Diplomats from 15-20 countries are unable to open bank accounts that they need to perform their basic diplomatic roles, ET has learnt. Officials from some African and Caribbean countries and India are among those affected by the new rules, which seek to prevent scandals like an alleged attempt by Qatar to influence policy making at the European Parliament.
There is anger among diplomats who see Belgium’s actions as “absurd”, highly placed sources told ET. Such actions could even paralyse diplomatic relations between Belgium and other countries, they said. New Delhi has raised the issue with Brussels.
ET has learnt that Brussels is now pushing banks to provide basic banking services to the diplomats from next year in what the Belgian government is claiming will provide the necessary relief. This will be applicable for diamond traders as well, it has been learnt.
A Belgian foreign ministry spokesperson told ET that it had for more than two years been receiving reports of difficulties from diplomats and embassies of countries “of all regions without distinction” in closing bank accounts. “Given the various complaints and the fact that a non-binding memorandum negotiated with the financial sector (Banking Practices Guidelines for Foreign Diplomatic Missions in Belgium) did not seem to fully meet the set expectations, the Belgian ministry of economy has worked on an adaptation of the law introducing provisions on the basic banking service for companies. The amended law should be published in the coming days, this should resolve the reported issues,” the spokesperson said.
Sources suggested that unless the Belgian government resolved these issues, some governments were contemplating reciprocal measures. India may also be contemplating counter measures against Belgium, sources hinted to ET.
Under the Vienna convention, the host government must allow smooth functioning of diplomatic missions, a source said. Belgium cannot shy away from its responsibility under the plea that it is a private bank’s prerogative, this person added.
ET OnlineET has learnt that many European missions in New Delhi deal in extraordinary high levels of cash in India. But Indian banks have never imposed limits on cash withdrawals. “The action by Belgium is akin to racism,” a person said.
Authorities in Belgium arrested four people on December 9 under suspicion of having received alleged favours from Qatar as part of efforts to influence decision-making at European Parliament. Qatar has denied any wrongdoing.
In 2015, the EU had passed a directive against money laundering and financing terrorism that Belgium passed into law. The rules force banks to know why an account is being opened, who is the holder of the account and what type of transactions are being carried out. Under such requirements, banks can probe suspicious transactions. Banks also must adopt additional measures if transactions are linked to a member of the European Parliament or if an account is attached to certain countries or regions in the world. This would mean the banks would employ additional checks if the account is linked to an embassy.
Embassies of countries including Cameroon, Mozambique, Djibouti, Trinidad and Tobago, Ghana, Kenya, the Central African Republic and Cabo Verde have been affected, according to a report by Politico, a European media house. These embassies are not being able to function smoothly, ET has learnt from diplomatic sources. There are reports that the Belgian foreign ministry has requested the country’s financial sector to serve the foreign diplomats, but this had limited impact.
The alleged financial scandal involving Qatar may not make it easy for the diplomats to get relief from the Belgian banks.
