed by an apology. The same should apply here: the investigations must lead to action. On all levels.”

Banks response

The Wwft obliges banks to report “unusual transactions” in the fight against money laundering and terrorism funding. Banks that fail to do so face hefty fines.

According to the Dutch Banking Association NVM, discrimination is an absolute no-go in implementing the Wwft. “Customers’ ethnic, religious, or other background is no reason for stricter checks,” a spokesperson said. The NVB is aware of signals from Muslims and Islamic organizations. “We take all signals seriously and investigate them ourselves. We understand that this has implications on our customers and are, therefore, constantly striving to improve the execution.”