TD (TSX:TD) began notifying Iranian-Canadian clients in May that it would no longer provide them with banking services — in some cases referring to Ottawa's economic sanctions against the Tehran regime.
Nazanin Afshin-Jam, a dedicated human rights activist, says she believes the bank "unintentionally misinterpreted" the broad application of the sanctions, aimed at cracking down on Iran's nuclear program.
"I think they should have done more investigation rather than harming innocent Iranian Canadians," she said in an interview from her home in New Glasgow, N.S.
Members of the Iranian-Canadian community have expressed outrage at the bank's decision, saying they feel they're being treated as second-class citizens.
TD has not publicly revealed how many accounts belonging to Iranian Canadians have been closed, but community leaders say they've received complaints from across the country.
Afshin-Jam says that Iranian-Canadian friends of her father in Vancouver had their TD accounts closed despite having lived in Canada for many years with no ties to the Iranian government.
"I definitely think they are entitled to an answer and evidence, that's a basic premise of law — the right to face your accuser — and I think there's nothing better than honesty and transparency in this kind of situation," she says.
In a statement released Thursday, TD said it is required to comply with Canadian bank laws and regulations, "including economic sanctions, which prohibit us from providing financial services to or for the benefit of certain countries, or any person in those countries."
The emailed statement said decisions to end customer relationships are not taken lightly but said it could not comment on "specific customer situations." Senior TD officials have promised to meet with community leaders on July 22 to discuss the matter of the account closures.
Afshin-Jam says the reason other Canadian banks aren't joining TD is because they are properly interpreting the government's intended sanctions, whereas TD, she says, has "overreacted".
Afshin-Jam points out that it is the federal government's responsibility to explain in more detail to banking and financial institutions "what they mean by these broader, targeted sanctions against regime officials."
A spokesman for the Department of Foreign Affairs and International Trade said in an email Friday that financial sanctions take the form of a prohibition on providing or acquiring financial services to Iran or any person in Iran.
"The application of this section to any individual account is a matter that must be determined on a case-by-case basis," said Jean-Bruno Villeneuve.
He also said that the sanctions also provide for a number of exemptions, including for any financial services required to be performed under a contract entered into before the sanctions went into effect on Nov. 22, 2011, or for non-commercial transfers of $40,000 or less sent to or from any person in Iran.
Villeneuve said that any person whose account has been affected may apply to the minister of foreign affairs for a permit allowing them to engage in transactions that would otherwise be prohibited by the sanctions.
Afshin-Jam says members of the community are still waiting for an explanation from the bank.
"Until they come out with another statement I don't think Iranian Canadians will be satisfied with that," she says.
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