Bank account for charity with non-UK trustees

aroominyork

The charity I work for has just transitioned from an unincorporated association to a CIO, with a small change of name. Good practice is to set up a new bank account. We are an international organisation with six non-UK trustees (including Chair, Bulgarian) and two UK trustees (including Treasurer). We are with HSBC and are happy to stay there for the new account.

After seeming to approve the new account in principle - HSBC were asking trustees to complete paperwork although, frustratingly, they could only write to one at a time - "following further review" they rejected the application due to their "cross border policy". Our second UK trustee has a  contact in HSBC and asked her for assistance; she checked with colleagues and then said we could make a new application but would need all trustees to come to the UK for KYC. I asked her whether they could go to an HSBC branch in their country, to which she replied that if it’s done in their home country it will need to be attested by a notary.

That seems curious; why need a notary if you can go into a branch? And if does feel like it could easily be rejected again during the process. Does anyone have any experience of this situation and/or useful advice?

General_Grant

Do all trustees need to be able to instruct the bank (sign cheques, etc)?
If only UK trustees were authorised to instruct the bank, would the bank still want information from the overseas ones?

aroominyork

Probably three would have signing authorities - most likely the office holders (Bulgaria, UK, Cyprus) - but the bank still needs to verify them all.

General_Grant

Does your charity have a financial control policy or similar document?  Does it stipulate how many people are needed to authorise payments? 

aroominyork

On this same question of opening a bank account for a charity that has a majority of non-UK Trustees: we were advised (off the record by a major bank) that we could pass KYC if we have at least 50% UK Trustees while opening the account, for example by adding four UK Trustees so that we then have six UK alongside our existing six non-UK Trustees (our constitution allows for a max of 12 Trustees). Once the account is open, those four step could down to restore the status quo ante. Does anyone have experience of or see problems with this?

Trustees also thought about opening an account outside the UK. This seems fraught with complexity, including that we would need a GBP account with resultant charges. My question is whether a major bank in a more 'accommodating' country would look at opening an account for a UK charity that could not open the account it wants in its own country?

aroominyork

I think we've found a solution. CAF Bank are happy to open accounts for charities with majority non-UK trustees. Good that the Charities Aid Foundation is able to respond to the realities of our sector. 

General_Grant

aroominyork said:

I think we've found a solution. CAF Bank are happy to open accounts for charities with majority non-UK trustees. Good that the Charities Aid Foundation is able to respond to the realities of our sector. 

Will the overseas trustees be able to be online signatories?  Presumably you will need two people to sign off online payments (and I noted you have two UK-based trustees).

Mands

aroominyork said:

Probably three would have signing authorities - most likely the office holders (Bulgaria, UK, Cyprus) - but the bank still needs to verify them all.

I live in Cyprus and have recently registered a LPA with HSBC UK. 

As of last month they absolutely had a process for dealing with KYC for customers who do not have a branch in their country. They operate a specialist unit (the South Africa overseas team, I think!) which deals with this. Via that team I was able to submit ID paperwork and then confirm my identity over a Zoom call. 

It sounds like you've found a better solution but I mention this in case it's of use to someone dealing with a similar issue. 

Mands