NIAC Calls for Treasury to Protect Iranian Americans from Bank Account Closures
For years, Iranian Americans have had their bank accounts shuttered as a direct result of their Iranian national origin or heritage. This is a form of discrimination that is profoundly damaging, throwing individuals into financial limbo while they wait to see if and when the bank will release their life savings. If you have faced discrimination from a bank account or had your account frozen, consider sharing your story so that we can build a documented case for why these discriminatory actions need to halt.
Banks cite this as precautionary efforts to abide by U.S. sanctions that prohibit individuals from operating bank accounts in Iran. While not technically required by law, many of these banks judge that the risk of running afoul of sanctions outweighs the risk of engaging in discrimination against Iranian Americans.
This is why NIAC is petitioning the Department of Treasury for a formal rule change to license Americans to operate bank accounts from Iran. We believe that we can change this rule and end these bank’s discriminatory actions against our community.
A significant majority of complaints we have received come as a result of actions from Bank of America. Despite multiple efforts since 2014 by NIAC to engage Bank of America to fix their policies, Bank of America continues to engage in account closures of Iranian Americans.
That is why NIAC has again sent a letter to Bank of America clarifying that sanctions do not obligate them to close bank accounts of individuals ordinarily resident in the United States, while holding the option open to take legal action to protect the interests of Iranian Americans and bring an end to their discriminatory treatment at Bank of America.
Know that NIAC will not stop fighting for you, whether we are up against Trump’s Treasury, Bank of America, or anyone else harming Iranian Americans.
July 19, 2019
Re: Request for Rulemaking—Iranian Transactions and Sanctions Regulations
31 C.F.R. Parts 501 and 560
Dear Ms. Gacki:
The National Iranian American Council (“NIAC”)—the largest grassroots organization in the United States representing the interests of Iranian Americans—respectfully petitions the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) for the issuance of a rule providing license authorization for certain transactions prohibited pursuant to the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. Part 560. This request is made pursuant to 5 U.S.C. § 555(b) and 31 C.F.R. § 501.804(b), the latter of which is applicable to the ITSR by virtue of 31 C.F.R. § 560.101.
NIAC requests that OFAC promulgate a rule providing license authorization for U.S. persons to operate accounts of persons in Iran consistent with license authorizations that have been promulgated with respect to other U.S.-embargoed countries and jurisdictions, including, for instance, Syria and the Crimea region of Ukraine. We believe that such a license authorization will help resolve a problem that has become endemic to the Iranian-American community—namely, the difficulties Iranian Americans have had opening and maintaining bank accounts at U.S. financial institutions.
Over the past few years, NIAC has heard from countless Iranian-American citizens and Iranian nationals in the United States who have faced continuous harassing inquiries from their banking institutions regarding their legal status and physical presence in the United States and have had their banking accounts shuttered and their life savings mailed back to them via the postal service. Such actions cause tremendous disruptions in the lives of U.S. citizens and Iranian nationals present in the United States, impacting their finances and very well-being, for no reason other than their Iranian heritage. Some individuals who have had their bank accounts shuttered have never even traveled to Iran.
Banks have justified their behavior with near-unanimous resort to the requirements of U.S. law under the ITSR, including, for instance, the prohibition on the provision of financial services to Iran. While NIAC has repeatedly pointed out to U.S. financial institutions that the ITSR does not require them to deny financial services to Iranian Americans who are neither ordinarily resident nor physically present in Iran, this has not mitigated banks’ practices. U.S. banks have made a ‘risk-based decision’ based on U.S. sanctions under which servicing the accounts of Iranian Americans is not worth the risk inherent in falling afoul of the law.
We believe that it is OFAC’s responsibility to remedy this situation. We are herein proposing that OFAC adopt a rule similar in scope of that found in the Syrian Sanctions Regulations, 31 C.F.R. Part 542, or the Ukraine-Related Sanctions Regulations, 31 C.F.R. Part 589. For instance, § 542.515 of the Syrian Sanctions Regulations authorizes the operation of accounts in a U.S. financial institution for an individual in Syria other than a blocked individual, provided that transactions processed through the account (1) are of a personal nature; (2) do not involve transfers directly or indirectly to Syria or for the benefit of individuals ordinarily resident in Syria unless otherwise authorized; and (3) are not otherwise prohibited by the Syrian Sanctions Regulations. We believe that such a general license authorization can mitigate the risk that U.S. banks believe to be associated with handling the accounts of Iranian Americans.
We also believe that this proposed license authorization is an important starting point with which OFAC may consider a remedy to this ongoing problem. NIAC welcomes the opportunity to start a dialogue with OFAC regarding the best path forward to ensuring that Iranian Americans are not unduly harmed by the U.S.’s trade embargo with Iran. Being unable to procure basic banking services in the United States—a country in which Iranian Americans live (and for some, have only lived)—is understandably an issue of immediate concern, and we trust that OFAC will dedicate the necessary resources to working towards an imminent solution.
As part of this request for rulemaking, NIAC also intends to provide supplementary materials to OFAC to underline the immediate nature of the problem and to provide additional proposals to resolve the issue. This may include testimony for members of the Iranian-American community who have been especially affected by the practices of U.S. banking institutions. NIAC is also prepared to respond to any inquiries or requests for clarification that OFAC may have regarding this matter.
We thank OFAC ahead of time for its consideration of this issue, and we look forward to being in touch with the agency regarding a mutually satisfactory path forward.
President, National Iranian American Council