Banking LawSanctions

Bank Account Closure is a Discriminatory Act

3 Mins read

A bank account closure as an immigrant worker, businessman, or student is never pleasant or welcoming!

In fact, economic sanctions are more than executive orders and news. They can be considered the governments’ modern weapons. Clearly, average people are affected and targeted by sanctions on a day to day basis. Many Iranians living in the U.S., UK, and Malaysia face mass bank account closures or account restrictions following the US and EU sanctions.

Of course, banks are required to investigate compliance rules and OFAC sanction list in this regard, otherwise fines will have to be paid. Today, many banks in Europe, especially in the UK and Italy, have closed some Iranian banks or have restricted Iranians’ accounts in line with their conservative strategies. In Italy, the Italian branches of ING Direct Bank and Intesa San Paolo have recently closed some Iranians’ bank accounts. 

Keep in mind that such occurrences don’t always signal the final call as there have been numerous success stories for Iranian individuals and banks who have filed suits against UK and EU banks.

How to seek legal advice during a bank account block?

There are some professional advocates and law firms who are experts in banking law and sanctions in representation of sanctioned countries.

Ronald Fletcher Baker LLP is a leading firm for legal services for over fifty years. The firm has represented a widespread selection of individuals, most specifically British companies with Iranian managers and individuals. Although, many of the financial transactions with Iran are deemed as acceptable and compliant to the law, many British banks and financial institutions prefer to avoid it in general. This may be looked upon as a discriminatory act against Iranians. With that said, one can even see this as a violation towards the Equality Act of 2010. 

Despite the difficulties of Iranians in money transfer from Iran to the UK, there are still some available solutions to avoid further issues. 

So what is the most recent claim raised by Iranians?

Metro Bank is facing a compliance control review after dealing with Cuba and Iran despite the U.S. and EU sanctions. Metro notified U.S. officials of the Cuba offense in November 2017.

According to the firm, “Between 20 May 2019 and 5 September 2019, Metro Bank restricted our clients’ bank accounts without notice and without explanation. Most of the accounts have been closed since”. The firm’s legal team believes that the aforesaid bank has violated their Iranian clients’ rights. 

Accordingly, the firm served its pleading on the bank on March 11th of this year and asserted a claim for a breach of the blocking regulation. Upon understanding that a payment from Iran had been issued last year, Metro Bank hired DLA Piper investigators to review its compliance regulations 

According to an article published in The Risk Universe,

“One senior compliance consultant not involved in the situation said the US authorities would be extremely concerned about the double breach. He said: “Getting it wrong on Cuba is bad enough, but to mess up with Iran so soon afterwards suggests something is seriously wrong with their systems, especially so recently. Those two countries in particular are such big no-nos. Depending on how the authorities assess the review outcome, Metro could face swinging fines although it has not made any provisions in its accounts for such an outcome. Iran is sanctioned in the UK and EU as well as the US”.

 Rokhsareh Vahid, a Sanctions and Banking Specialist, is a member of the Iran Desk of the firm and assists individuals with any issue pertaining to the UK law and Iran-related matters. 

In 2019, the firm represented an Iranian national who’s account had been frozen for six months on the Westminster Magistrates’ Court order. The Metropolitan Police Service withdrew its claims after the legal team took over. Moreover, a similar case was also faced with the West Yorkshire Police.

What can be concluded?

The imposition of economic sanctions on ordinary peoples’ daily lives and its consequences are most definitely unfair; Yet, there is always a way! 

There are still some available legal tricks for use. If your business is related to money transfer from Iran or you work abroad, you are recommended to make sure there is nothing related to Specially Designated Nationals (SDN list published by OFAC) in the process of money transfer. If you live in the UK, you can talk to a expert lawyer in Financial Conduct Authority (FCA) mechanism.

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