apparently in the belief that it is required to do so by sanctions on Iran.
But TD has said next-to-nothing about its actions, leaving account holders wondering what is going on. Some only learned what had been done to them when they tried to make a credit card purchase and learned their card wasn’t being accepted any more.
No other bank in Canada has been reported closing any Iranian-Canadian accounts. And the Canadian government sanctions do not require any such action.
About five years ago, another Canadian bank took similar actions against Iranian-Canadian bank holders thinking that US sanctions required it and fearing that its American business might be undermined if it didn’t’ stop doing business with Iranians in Canada. That was soon corrected.
The lack of communication from TD has frustrated many Iranian-Canadians who are unable to get simple questions answered.
Nazanin Afshin-Jam, the beauty queen, human rights activist and wife of Canada’s defense minister, said friends of her father in Vancouver had seen their accounts closed despite living in Canada for decades and having no ties to the Iranian government.
She said she believes TD “unintentionally misinterpreted” the legal mumbo jumbo in Canada’s sanctions law.
Afshin-Jam said it was proper that the flow of funds between Iran and Canada be monitored closely, but that intervention should only come when large sums are being transferred that could benefit the Iranian regime. She said citizens sending small sums to their families in Iran should not be hassled.
The Vancouver Province reported the details of one closure. The family said its accounts were closed last month. After that, the family received a letter telling it its accounts were being closed. The 67-year-old father of the family travels to Iran periodically and has checked his accounts online from Iran. But the family says he has made no funds transfers between Iran and Canada in five years.
The family said it was told two lines of home equity credit must be paid off in 60 days or the bank will foreclose. It was told it has two years in which to pay off mortgages held by the bank. “We felt angered and discriminated against,” one member of the family said, “because we have been Canadian citizens for 14 years.”
The closures apparently started in May but only came into public view July 6 when the Ottawa Citizen wrote a story about them.
A few days later, TD said it was required to comply with Canadian banking laws and regulations, including economic sanctions. It said it did not take lightly the decision to close a customer account, which causes it to lose revenues.
Eleven days after the closures came to light, TD Bank Group said Tuesday it will “reach out” to Iranian-Canadian clients whose accounts were closed, possibly leading to the restoration of some accounts.
The Ottawa Citizen report of July 6 said TD had sent letters to clients whose accounts it had closed. The letters told clients that under recent changes to the Special Economic Measures (Iran) Regulation, Canadian financial institutions were forbidden from providing financial services to anyone in Iran or for the benefit of Iran.
The Canadian Bankers Association told the Citizen it is up to each bank individually to ensure compliance with the economic sanctions against Iran.
TD began sending the letters to Iranian-Canadians as early as the beginning of May, according to some of those who received them. The bank said it tried to contact customers who were affected by the regulations, and, in cases where they did not hear back, was forced to close their accounts.
The bank said Tuesday it would now try to reach out to those account holders it had not heard from.
“One of the things that we have been hearing from the media is what were some of the criteria we used to exit some of these customer relationships?” said TD Bank Group spokesperson Mohammed Nakhooda. “For those customers who did not respond to our calls and letters, we will reach out to them again in the next 30 days to confirm or update their information. And in some cases, depending on the information we obtain, this might lead to the banking relationship being restored.”
Until Monday, Nakhooda said, TD closed the accounts of any client who provided financial services to anyone in Iran or for the benefit of Iran. That would mean that anyone in Canada who sent a $25 birthday check to a nephew in Tehran would have his or her TD account closed.
As of Tuesday, Nakhooda added that any client who “provided and retained an active residential or employment address in Iran” was also identified in the “small pool of customers” whose accounts were closed. He did not give any number to define that “small pool” to suffer account closures.
TD Bank Group has agreed to meet with the Iranian Canadian Congress (ICC) to discuss the closures next week, according to ICC Vice-President Kaveh Shahrooz. That may provide more information.
Section 5 of Part D of the Canadian sanctions regulation lists transactions that are not barred by Canada’s sanctions. These include financial services provided or acquired before November 11, 2011, pension payments to or from Iran, and non-commercial financial services under $40,000 as long as there is a record of the transaction. That would appear to exempt the standard kind of family financial exchanges, as long as there is a legal record.
For Montreal lawyer Vincent Valai, former president of the Association des Juristes Persans du QuÈbec, an organization that has criticized TD’s actions, the failure to recognize these exemptions is the most puzzling part of TD’s closures.
Last week, the Iranian embassy in Ottawa called the TD bank account closures “discriminatory” and said political problems between Canada and Iran should not affect the Iranian community in Canada.
TD has not said how many accounts have been closed; reports say closures have been reported in Ottawa, Montreal, Toronto and British Columbia.
As affected Iranian-Canadians continue to search for answers to the account closures, TD maintains its stance on its interpretation of the sanctions. “We’re confident we correctly applied the sanction regulations in this situation,” said Nakhooda.
He didn’t explain why TD’s interpretation was different from other banks in Canada.