Iranian students, studying in the United States and reliant on Bank of America debit cards and ATMs for access to their foreign bank accounts, have recently had their assets frozen. According to Ryan Costello and Jamal Abdi of the National Iranian American Council (NIAC), “Due to a sudden, unnecessary and — most of all – discriminatory change in bank policy, Iranians and Iranian Americans across the country suddenly try to use their debit cards to make a purchase or withdraw money from an ATM, only to find that their accounts have been frozen effective immediately.” Furthermore, “When they try to get answers from the bank, they are often subject to a Kafkaesque bureaucratic run-around before a person with proper clearance is found, at which point the process begins anew.”
The arbitrary, opaque, and ultimately discriminatory nature of many of the United States’ sanctions provisions on Iranian institutions and Iranians themselves is nothing new. In 2012, consumers of Iranian ancestry – real or perceived – were subject to ethnic profiling and explicitly prevented from purchasing products from Apple retailers across the country. Restrictions on Apple sales to customers planning to bring these products to Iran were only lifted last August.
Earlier this year, the online education company Coursera ceased offering courses to Iranians due to the same “export control regulations” imposed on businesses by the U.S. government, proscribing services to sanctioned jurisdictions. The U.S. Treasury’s Office of Foreign Assets Control (OFAC), the agency that implements economic sanctions, subsequently issued a regulatory exemption known as General License G, designed to ease academic exchanges between Iran and the United States, including “the provision of scholarships to Iranian students, Iranian participation in online courses, and Iranian participation in university entrance and professional certification examinations,” according to sanctions expert Erich C. Ferrari.
Nevertheless, even with some sanctions relief resulting from the multilateral nuclear accord signed by Iran and six world powers last year, myriad problems remain. As Ferrari points out, U.S. law still “prohibits the debiting or crediting of an Iranian account, therefore all transactions must be routed through foreign financial institutions. The problem is that both domestic and foreign financial institutions have been skittish about processing any Iran-related transactions, even when they are clearly authorized by OFAC.” He notes that even banks who have express authorization from the U.S. government to conduct business with Iranian banks are still hesitant to do so.
“Some banks are willing to play a part here. But not all of them. There are a lot of big banks that have been subject to fines for engaging in transactions that were in violation of U.S. sanctions that aren’t willing to do anything – even humanitarian,” a U.S. official recently told Reuters. The victims of such policies continue to be the Iranian people, whether suffering from shortages of medical supplies at home or, in these recent cases, having their bank accounts frozen abroad.
Costello and Abdi explain:
The justification for this discriminatory and damaging policy lies in an over enforcement of U.S. sanctions law. Under extensive financial sanctions that have cut off Iran’s financial sector from the United States, U.S. banks cannot provide any services or permit accounts from being accessed within Iran. Many Iranians and Iranian Americans know these restrictions and are careful to ensure that they do not access their accounts when visiting Iran.Nevertheless, Bank of America has employed a scorched earth approach to ensuring sanctions compliance: freezing domestic accounts with little to no warning for weeks at a time until they obtain additional documentation. These freezes are simply not necessary under U.S. sanctions law and solely rely on the legally questionable and ethically problematic justification of national origin. By contrast, many other banks simply request the documents and allow their customers to continue to access their accounts from the U.S. while they review and assess the risk of the customer running afoul of financial sanctions.
Meanwhile, over the past year, European sanctions imposed on Iranian banks and businesses have been collapsing in courts, due to their “irrational” and “arbitrary” implementation and reliance on secret evidence. In September 2013, a European Union court quashed sanction on seven Iranian companies, including four banks, rejecting arguments that they were acting as front companies to bypass the punitive measures,” according to the New York Times. Earlier that year, in June 2013, British sanctions imposed on Iran’s largest private bank, Bank Mellat, since 2009 were similarly annulled by the UK Supreme Court. In February 2014, Bank Mellat filed a $4 billion lawsuit against the British government for damages and compensation.
Costello and Abdi aptly conclude:
While the U.S. and Iran continue to try to resolve their many differences, action must be taken prevent the fallout of these disputes from disrupting the peaceful lives of citizens in each country. Bank of America has a clear role to play in this effort, and should immediately halt its discriminatory account freezes and undertake a thorough review of its sanctions compliance policy to ensure that these practices do not continue. The innocent customers that Bank of America has harmed deserve, at least, to know that their policy has changed and that they won’t have to suffer through this discrimination again.*****
Originally posted at Muftah.