Customers sue ING Bank, allege racial profiling in anti-terror screening
A simple transaction between brothers has sparked a legal battle in the Netherlands. Three ING Bank customers are suing the financial institution after the bank flagged a money transfer as suspicious and launched an investigation tied to potential terrorist financing. The customers claim this scrutiny stemmed from the recipient's Arabic name, alleging racial profiling by the bank, according to a report published on Saturday by broadcast news program Argos.
Jalal Et-Talabi, one of the plaintiffs, claimed the trouble began when he transferred 100 euros from his own credit card to his checking account in September 2022. The transfer was meant to cover a short-term loan he provided to his brother, Abdelhamid. To keep track of the loan, Et-Talabi wrote, "100 euros cash Abdelhamid" in the description during the electronic transfer.
A week later, he received a letter from ING requesting his cooperation in a customer investigation under terms of the Dutch law against money laundering and the financing of terrorism, WWFT.
"The main question was, 'Who is that Abdelhamid?'" Et-Talabi recalled in an interview with Argos. "Could it be that the bank suspects him of terrorist financing based solely on his first name?"
The hearing before the Netherlands Institute for Human Rights is expected to take place this summer. Human rights lawyer Jelle Klaas, representing the customers, argued that ING's reliance on names is not only ineffective but also discriminatory. He pointed out that the bank threatened to close the account of one of the plaintiffs for refusing to cooperate with the investigation.
To put it into context, Klaas recalled the long-running criminal investigations into Dutch crime leader Willem Holleeder, currently serving a life sentence for six assassinations. "It's a bit like searching for Willem Holleeder by asking about every transaction in which the name 'Willem' is mentioned," Klaas said. "Is this Willem Holleeder?"
Holleeder was the mastermind behind the 1983 kidnapping of beer magnate Freddy Heineken, who was traded for a ransom of 35 million guilders, equivalent to roughly 33 million euros today. Nearly one-fourth of that money was never recovered.
Et-Talabi's case is an example of how current methods fall short of accomplishing the goal of blocking financial transactions meant to benefit terror groups. The WWFT has been in place since August 2008, and was amended in 2018 and 2020. It gave banks the responsibility of monitoring financial transactions for suspicious activity, though their use of broadly generic red flags has been called into question.
Last month, the Dutch Banking Association (NVB) acknowledged that ethnically-diverse Dutch people are subjected to checks by their banks more frequently to screen flagged transactions. This typically involves transactions made to people and organizations in dozens of countries deemed to be high-risk. This includes Turkey, Syria and Afghanistan. The NVB noted that ethnically-diverse people have more friends and relatives in these countries, so transferring money to a parent to provide family assistance could trigger an alert at a bank.
A year ago, during Ramadan, concerns were also raised about banks structurally discriminating against Muslims when screening for suspicious transactions under the WWFT. The Muslim holiday of Ramadan also encourages doing more for charity, so mosques and individuals organize fundraisers to provide assistance during the month-long period. “Then they are bombarded by compliance departments of banks who designated them as suspects of money laundering or terrorism,” the National Coordinator against Discrimination and Racism, Rabin Baldewsingh, said last year. “Then they must demonstrate how they got that money before the transaction is processed.”
According to Argos, Baldewsingh is now working with authorities to address the issue. "In the past 20 years, very little research has been carried out regarding the question, 'How effective is this?'" said Marieke de Goede, a political science professor at the University of Amsterdam. "Does this work? And does this work as we would like?"
ING said it does not comment on specific cases. Kris Marx, who heads up the bank's division in charge of money laundering reporting, said that all transactions are screened to comply with mandatory rules. The bank said it is committed to treating its customers fairly, and also its obligations to comply with Dutch and international law.
