TD Bank Closing Some Customer Accounts to Comply with Economic Sanctions Against Iran
Contributed by Ottawa Citizen
A major Canadian bank has begun to close the accounts of some of its customers to comply with new federal regulations that govern economic sanctions against Iran.
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TD Bank Group has confirmed it has been sending letters to clients telling them under recent changes to the Special Economic Measures (Iran) Regulation, Canadian financial institutions are forbidden from providing financial services to anyone in Iran or for the benefit of Iran.
That appears to include any use of an account to send or receive money via wire transfer to or from friends and family in Iran.
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So far, it seems no other Canadian bank has taken similar action, but TD Bank Group spokesperson Mohammed Nakhooda said the bank is simply following regulations set out by the Canadian government.
A CIBC spokesperson said the bank has frozen some accounts in compliance with federal regulations.
But CIBC does not appear to have gone to the same lengths as TD. Officials from other banks were not available for comment Thursday.
TD said it tried to contact customers who were affected by the regulations, and in cases where they did not hear back, the bank was forced to close their accounts, Nakhooda said.
In no way is TD targeting the Iranian Canadian community,” Nakhooda said Thursday. “We are simply following regulations set out by the sanctions.”
According to the Iranian Canadian Congress, many Iranian-Canadians across Canada have received these letters.
One of them is an Iranian-Canadian woman from lower British Columbia who received a letter June 28. The Citizen has agreed not to publish her name.
After attempting to use her TD debit and credit card at a dollar store on June 27, the woman said she learned that all of her accounts had been frozen. When she went to her local TD branch to find out what was happening, she said she faced a day-long runaround that resulted in no clear answers.
The next morning, the woman continued to call TD’s head office in Toronto. That afternoon, she did receive a call telling her the reason for the account closure.
“They said that, ‘Yes, because of the new economic sanctions against Iran, the accounts had been closed.’”
The woman, who is a Canadian citizen, was confused why she had been “targeted.” Although she has family in Iran, she claims they have no political affiliations with the Iranian regime and she never sends money to the country. She did, however, concede that her family in Iran recently wired a large sum of money to a Canadian family member.
On June 29, she was told her account would be reopened after the Canada Day long weekend. But that never happened, and as of Thursday evening, the woman’s two credit cards, line of credit, mortgage and debit account with TD were all still closed.
She can still access her money through bank drafts, but says she is nervous handling large amounts of money in this way.
The woman said her family will not attempt to reopen the accounts with TD, and are looking to move to another bank.
“I feel betrayed and frustrated,” the woman said. “After 10 years of living in Canada, this is an absolute disgrace to me.”
Kaveh Shahrooz, vice-president of the Iranian Canadian Congress. said the ICC became aware of the
letters a couple of months ago, although reports of more letters have increased in the past few weeks.
The ICC could not specify how many Canadians it has heard from, but said it is now starting to receive two to three reports from Canadian-Iranians a day.
“These are people’s livelihoods,” said Shahrooz. “They’re worried that if they can’t do banking with TD, they can’t do banking with any other bank out there.”
The Department of Foreign Affairs was not able to confirm Thursday what specific changes to the Canadian sanctions against Iran led to the closures of the banks accounts.
However, Shahrooz said he believes the closures may have something to do with the January 2012 expansion of Canada’s sanctions against Iran. The changes, announced by Foreign Affairs Minister John Baird on Jan. 31, added five entities and three individuals to the list of designated people whose assets were frozen.
“Our organization is very sensitive to the idea of the importance of making sure that the Iranian government doesn’t use the banking system here in Canada to further its goals,” said Shahrooz. “But at the same time we are very concerned about the overzealous application of this sanctions regime may harm innocent people.”
The ICC will hold a meeting in Toronto Saturday for members of the Iranian-Canadian community whose accounts have been closed by TD. The purpose of the meeting is to gather relevant information from those affected so the group can take the appropriate steps of action.
Those affected have taken to social media websites to express their concerns. A Facebook page titled “Condemn TD Bank in their Treatment of clients with Iranian Background” has more than 70 likes and a number of posts from users saying they known of Iranian-Canadians whose TD bank accounts have been closed. Twitter users have also been reporting account closures, with one user even posting a portion of the letter from TD online.
Letter recipients are given a date by which their accounts and services with TD will be closed. They are then instructed to contact Foreign Affairs to apply for a permit to carry out future transactions prohibited by the regulations.
Foreign Affairs did not having anything to say about the changes to the sanctions or TD’s letters as of Thursday evening.
According to the ICC, it appears that only TD is sending out the letters at this time. TD could not confirm whether any other banks were sending similar letters to clients.
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