July 30, 2014

Steps Iranians Can Take to Avoid Unwarranted Bank Account Closures

NIAC Banking Infographic
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Recently, there have been increasing numbers of cases in which US banks, citing US sanctions on Iran, have either closed or restricted the accounts of both Iranians based in the US and Iranian Americans who travel to Iran. This is the result of either poor legal advice provided to banks regarding sanctions compliance or the result of the increased scrutiny of accounts held by Iranian nationals, combined with extreme caution on the part of banks.

NIAC has and will continue to work with banks and the US government to fully resolve this issue. In the meantime, we would like to provide some precautionary measures that Iranians and Iranian Americans can take to help ensure they do not run into this problem.

For Persian translation of this document, click here.

(1)  For Iranian nationals who are not US citizens, make sure your bank has timely, accurate information regarding your current place of residence, including any identification showing US residence.

Under US law, US banks are prohibited from providing services to “ordinary residents in Iran,” except when those “ordinary residents” are not in Iran. In other words, if you are an Iranian student who is a resident of Iran but presently based in the US, US banks can provide their services to you only as long as you are outside Iran.

However, when US banks have uncertainty as to whether an Iranian customer is still based in the US or if the customer may have returned to Iran, they have increasingly decided to close or restrict the customer’s bank account. That is why, for instance, Iranian students studying in the US who may not have a fixed US address or US identification on file with their bank have been most affected by banks’ cautious approach.

The best thing Iranian nationals who are not US citizens can do is to make sure that your bank has timely and accurate information of your current place of residence, so as to minimize the chances that they will pick up your account during their periodic screens. Providing identification that details your residence could be helpful to assuage bank concerns about your location at any given time.

(2)  Do not initiate a transaction or access your bank account when in Iran.

Under US law, US banks are prohibited from servicing your account when you are accessing your account or initiating a transaction from Iran. If you attempt to do either of these two things while in Iran, the transaction will be rejected and your bank will likely place a restriction on your account. That restriction will likely only be lifted when you provide information to the bank’s satisfaction that you are no longer in Iran and are not ordinarily resident in Iran.

You should not access your account or initiate a transaction from your account when in Iran. However, it is important for you to know that US banks should not restrict your account when you simply travel to Iran. As long as you are not ordinarily resident in Iran and you do not access your account while in Iran, you should be able to travel to and from Iran without any problems arising with your US bank account.

(3)  If your bank account is closed or restricted, you have options.

Having your bank account closed or restricted is a major inconvenience, and for some (including Iranian students studying in the US), much more than that. However, it is important for you to know that you have options if your account is restricted or closed by your bank.

Typically, your bank wants proof of US residence. If you can provide this to your bank, your bank will likely lift the restriction or reopen your account.

If not, though, it is important to remember that your account is not “blocked”. You can take all your funds in your bank and transfer them elsewhere.

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