January 31, 2013

Iranian Students Hit by Sanctions on Schools, Banks

Washington, DC – Iranian students are facing new obstacles to pay for college tuition and even to enroll in universities in the U.S. and Europe due to increasingly broad sanctions. 

A university in the Czech Republic recently notified an Iranian applicant that, due to EU sanctions, the school would not be accepting any Iranian students, in a letter publicized last week.

Another notice, obtained by NIAC, was issued by an American university stating U.S. schools operating programs abroad received specific guidance that they were no longer allowed to enroll Iranian students in math, science, or engineering classes above introductory levels and could not admit any Iranian graduate students or faculty without explicit U.S. government permission. The notice said the restrictions were the result of sanctions passed by Congress last year—purportedly aimed at Iran’s nuclear program and improving the human rights situation. The notice warned that these restrictions may also come into force within the U.S. as the law is implemented. This is in addition to new visa restrictions against Iranian students included in the sanctions bill.

Additionally, it was revealed this past week that TCF Bank, which in December notified at least 22 Iranians students at the University of Minnesota that their accounts were being closed, has been under investigation by the Treasury Department and fined $10 million for incomplete monitoring and reporting of cash transactions.

The revelation may provide clues as to why the bank moved to close dozens of accounts belonging to Iranian students in a potential act of discrimination.

Those closures, in conjunction with the Treasury investigation and penalty, may suggest the latest instance in which broad sanctions have raised significant risks and burdens on banks and companies engaging in legitimate transactions related to Iran. The pressures to enforce the broadening array of sanctions on Iran has created a  “chilling effect” in which many banks and businesses have opted to end these legal transactions, including the sale of medicine and humanitarian goods, the provision of Internet communication software, and now the operation of bank accounts to enable Iranian students to pay for their tuition and study in the U.S.

In addition to paying the fine, TCF announced they had beefed up their “compliance program aimed at monitoring, detecting and reporting suspicious activities, as well as its other legal and regulatory requirements.” However, according to the Treasury Department, the Iranian Transactions and Sanctions Regulations (ITSR) includes several exemptions to enable Iranian students to study in the U.S.

TCF Bank holds an exclusive contract with the University of Minnesota to sell checking accounts to students linked to their student ID cards and donated a $300 million football stadium, TCF Bank Stadium, to the school. But faculty members at the university notified the school administration that they would begin closing their TCF accounts and moving their mortgages to other banks in protest.

“We no longer feel comfortable having TCF be the responsible institution for our deposits,” wrote the faculty members in a letter to the university.

The apparent over-enforcement of sanctions in spite of legal exemptions aimed to protect against “unintended consequences” has so far led companies like Google and Go Daddy to deny their services to Iranians for fear of violating sanctions. The “chilling effect” has also led to alleged discrimination in the past, including reports that Apple employees refused to sell products to Iranians and Iranian Americans in a misplaced effort to enforce sanctions. Additionally, Canada’s TD Bank began canceling accounts last July, providing little explanation and no opportunity for customers to defend themselves. TD Bank eventually relented and reopened the accounts after significant public pressure.




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