Citing Federal Sanctions, TCF Bank in Minnesota Closes Accounts of Iranian Students
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Iranian American Bar Association PARS Equality Center Public Affairs Alliance of Iranian Americans
For Immediate Release
It has recently come to light that Iranian students have been receiving notifications from banks regarding the closure of their accounts, most recently those attending the University of Minnesota. According to local news reports, as many as a dozen visiting Iranian students at the University of Minnesota have received such letters from TCF Bank. The closing of accounts was apparently the result of the Bank’s investigation into transactions that may have violated U.S. sanctions programs. TCF Bank contends that other students, not just Iranian students, also received such the letters.
U.S. financial institutions have increased both the quantity and the scope of their sanctions compliance policies over the years, in an effort to comply with various U.S. sanctions programs—particularly sanctions imposed against Iran. However, the complexity of these various sanctions programs can lead to confusion and misapplication of the law, as may have happened in the TCF Bank case, or even a conscious decision to shut out account holders deemed to put the bank at risk of sanctions violations.
To that end, it is important for banks such as TCF Bank to note that once Iranian students come to the United States they are no longer deemed to be Iranian by the definition contained in the ITSR. Instead, they are considered to be U.S. persons, the definition of which includes an individual physically present in the United States. As such, the maintenance of an account by a U.S. financial institution on behalf of an Iranian student residing in the United States on a student visa is not a prohibited exportation of services to Iran, but rather the provision of services to a U.S. person. Furthermore, although the ITSR does not expressly grant authorization to U.S. financial institutions to open and maintain accounts for Iranian students visiting the U.S. on a student visa, it does in fact authorize transactions ordinarily incident to a licensed transaction. It is not a stretch to consider that maintaining a bank account while attending school in the United States is ordinarily incident to fulfilling the requirements of a student visa.