Bank fined €20k for discriminating against Iranian couple

A bank in Ireland has been ordered to pay €20,000 to an Iranian couple in business here over demanding that they not transfer any funds to bank accounts in their native country.

In the case, the Workplace Relations Commission (WRC) has ordered that the un-named bank pay €12,000 to the woman and €8,000 to her husband after finding that the bank discriminated against the couple of the grounds of race.

The woman - who has a PhD - secured Irish citizenship in 2015 and the two came to Ireland as students and set up a small medical data analysis company here.

The woman had operated a bank account with the bank for 10 years and her husband for five years before they received a request last year to agree to a number of restrictions on the operation of their bank account.

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The bank argued that the restrictions were necessary and could be objectively justified because it was obliged to comply with national and EU legislation in relation to anti-money laundering/combating financing terrorism and the requirement to comply with sanctions against Iran.

However, in her ruling, WRC Adjudication Officer Marian Duffy found that the bank did discriminate against the two on the grounds of race.

Ms Duffy said that "alternative methods to counter money laundering/terrorist financing and US sanction breaches were open to the respondent".

She said: “These include the implementation of robust IT systems and procedures, customer advice/guidance and information systems and/or a helpline as part of the process to monitor account activities.”

Ms Duffy found that the bank’s policy was neither appropriate nor necessary to achieve its stated aims and therefore was not objectively justified.

High risk customers

The couple said that they had no difficulty in providing the documentation about proof of their address and identities, the sources of their funds, and copies of their passports.

They said that if they signed the bank’s declaration form they could no longer use their account for any purpose relating to Iran such as to buy airline tickets for holidays in Iran, to give parents cash presents or to do any business with Iran.

They did not sign the form and they were told by the bank if they did not do so their account would be closed.

The two submitted that the bank discriminated against then on the grounds of their Iranian nationality.

The bank stated that the two were rated as high risk customers because of their Iranian nationality and withdrawals from the accounts during the months of October to December 2016, they had to be subjected to enhanced due diligence, including signing the contentious declaration form.

The couple stated that the transactions of 2016 were for the payment of wages and purchasing shares.

The bank stated it is subject to EU regulations called the Iran Regulations as well as the US laws and regulations regime in relation to sanctions.

There bank’s Head of Sanctions said that the bank had no appetite for dealing with customers who had affiliations with Iran.

She said that the purpose of the declaration form was to transfer the risk associated with the sanctions regime to the customer.

The official said that if the Central Bank fined the bank in connection to any breaches in relation to the account, the bank can pass on the fine to the customer.

She said that the bank has a branch in the US and for this reason they are caught by the sanctions.

While the US sanctions do not prohibit financial transactions, they can fine banks if they deem the financial transactions are against US national interest.