Complainant

Respondent

Parties

Ehsan  Sooudi

Bank of Ireland

Representatives

none 

 Fieldfisher Solicitors

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000

CA-00029129-001

18/06/2019

Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000

CA-00029129-002

18/06/2019

Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000

CA-00029129-003

18/06/2019

The first two complaints relate to an application by the complainant for a loan to purchase a car. After his loan application was approved, the complainant paid the deposit to the car dealer, assuming that BOI would pay the approved loan.

However, the drawdown of the loan did not happen and he was told by the respondent that the money would not be paid until a form which he says is discriminatory was signed.

The third complaint concerns money transfers made to an account In the UK through the online banking system to his UK bank account which were not processed and were refunded.

Signature of the same form is a factor in this complaint also.

Specific Complaint CA-00029129-001

The details of the actions by the bank that the complainant says are discriminatory are:

a)       BOI denied the drawdown of an approved personal loan (motor loan) application made by the complainant due to his country of birth.

b)      BOI asked the complainant to sign an additional form for drawdown of the loan.

This form is a discriminatory declaration and has terms that breach statutory and fundamental rights of the complainant as personal banking customer on the ground of his race (country of birth of the applicant).

This form was not mentioned in the offer letter that the complainant received. This whole process has caused huge amount of stress and distress to the complainant and his family.

Specific Complaint CA-00029129-002

This relates to the same transaction and the complaint is that BoI declined to pay the vendor.

The car was purchased by the complainant, through an approved Hire Purchase Agreement (HPA) but BoI asked the complainant to sign an additional form for drawdown of the loan. This form is discriminatory on the same basis as set out above. 

The complainant says that he has been treated differently by BoI and the car dealer confirmed that this was the first time it had come across a person being asked to sign such a form. 

The complainant and his family have gone through a huge amount of distress as a result of the respondent's BOI’s actions in relation to the loan and the HPAs.

The complainant has felt humiliated, discriminated and also his reputation was damaged in front of others such as the dealer.

Specific Complaint CA-00029129-003

The complainant made small money transfers through the online banking system to his UK bank account.   BOI then returned and refunded these transfers.

BOI did this without informing or contacting the complainant if there were any questions regarding these transactions. He then used his UK bank’s debit card for travel expenses while in the UK.

He says that he has been treated different from others due to his nationality

The complainant has been a good customer of the respondent for eleven years and has been extremely upset by these events.

The decision by the Respondent to decline the transactions was a commercial decision made pursuant to the Terms & Conditions attaching to the accounts and was not grounded on the Complainant’s race or nationality.

The Respondent is obliged to comply with legal and regulatory obligations including the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018;

The Respondent was entitled (and obliged) to carry out ‘Enhanced Due Diligence’ (EDD) in respect of the Complainant’s application for finance and is entitled to rely on the contractual provisions in its Terms & Conditions in respect of all its account holders.  No discriminatory acts occurred.

Complaints CA-00029129-001 and 002 relate to the same facts and these can be combined and the substantive argument dealt with together as a single complaint (the “Hire Purchase Agreement complaint”).

The service in question (the Hire Purchase Agreement) was available to the Complainant.

He was not denied the service, but he chose not to provide information and documentation legitimately and necessarily sought by the Respondent pursuant to its EDD procedure. This is provided for by Section 39 of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 (as amended).

The request for the Complainant to sign the Information regarding Sanctions in the context of the Hire Purchase Agreement was lawful and justified and was not discriminatory.

The Complainant sought to enter into a Hire Purchase Agreement (HPA) to buy a car. The finance was to be provided by the Respondent. Having undertaken a formal assessment of the Complainant’s application for finance under the HPA, the Complainant’s application was subjected to EDD by the Respondent.

This is required for all customers or potential customers identified during the risk assessment process as having links to a country with a higher risk profile.

This required contact to be made with the Complainant to request certain information including completion of a form entitled “Information regarding Sanctions” and certain other documentation. 

On March 15th 2019, the Complainant queried the requirement to complete the “Information regarding Sanctions” leaflet in email correspondence with his branch.

Meanwhile the purchase of the vehicle was agreed and a Consumer HPA with the Respondent was finalised on 25 March 2019.

However, the complainant was told that the ‘Information regarding Sanctions’ leaflet would be required by the Respondent in order to complete the Loan Application and confirmed that this was a

requirement under the Respondent’s Policy.

The Complainant did not provide the required documentation and his application for finance with was declined and withdrew the application and went elsewhere.

The Complainant made a formal complaint on the Respondent’s complaints handling system on April 12th  2019. He was sent the report of the investigation on 16th April 2019 and it was not upheld.

The Sanctions Leaflet referred to above sets out that its purpose is to “is to provide [the Accountholder] with information in respect of [the Respondent’s] requirements regarding comprehensive sanctions in place against Iran, Syria and North Korea.”

The Leaflet then seeks an acknowledgement from the Accountholder as to their understanding of the information contained in it which outlines the Respondent’s position in respect of Iran, Syria and North Korea.

As part of its EDD process, the Respondent may require that all actual or potential customers (regardless of their nationality) identified during the risk assessment process as having a higher propensity of links to Iran complete the Leaflet where a customer relationship is considered to be of higher risk under the legislation and regulations which the Respondent is subjected to.

In line with its legal requirements to perform EDD on the Complainant’s application, the Respondent adopted a position that the Leaflet was necessary in the circumstances.

The Respondent’s requirement for completion of the Information regarding Sanctions Leaflet is not unique to the Complainant. It is required as part of the suite of account documentation for all new and existing customers meeting the above criteria. It is only by performing EDD that the Respondent can fulfill its obligations in this regard.

Failure to do so may result in a potential breach by the Respondent of EU legislation or U.S. law which could lead to the imposition of significant penalties.

 The Criminal Justice (Money Laundering & Terrorist Financing) Act, 2010 places obligations on the Respondent to assess and manage Money Laundering/Terrorist Financing and Financial Sanctions risks of every new and existing customer.

Assessing this risk enables the Respondent to apply the appropriate customer due diligence measures and to monitor each customer as required. 

A Money Laundering/Terrorist Financing and Financial Sanctions risk assessment (using pre-defined risk assessment calculators) is undertaken prior to entering into any customer relationship and on an ongoing basis throughout the duration of any customer relationship.

All customers (or new applicants) who, following a risk assessment, are identified as having links to Iran, Syria and North Korea are subjected to Enhanced Due Diligence (“EDD”). For those customers or applicants presenting with a greater likelihood for links to Iran, Syria and North Korea, the EDD for such customers will include additional measures.

A link to Iran, Syria and North Korea in this regard includes being born in these countries.

The Complainant first opened an account with the Respondent in 2008 at a time when the legal and regulatory framework in which the Respondent operated was markedly different. For example, the account was opened before the imposition of the international sanctions’ regimes against Iran and prior to the coming into force of the CJA.

The Central Bank of Ireland (CBI) can fine banks for contraventions and breaches of the CJA 2010.

It is a matter of public record that in May 2017, the Respondent was so fined €3.15 million by the CBI for failures relating to risk assessments, customer due diligence and suspicious transactions reports. This fine related to an inspection undertaken by the CBI in 2013 and in the published settlement the then Director of Enforcement (now Director General, Financial Conduct) stated:

“Financial services firms have a duty to protect, not only themselves, but also the wider financial system, from money laundering and terrorist financing. The everchanging nature of the risks presented by money laundering and terrorist financing, require financial services firms to continuously monitor and enhance the systems and controls they use to combat money laundering and terrorist financing.

The high volume and range of breaches uncovered as part of the Central Bank’s investigation into Bank of Ireland point to significant weaknesses in the strength of Bank of Ireland’s implementation of anti-money laundering and counter terrorist financing legislation. Such behaviour is unacceptable and falls far short of the standard expected of one of Ireland’s largest retail banks."

Since then the Respondent has completed an Improvement Programme to address the issues identified and remains conscious of the need to ensure compliance with its money laundering, counter terrorist financing and strict sanctions obligations.

The application of EDD to the Complainant’s application was required by the Respondent to comply with its legal obligations regarding the detection and prevention of money laundering, terrorist financing and bribery and corruption; and procedures designed to ensure that the Respondent complies with its legal and regulatory obligations in respect of financial sanctions arising from a restrictive international sanctions regime.

The application of EDD by the Respondent was not prohibited conduct and was fair, proportionate and objectively justified having regard to the Complainant’s circumstances and the Respondent’s legal obligations.

Section 38A (1) of the Equal Status Act 2000 (as amended), states as follows "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."

The subsequent decline by the Respondent of the Relevant Transactions, in circumstances where insufficient information was available to the Respondent so as to allow an appropriate level of due diligence therein, was not prohibited conduct and was fair, proportionate and objectively justified having regard to the Complainant’s circumstances and the Respondent’s legal obligations.

In addition, the Respondent asserts that the Complainant has not made out a prima facie case of discrimination in respect of Complaint Ref: CA-00029129-3 and that the burden of proof has not been established. Section 38A (1) of the Equal Status Act 2000 (as amended), states

Where in any proceeding’s 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.

The Respondent is of the view that the Complainant has failed to meet the burden of proof as set out in Section 38A(1) in establishing a set of facts from which it may be presumed that prohibited conduct has occurred in relation to him.

If the requisite burden of proof has been met, the Respondent denies that the Complainant was treated less favourably than another person of a different race or nationality is, has been or would be treated in a comparable situation.

The decision by the Respondent to decline the transactions was a commercial decision made pursuant to the Terms & Conditions attaching to the accounts and was not grounded on the Complainant’s race or nationality.

The Respondent is obliged to comply with legal and regulatory obligations including the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018.

The Respondent was entitled (and obliged) to carry out Enhanced Due Diligence in respect of the Complainant’s application for finance with the Respondent.

The Respondent is entitled to rely on the contractual provisions as set out in its Terms & Conditions in respect of all its Accountholders, including the Complainant No discriminatory acts occurred.

The respondent rests its case on the fact that the due diligence it applied to the complainant’s accounts was fair and was not prohibited conduct.

It says that it was proportionate and objectively justified having regard to the facts known about the complainant’s ‘circumstances’ and its own legal obligations. By ‘circumstances’ in this case is meant his country of birth; Iran.

Those obligations are set out extensively and sourced in its submission. They are onerous and failure to do so carries the risk of severe penalties as is pointed out there.

They are not some minor bureaucratic or administrative requirement arbitrarily applied to its customers and as may have been perceived by the complainant to be on the basis of his national origin.

It should be noted (and indeed the respondent did so at the hearing) that the complainant is an eminently respectable person to whom no individual suggestion or suspicion of wrongdoing can be attached.

The complainant is a native of Iran but has been an Irish citizen since 2016. He has a PhD degree from an Irish university and is currently working as a Senior R&D Engineer in a multinational company.

His wife is also a citizen of Ireland (through naturalisation), born in Iran, and she too has a PhD from the same university and is a lecturer in a third level college of technology who has worked and lived continuously in Ireland since 2009. The complainant has one child who is born in Ireland and has Irish nationality.

While the first two complaints create to the same transaction, all three complaints have their basis in the refusal of the complainant to sign the declaration required by the bank.

It is not hard to understand, at least the initial reaction of a person being asked to comply with a requirement such as that presented to the complainant in this case.

Once the basis for it became clear; i.e. that it was a legal requirement with its origins in domestic and international legal obligations and that it was not in any way selectively or arbitrarily aimed at the complainant in a personal way, then he was merely being asked to comply with a relatively simple declaration.

He declined to do so. He could have saved himself a great deal of trouble had he done so.

I find on the basis of the submissions of the parties that the respondent’s actions were objectively justified by the obligations placed upon it to comply with legal and regulatory obligations including the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018.

These actions were not discriminatory against the complainant on the basis of his nationality or race in breach of the Equal Status Acts 2000-2015.

Accordingly, the complaints are not well founded.

For the reasons set out above complaints CA-00029129-001, 002 and 003 are not well-founded.

Equal status, race, nationality, banking.