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The truth about Nigel Farage’s bank accounts

What’s behind the apparently sinister de-banking of the Reform UK president – and why is the Prime Minister involved?

By Will Dunn

Nigel Farage has spent the past week exposing the establishment’s latest and arguably greatest crime: the grey eminences of the deep state have swung it so that Nigel Farage, man of the people, can no longer have a bank account at Coutts, where customers must have at least £3m in cash or a proper Habsburg jaw.

According to Farage, seven other banks have since refused his custom, and this amounts to an attempt to “force me out of the UK” using the extra financial scrutiny that comes with his status as a politically exposed person (PEP).

Natwest, which owns Coutts, immediately offered Farage a replacement account, but apparently this still merits the attention of other well-known anti-establishment figures, such as the Prime Minister and the Chancellor of the Exchequer, who sprang to Farage’s defence, demanding the Financial Conduct Authority review the rules around PEPs to ensure that (as a Treasury spokesperson said) “no one should have their bank account denied on the grounds of freedom of expression”.         

Why are the country’s most senior politicians interested in which part of the Natwest Group gives Nigel Farage a bank account? 

One point to note is that some MPs and peers despise the PEP regime. The UK, following retained EU law to combat money laundering and corruption, treats domestic and foreign PEPs equally. This means the finances of anyone who is “entrusted with prominent public functions” faces extra financial scrutiny, as do their families, “known close associates” and anyone with whom they have “close business relations”.

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MPs hate being treated, as the Conservative minister Charles Walker put it in a 2016 debate, as if they “cavort with international despots and criminal masterminds”. Walker has listed multiple instances of MPs’ kids, colleagues and aged parents encountering “intrusive” financial oversight from banks. It’s also possible that party donors could be put off by the idea that being a “known close associate” of a PEP might incur some disagreeably rigorous anti-money laundering (AML) scrutiny.

What this means is that there are plenty of people in Westminster who would like to see the rules loosened for proper, British PEPs, and applied with full force to bad guys from abroad. Sources say it’s not unreasonable to suggest that this is why Farage’s downgrading to a Natwest Everyday Basic Scrimper has been deemed of such high importance.

MPs may be wrong to think they can free themselves from intrusive oversight, however.

[See also: Nigel Farage and the hysterical right know they’ve lost]

For one thing, it’s not actually the government, or the banks, that decide who counts as a PEP. You might imagine the government writes up a big list of influential people and tells the banks to keep a close eye on them, and indeed it has been repeatedly asked to do so, most recently by the Treasury Select Committee. But nobody in government wants to be the person who made the call that led to a short-tempered minister’s nephew being denied a mortgage. The people who actually decide whether someone is a PEP are “list providers”: ratings agencies or credit analysts that are contracted by banks to alert them when a customer should be subject to the enhanced scrutiny demanded by AML rules. 

In practice, this means there isn’t a list of PEPs at all, but a set of flags that can go up if some aspect of a person’s financial affairs crosses a line: perhaps they’re a director of a foreign company, or they have unexplained wealth. Perhaps they used their media platform to support Russia’s position against Ukraine – who knows! The point is that there are no hard and fast rules, and in this grey area list providers and banks have to be cautious. Failure to do proper due diligence on PEPs can incur a chunky fine (Barclays paid £72m in 2015) or a criminal conviction with a sentence of up to two years.  

When a customer is flagged in this way, the bank will either do some extra due diligence or decide to close the account. This happens a lot. One person I spoke to remembers clearing “hundreds” of government officials from their client base, in one sweep, while working at a large US bank.  

Another source said Coutts probably couldn’t have told Farage why he’d been dropped because another EU law, the General Data Protection Regulation, would prevent the bank from sharing any information related to someone else’s financial data. Put these together and you get a summary closure and a wall of silence, which Farage has, as you might expect, interpreted as “political persecution”.

It could be that there’s another incentive in this. The idea that the government can close your bank accounts is a fundamental tenet of the Bitcoin religion, of which Farage is something of a high priest. Cryptocurrency promoters often cite episodes such as the bail-in of two Cypriot banks in 2013, in which customers lost billions in uninsured deposits, as a reason to keep one’s money outside the established financial system. It’s not outlandish to suggest that this is a narrative being promoted by Farage – whose Brexit Party (which has since rebranded as Reform UK) was heavily backed by the crypto investor Christopher Harborne.

Will the great and the good be able to free themselves from the extra financial scrutiny that comes with being Important? Perhaps – but if they do, sources suggest the government would have to indemnify banks against the possible consequences of any failure of AML oversight. The position that the UK has built for itself as a global centre of regulated finance would be weakened. Both of these have the potential to be very expensive – and for a government already spattered with sleaze, perhaps not the greatest PR move.

[See also: How Nigel Farage became king of the trolls]

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