UK banks sound alarms: Closing accounts amidst Ukraine trade
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The reported closure of bank accounts held by companies engaged in business transactions with Ukraine has sparked concerns over sanctions against Russia and potential money laundering issues.
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Pedestrians walk past a branch of a Lloyds Bank, in central London, February 14, 2023. (AFP)
UK banks are reportedly shutting down the accounts of businesses involved in transactions with Ukraine due to concerns related to sanctions against Russia and potential money laundering activities, according to a report from Politico.
The British Ukrainian Chamber of Commerce (BUCC) has reportedly conveyed these issues in a letter addressed to UK Treasury Minister Andrew Griffith.
In the letter, co-chair of BUCC, Bate Toms, highlighted that several companies have faced the closure of their bank accounts as a result of their business dealings with Ukraine. This situation has led to a sense of apprehension among UK firms, discouraging them from engaging in trade with Ukraine out of fear that their accounts might be closed.
The letter further noted that even a single transaction involving Ukraine could trigger the closure of an account, and UK banks have become hesitant to open accounts if there's any association with Ukrainian trade.
The letter also acknowledged that Ukraine was previously considered a risky jurisdiction for business, but it has made substantial improvements in terms of its legal framework over the years.
The complications arise particularly in transactions involving areas not under the control of Ukraine due to regulatory obligations, including compliance with Western sanctions against Russia. It's important to note that trading with Ukraine is not prohibited for UK companies.
If this situation persists, both the UK and Ukrainian economies could face negative consequences, potentially leading to increased dependence on foreign supplies for Ukraine, as stated in the letter.
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