Who is Ari Ben-Menashe?
Ari Ben-Menashe is a controversial figure who has been involved in various international conflicts, espionage, and lobbying activities. He was born in Iran, but moved to Israel in 1970 and became a citizen. He claims to have worked for the Israeli intelligence agency Mossad, but the Israeli government denies this. He has been accused of arms trafficking, money laundering, and fraud in several countries, including the United States, Zimbabwe, and Australia. He currently lives in Montreal, Canada, where he runs a consulting firm called Dickens & Madson.
Why did the banks refuse his business?
In November 2023, Ben-Menashe filed a lawsuit against the Royal Bank of Canada (RBC) and the Bank of Montreal (BMO), alleging that they discriminated against him and violated his charter rights by closing his accounts without notice or explanation. He claimed that the banks were influenced by his political enemies, such as the Canadian Security Intelligence Service (CSIS) and the Canada Revenue Agency (CRA), who were investigating him for tax evasion and other offences. He also alleged that the banks were pressured by the United States government, which considers him a security threat.
The banks denied any wrongdoing and argued that they had the right to terminate their relationship with any client for any reason, as long as they complied with the law and their own policies. They said that they closed Ben-Menashe’s accounts because they were concerned about his high-risk transactions, his involvement in sanctioned countries, and his failure to provide adequate information about his business activities and sources of funds.
What did the court decide?
In February 2024, the Quebec Superior Court dismissed Ben-Menashe’s lawsuit, ruling that the banks did not breach their contract or act in bad faith when they closed his accounts. The court found that the banks had valid reasons to end their relationship with Ben-Menashe, based on their risk assessment and due diligence. The court also rejected Ben-Menashe’s claim that the banks violated his charter rights, saying that he did not prove that he suffered any discrimination or arbitrary treatment.
Ben-Menashe appealed the decision, but the Quebec Court of Appeal upheld the lower court’s ruling in April 2024. The appeal court agreed that the banks acted within their discretion and did not infringe Ben-Menashe’s rights. The appeal court also noted that Ben-Menashe did not provide any evidence to support his allegations of political interference or conspiracy.
What are the implications of the case?
The case of Ben-Menashe vs. RBC and BMO is one of the few examples of a Canadian court addressing the issue of bank de-risking, which is the practice of banks avoiding or terminating relationships with clients that they perceive as high-risk or problematic. Bank de-risking can have negative impacts on individuals and businesses that are excluded from the financial system, especially those that operate in conflict zones, humanitarian sectors, or marginalized communities. However, bank de-risking can also be seen as a legitimate and necessary measure to prevent money laundering, terrorism financing, and other illicit activities.
The case shows that Canadian courts are reluctant to interfere with the banks’ decisions on who they choose to do business with, unless there is clear evidence of illegality, bad faith, or discrimination. The case also highlights the challenges and risks that controversial figures like Ben-Menashe face when they try to access the financial system in Canada and elsewhere.
