Iranian-Canadian bank account closures vicissitudes

thestar.com - The Canadian Civil Liberties Association is warning that TD Bank may have infringed Charter rights when it suddenly closed a number of Iranian Canadian accounts.

The bank sparked outrage from the Iranian-Canadian community when it began sending letters in May saying accounts had been closed due to economic sanctions against Iran. The sanctions forbid Canadian banks from doing business with Iranian residents, or transferring sums over $40,000 to or from Iran.

Yet many customers, like Soudeh Ghasemi, say they did not violate these rules. She is a Canadian citizen and says her last major money transfer from Iran was four years ago — yet her family’s business account, line of credit and mortgage were shut down without warning.

“I was shocked,” she said. “I don’t see myself included in the reasons they indicated.”

Sukanya Pillay, CCLA national security director, said some cases give cause for alarm.

“We are concerned that by implementing collective measures against individuals in Canada based on place of origin, we may be impairing Charter rights,” she said.

The Charter of Rights prohibits discrimination based on country of origin. If TD is closing accounts of customers who have not transferred funds to or from Iran, they may be applying sanctions too broadly, Pillay explained.

“It raises questions for us. Have these people been provided with the opportunity to explain a funds transfer, or indicate that they never made a funds transfer?”

The Charter can only be violated by government officials. However, since TD is shutting down accounts to give effect to federal regulations, there may be a Charter violation, said Pillay.

The bank has maintained that it contacted customers multiple times beforehand and, in the cases where it did not receive a response, had no choice but to close the accounts.

After a meeting with the Iranian Canadian Congress Thursday, TD said it would “reach out” to customers who did not respond to previous calls.

“In some cases, depending on the information provided, this could lead to the banking relationship being restored,” chief executive officer Tim Hockey said in a statement.

However, TD stopped short of promising to re-open accounts. Bank spokesperson Mohammed Nakhooda said in an email the bank remains confident they have applied the sanctions correctly.

Kaveh Shahrooz, vice-president of the Iranian Canadian Congress, said he is cautiously hopeful after the meeting with TD executives.

“The issue at this point is TD has communicated its views poorly,” he said. “They’re going to do a better job of actually reaching out to our community and better communicate why these decisions were made.”

The congress will monitor TD’s actions over the next 30 days as it contacts some account holders, Shahrooz said.

Ghasemi said she is hopeful that TD will get in touch with her but wonders why it has taken so long.

“We need to see some action. They’re very good at taking action when it comes to cutting things,” she said.

She is also skeptical of TD’s assertion that they did not close accounts based on name, ethnicity or background.

“I know that I’ve been picked because of my background. Maybe they didn’t pick me because of my name, but definitely for the background.”

TD remains the only Canadian bank reported to be conducting mass closures. HSBC, Royal Bank, the Bank of Montreal and Scotiabank told the Star they have been reaching out to clients, informing them of the sanctions and advising them to apply for exemptions when possible.

A very small number of accounts have been closed, but customers would not have been taken by surprise, said HSBC spokesperson Sharon Wilks.

“International sanctions are a fact of life, and something we have had to deal with before,” Wilks said. “We are taking a proactive and individualized approach with our clients.”