Report finds lack of recourse for Canadians affected by bank de-risking over alleged terrorist-financing risks

A new report by the International Civil Liberties Monitoring Group says non-profit organizations and individuals whose banking services are cut off over alleged terrorist-financing risks have little meaningful recourse in Canada.

The report says banks and financial service providers often make opaque, risk-avoidance decisions without providing evidence or clear explanations. Muslim-led charities, international humanitarian organizations and groups connected to countries such as Syria, Palestine and Pakistan are among those most affected.

The consequences include account closures, suspended donations, exclusion from payment processors, disruption to humanitarian programs and the cancellation of personal banking services for employees, board members and their families.

The group says de-risking is a systemic problem linked to Canada’s anti-money laundering and anti-terrorist financing framework, rather than isolated decisions by individual banks. It is calling for greater transparency, case-by-case assessments, formal opportunities to respond and independent review mechanisms.

The report cites cases involving a $400,000 donation flagged months after receipt and a charity whose banking relationships were severed after a news article falsely linked it to terrorist entities. In the latter case, the charity executive and spouse also lost access to personal accounts, RRSPs and credit cards, with no meaningful remedy despite the article’s retraction.

The Canadian Bankers Association says banks take account closures seriously and make decisions independently based on applicable laws, regulations and institution-specific factors. The monitoring group says concrete policy changes are needed.