Mohamed Haji Hassan
(Represented by Mr. Conor Power, B.L.
acting on instructions from the Equality Authority)
V
Western Union Financial Services (Ireland) Ltd.,
(Represented by A & L Goodbody, Solicitors)
1. Dispute
1.1 This dispute concerns a claim by Mohamed Haji Hassan that on 16 October 2002 he was treated in a discriminatory manner by the respondent's staff, contrary to Section 5, in terms of Section 3(1)(a) and (c) and 3(2) (e) and (h) of the Equal Status Act 2000. The complainant referred a claim to the Director of Equality Investigations under the Equal Status Act 2000. In accordance with her powers under section 75 of the Employment Equality Act 1998 and under the Equal Status Act 2000, the Director then delegated the case to me, Dolores Kavanagh, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part III of the Equal Status Act.
2 Overview of Complaint
2.1 On 16 October 2002 the complainant, a Somali national and a naturalised Irish citizen, went to an agent of the respondent and sought to collect money in the amount of sterling £50 which had been forwarded to him in Dublin from the U.K. via the respondent's money transfer services. The complainant was initially informed that the money was not there for collection and was subsequently informed that the money had been withheld by the United States Treasury and was in a security queue and would not be released until such time as the complainant forwarded a copy of his passport to a fax number provided. The complainant was further informed that the copy of his passport would then be forwarded to the United States Treasury Department and the Federal Bureau of Investigation. This was confirmed by the respondent to the complainant in writing in a letter dated 25 October 2002 which stated that "In light of the terrorist attacks in the United States additional security measures have been taken with regard to releasing funds in various countries world-wide. Random transactions are being security locked by the US Treasury Department and put in a queue until all required details have been provided. As Western Union is an American company the US Treasury Department reserves the right to request such information".
2.2 On 10 December 2002 the complainant complied with the statutory notification procedures under Section 21 (2) of the Equal Status Acts 2000-2004. The respondent replied to the statutory notification per letter dated 7 January 2003 indicating that the withholding of the money by Western Union from the complainant was on foot of legal requirements to screen all remittances against lists of names of persons and organisations, identified as being associated with terrorism, narcotics trafficking and other illegal activity, provided by the US Treasury Department's Office of Foreign Assets Control, the European Community and other governments, regulatory and law enforcement agencies. The respondent also indicated that such screening is accomplished automatically by Western Union's data processing programs. When the sender or recipient of a Western Union transfer has a name, which is identical to or similar to one of the names on these lists, Western Union suspends the transaction and investigates it. Western Union does not discriminate in the provision of its services on the basis of race, religion or national origin.
2.3 Both parties to the complaint subsequently lodged detailed submissions to the Tribunal, prior to and following the Hearings of the complaint on 29 April and 20 October 2005. On foot of the respondent's submission to the effect that Section 14 of the Equal Status Acts applies, as the money was withheld from the complainant in compliance with Council (EC) Regulation No. 881/2002, (the Regulation), the Equality Officer requested detailed submissions from both parties on the issue of jurisdiction, specifically the jurisdiction of the Tribunal to investigate and decide in this matter, (Article 6 of the Regulation refers). Final correspondence was exchanged with the parties on 9 December, 2005.
2.4 Both parties were notified by the Equality Officer that the Decision which would issue in this matter would (i) deal with jurisdiction as a preliminary issue, and (ii) be in brief format due to the highly sensitive nature of some of the commercial material disclosed at Hearing and in written submissions.
3 Jurisdiction
3.1 Section 14(1)(a) of the Equal Status Acts 2000-2004 states
"Nothing in this Act shall be construed as prohibiting-
(a) the taking of any action that is required by or under-
(i) any enactment or order of a court,
(ii) any act done or measure adopted by the European Union,
by the European Communities or institutions thereof or by bodies competent
under the Treaties establishing the European Communities, or
(iii) any convention or other instrument imposing an international obligation
on the State,"
3.2 Council (EC) Regulation No. 881/2002
3.2.1 Under Council (EC) Regulation No. 881/2002 the respondent is required to have effective checks in place to prevent the transfer of funds through its services to any of the natural or legal persons, groups or entities listed in Annex I to the Regulation who are considered under the Regulation as terrorists or associated with terrorists. The Regulation is silent on the nature of the checks to be used.
3.2.2 Article 5 (1) of the Regulation requires that "natural and legal persons, entities and bodies shall provide immediately any information which would facilitate compliance with this Regulation .............................. to the competent authorities of the Member States listed in Annex II where they are resident or located, and, directly or through these competent authorities, to the Commission" and shall " cooperate with the competent authorities listed in Annex II in any verification of this information.
3.2.3 Article 5 (2) of the Regulation states that "Any information provided or received in accordance with this Article shall be used only for the purposes for which it was provided or received".
3.2.4 Article 4 (2) of the Regulation states that "Any information that the provisions of this Regulation are being, or have been, circumvented shall be notified to the competent authorities of the Member States and, directly or through these competent authorities, to the Commission".
3.2.5 Article 6 of the Regulation states that "the freezing of funds, ......, in good faith that such action is in accordance with this Regulation, shall not involve the natural or legal person, group or entity implementing it, or its directors or employees, in liability of any kind unless it is proved that the freezing was due to negligence".
4 Equality Officer's Decision - Jurisdiction
Having carefully considered the submissions of both parties in this regard I am satisfied that the Tribunal has jurisdiction to investigate and decide in this complaint for the reasons set out at paragraph 7 below.
5 Prima Facie Case
5.1 I must first consider whether the existence of a prima facie case has been established by the complainant. Section 38A(1) of the Equal Status Act 2000 (as inserted by the Equality Act 2004) states that;
"Where in any proceedings facts are established by or on behalf of a person from which it may be presumed that prohibited conduct has occurred in relation to him or her it is for the respondent to prove the contrary". (1)
Section 38A(2) states that
"This section is without prejudice to any other enactment or rule of law in relation to the burden of proof in any proceedings which may be more favourable to the person".
6 Prima Facie Case - Complainant
6.1 Race Ground - Direct Discrimination
6.1.1 The complainant is a Somali national, a naturalised Irish citizen and a Muslim and this is not disputed by the respondent. The complainant has provided no evidence to indicate that either his race or nationality was indicated by him to the respondent at any time in the course of the money transfer in question. The complainant states that his name is of Arabic origin and that this is indicative of ethnic origin. The respondent states that the transfer of funds to the complainant was frozen because the complainant's name was a close match for a name listed in Annex 1 to Council (EC) Regulation 881/2002 and for no other reason and that earlier references to random transactions having been selected by the US Treasury for investigation were an error.
6.1.2 I am not entirely satisfied that the clear indications given to the complainant at an early date that the transaction was frozen in compliance with US regulatory requirements were simply "an error" as stated by the respondent. The reality is, however, that the actual freezing of the transaction is, as a matter of fact, in compliance with the requirements of the Regulation. The complainant has failed to establish that this compliance was not achieved in good faith or, in circumstances whereby all of the names in the Annex to the Regulation are of Muslim origin, that the freezing of the transaction was directed at the complainant's racial/ethnic origins rather than straightforward compliance with the Regulation, irrespective of the racial/ethnic origin of the names on the list.
I find therefore that the complainant has failed to establish a prima facie case of direct discrimination on the race ground. I find further that the actual freezing of the funds by the respondent was, as a matter of fact, in compliance with the Regulation and that Section 14 of the Equal Status Act therefore applies to the actual freezing of the funds.
6.2 Religion Ground - Direct discrimination
Both the complainant's name and the name on the list at Annex I to the Regulation for which the complainant's name is a close match are Muslim names. The respondent is required to prevent the provision of funds to all persons, entities and bodies listed in Annex 1 of the Regulation. The Regulation must be interpreted purposively not literally and I do not accept the complainant's contention that checking for anything other than exact name matches exceeds the requirements of the Regulation. Given the variations in names that occur internationally, especially where names are transliterated from other scripts, and the variation between countries as to which names are generally given on official forms, it seems clear that it would be necessary to check more widely than for identical matches and also check for near matches. This is borne out by the fact that the complainant's name has been misspelled a number of times by various people in the course of correspondence in the investigation of his complaint. The method of checking for the names in Annex I is not specified in the Regulation but the objective of the Regulation is clearly specified and it seems a matter of common sense that the objective could not be achieved with any degree of effectiveness unless near matches were also checked.
6.2.1 The respondent did not freeze the transfer of funds transaction to the complainant simply because he has a Muslim name but rather because the complainant's name very closely matches the name, also Muslim, of a person listed in Annex I to the Regulation. I am satisfied that the transfer of funds would have been frozen by the respondent to any person having a name which coincided with or closely matched a name on the list in Annex I of the Regulation irrespective of religion. This was borne out by evidence presented by the respondent of the large number of transactions successfully carried out by and to persons globally with Muslim names.
6.2.2 On balance, based on the totality of the evidence presented I am not satisfied that the complainant has established facts from which it can be presumed that direct discrimination on the religion ground has occurred in relation to the actual freezing of funds to him. I find therefore that the complainant has failed to establish a prima facie case of direct discrimination on the ground of religion in relation to the actual freezing of the funds. Furthermore in regard to the actual freezing of funds the respondent was, as a matter of fact, in compliance with the requirements of the Regulation and Section 14 of the Equal Status Act therefore applies to the actual freezing of the funds.
7 Indirect Discrimination
7.1 Notwithstanding paragraph 6 above regarding the actual freezing of funds to the complainant I am not satisfied that the procedures followed by the respondent subsequent to the freezing of the transaction were essential to achieve the legitimate objective of preventing transfers of funds to terrorists, or that they were, in fact, in compliance with the requirements of the Regulation. Specifically, the respondent made no attempt to have the matter of clearing the frozen transaction dealt with by the relevant designated Irish competent authorities (2) or to report it to those authorities and the EU Commission, as required under the Regulation. Instead the respondent required the complainant to forward detailed personal information and I.D. for transmission onward to the respondent's US headquarters and indicated that the information would be passed to named US authorities for clearance. In oral evidence provided by the respondent at Hearing, and in written correspondence, it was subsequently confirmed that the transaction was actually cleared by the Office of Foreign Assets Control (OFAC) in the US Treasury Department.
In their conduct subsequent to the freezing of the funds I am satisfied that the respondent placed on the complainant a requirement (3) that is not directly discriminatory and is applied to Muslims of non-Irish national origins and non-Muslims of Irish national origins alike viz
The requirements placed on the complainant-
a) not to be a person named on the list at Annex I of the Regulation
b) not to have a name closely matching any of those on the list, or
c) if he has a similar name, to prove to the respondent's satisfaction that he is not one of the persons on the list, including the production of clear documentary evidence for scrutiny, and
d) to have the checks carried out in the US only
e) to deal with the respondent's head office in the US and
f) to have the transaction cleared by US authorities.
7.2 The question then arises as to whether substantially more non-Muslim persons or persons of Irish national origin would be able to satisfy each of these requirements than would Muslim persons or persons of non-Irish national origin. I think it is reasonable to conclude, in circumstances whereby all of the names of natural persons listed in Annex I of the Regulation appear to be Muslim, that Muslims will be substantially more likely to have similar names to the persons on that list than would non-Muslims, regardless of national, racial or ethnic origins. Furthermore as the complainant did not identify himself as being of Somali national origins in the course of the actual transfer of funds transaction I am satisfied that it was the fact that he had a Muslim name and not his national or ethnic origins, that was at issue. I find therefore that the respondent has not indirectly discriminated against the complainant on the race ground.
7.3 I am satisfied that a) to c) above are required by Community Law as it is difficult to see how the objectives of the Regulation could be achieved without them. Accordingly, by virtue of Section 14 of the Equal Status Act, they are not prohibited by that Act. In relation to d) to f) the respondent required the complainant to provide information for transmission to the US for screening, with no direct access to any mechanism in Ireland for establishing his identity. The respondent argues that this is necessary as its US base is the centralised office for global transactions and the staff members there are highly trained and professional at carrying out the necessary checks.
7.4 I am satisfied that requirements d) to f) are not required by EU law and are not therefore exempted under Section 14 of the Equal Status Act 2000. Article 6 of the Regulation cannot apply to these requirements. The question then remains as to whether the obligation to comply with requirements d) to f) is "reasonable in all the circumstances of the case".
7.5 The respondent is bound under Irish law not to engage in practices which are likely to have an indirectly discriminatory impact. It seems obvious that automatically blocking any transfer of cash to a person with a name which is any combination of the names Mohamed Haji Hassan, which are all common Muslim male names, is a good compliance with the Regulation but will also have the unintended effect of making it awkward for many Muslim customers who have absolutely no connection with terrorist activity to carry out perfectly legitimate cash transfers. Indeed, it is likely to cause considerable offence to such customers. One would expect that the respondent would have anticipated this problem and put in place a procedure which recognised both types of situation and responded in a proportionate way to both. It seems unreasonable to put legitimate customers in a position where they are obliged to deal directly with the US (which puts them to unnecessary expense and stress), where they do not have a direct face to talk to and where they have no way of invoking expert local authorities such as the competent authorities to help in establishing their correct identity. Furthermore one isolated transfer of sterling £50 does not look like the most likely illicit terrorist transaction. While the respondent was still obliged to check it under the Regulation, the procedures adopted could, for example, have recognised that, where there was not an exact name match and the transfer amount was low, that this was a pretty low-risk transaction, as envisaged by the 2005 guidelines (4) .
7.6 The respondent operates globally and has established agencies in many countries. It has established a European Regional Operations Centre and states that regular consultations take place with unspecified "regulators" at EU level. Despite such stated consultations and the repeated claims that it froze the transfer of funds to the complainant in strict compliance with the laws enacted by the actual regulators, the respondent transmits data to its US based headquarters for convenience, citing risk control factors and the cost of its corporate transaction verification system. I am not satisfied, given the extent of the respondent's activities worldwide, that the transaction could not have been cleared within this jurisdiction by suitably trained staff with ready access to the competent authorities who deal with these security issues on an ongoing basis.
7.7 It is clear from communications, immediately preceding the Hearing in this matter,
between the competent authorities in Ireland and the respondent that the authorities are willing to assist in any way they can in interpreting and applying the requirements of the Regulation and that the respondent can readily refer matters such as those arising in this case to these authorities or other agencies dealing with security issues and the EU Commission. Instead, for what the respondent described as commercial convenience, the respondent elected to establish procedures for clearing frozen transactions which do not adhere to the requirements of the Regulation. The respondent further indicated that no consultation regarding the practical application or operation of the Regulation had taken place with the designated competent authorities in Ireland because those authorities are "not regulators". The Regulation does not provide the respondent with the option of deciding whether they will engage with the competent authorities, it requires that they do so. Specifically, Article 5 of the Regulation requires that "any natural or legal persons, entities and bodies shall provide immediately any information which would facilitate compliance with this Regulation ............. to the competent authorities of the Member States (my emphasis)............ where they are resident or located". The clearance of the transaction in question therefore was clearly a matter for the Irish competent authorities.
7.8 I am satisfied (i) that it would be entirely reasonable that the respondent would establish procedures, under the guidance of the local competent authorities in the member States in which it operates, for the implementation of the requirements of the Regulation and (ii) that the procedures currently applied by the respondent are arbitrarily imposed and are not reasonable in all the circumstances of the case. I find therefore that the respondent has indirectly discriminated against the complainant on the religion ground.
8 Decision
I am satisfied (i) that the respondent has not directly discriminated against the complainant on the race or religion grounds (ii) that the actual freezing of the funds transfer to the complainant is, as a matter of fact, in compliance with Council (EC) Regulation No. 881/2002 and therefore comes under Section 14 of the Equal Status Act 2000 (iii) that the respondent has not indirectly discriminated against the complainant on the race ground and (iv) that the respondent has indirectly discriminated against the complainant on the religion ground. I hereby order that the respondent pay to the complainant the amount of €4,000 for the effects of the discrimination.
______________________________
Dolores Kavanagh
Equality Officer
1 March, 2006
Notes
(1) See also Igen Ltd.V Kay Wong and Chamberlin Solicitors v Ms. I Emokpae and Brunal University v Ms. Gurdish Webster (Equal Opportunities Commission, Commission for Racial Equality and the Disability Rights Commission - interveners), ref EWCA Civ 142 [2005] Cases No: A2/2004/1141, A2/2004/1397, A2/2004/2758.
(2) The designated Irish competent Authorities under Council (EC) Regulation 881/2002 are (i) The Department of Foreign Affairs and (ii) The Central Bank & Financial Services Authority of Ireland
(3) Section 3.1.c Equal Status Act 2000 refers as the freezing of funds occurred on 16 October 2002
(4) Criminal Justice (Terrorist Offences) Act 2005, Guidance on The Offence of Financing of Terrorism and the Financial Sanctions Regime for Bodies Designated Under Section 32 of the Criminal Justice Act, 1994.