Iranian Students in U.S. Hit by Discriminatory Banking Sanctions
At least twenty-two Iranian students have been notified by TCF Bank that their university-linked bank accounts were being terminated. NIAC has called for the decision to be reversed.
Washington, DC - Financial sanctions purportedly aimed at Iran’s government may yet again be taking a toll on ordinary Iranians, this time punishing Iranian students studying in U.S. universities.
Students and faculty at the University of Minnesota have reported that at least twenty-two students have been notified by TCF Bank that their university-linked bank accounts are being terminated. The bank provided no further explanation for the action, but it soon became clear that the students had one thing in common: they are all Iranian.
As U.S. and E.U. sanctions on Iran have ratcheted up over the past three years, they have had a significant chilling effect on even perfectly legal transactions. For instance, many banks have decided it is not worth the risk to facilitate payments for the sale of medical goods or food to Iran or to send family remittances, even though these items are technically exempt from sanctions. Testing services required for Iranian students to study abroad, such as Educational Testing Service’s TOEFL test, have been intermittently suspended and plagued by problems in facilitating payments. And many Iranian students are increasingly reporting hardship in paying their tuitions at U.S. schools because sanctions have closed off channels for legally receiving money from family in Iran.
However, while financial sanctions have have convinced many companies and banks to take an overly broad view of the restrictions, U.S. law protects against discrimination on the basis of national origin. So, while many banks have decided it is not worth the risk to engage in business related to Iran, they are not permitted to profile individuals in the U.S. based on their race, ethnicity, or national origin.
In a meeting setup between the students and the TCF Bank’s representatives, facilitated by the university, the representatives claimed that the closures were triggered by “irregularities” in transactions that had been detected by the bank’s monitoring software. However, the fact that all of the students received the notices on the same date, and some had never engaged in international transactions, raised doubts about the bank's explanation. At least one of the impacted students even said their account had been completely inactive for over a year.
In a letter sent today, National Iranian American Council called on TCF Bank to reverse its decision and ensure its policies do not discriminate against Iranians. NIAC noted that, even though there are significant financial sanctions against Iran, there is no law justifying the closure of bank accounts of Iranian students on the basis of their nationality. Such action, NIAC wrote, would constitute discrimination from which all persons in the United States--regardless of nationality--are protected.
Broad sanctions against Iran have led to over-enforcement and misapplication that has manifested at times in the form of profiling and discrimination. Last year, a number of Iranians and Iranian Americans reported that Apple Store employees were refusing to sell items to them and profiling on the basis of their language or national origin. Isolated cases of banks refusing to open accounts for Iranians have been reported over the past year as well. And, in perhaps the most sweeping case, TD Bank in Canada unilaterally closed the accounts of individuals with Iranian last names last summer. Eventually, public backlash led the bank to reverse that decision.