Stand up to U.S. on banking restrictions, Muslim groups say
Prime Minister Stephen Harper should stand up to the U.S. government
and make it stop pressuring Canadian banks into denying U.S. dollar
accounts to customers of certain nationalities, Muslim groups said
The groups decried as discriminatory a Royal Bank decision to deny
U.S. dollar accounts to citizens of six sanctioned countries -
including Iraq, Iran and Sudan - even if those customers also hold
Mohamed Elmasry, president of the Canadian Islamic Congress, said that
the Royal Bank and other banks should refuse to comply with U.S.
regulations, and he called on the prime minister to fight Washington
for infringing on Canadian sovereignty.
"It's unacceptable," he said in a telephone interview from Waterloo, Ont.
"It seems the Americans are blackmailing Canadian banks to follow
"We will ask the prime minister to intervene to protect Canadian
citizens, immigrants and visa holders from intimidation by Americans."
Elmasry added that the Royal Bank should "not succumb to Americans
dictating what we can and cannot do in Canada."
But Royal Bank spokesperson David Moorcroft said the bank has no
choice but to comply with U.S. government regulations aimed at
fighting terrorism financing
and money laundering and at enforcing sanctions.
The rules apply to citizens and/or residents of Iran, Iraq, Sudan,
Cuba, North Korea and Myanmar who want to use
U.S. dollar chequing accounts. The same rules apply to banks around
the world, Moorcroft said.
He said cheques drawn on U.S. dollar accounts for transactions outside
Canada are processed in the United States and therefore must comply
with that country's laws.
"Clients open (accounts) in U.S. dollars primarily to make payments
into the U.S. or in other countries that will be processed through the
U.S.," Moorcroft said.
"If you want to use their currency, in their country, through their
clearing-and-payment system, they want you to obey their rules."
Moorcroft said the United States has been stepping up its enforcement
of the long-standing rules over the past year and any bank that
doesn't comply faces fines and even the loss of access to the U.S.
payments system. A pair of European banks have already been assessed
fines running into the millions, he said.
"If we didn't apply this policy properly, we could lose the right to
provide this service to over 600,000 people."
Moorcroft said a couple of dozen people have been denied U.S. dollar
accounts while a small number of clients have had their accounts taken
Several other banks take a different view on the issue. Spokespersons
for the TD Bank, the Bank of Montreal and the Bank of Nova Scotia said
they don't deny U.S. dollar accounts to citizens of countries on the
list as long as they meet normal requirements.
A National Bank spokesperson said the bank does comply with the U.S.
regulations, although it has never had occasion to refuse an account
to a client for that reason.
Salam Elmenyawi, president of the Muslim Council of Montreal, called
the enforcement of U.S. regulations in Canada discriminatory, racist
and a denial of the presumption of innocence.
"Take an Iranian, for example, who is a good Canadian citizen or
landed immigrant, why would he be prevented from having an account?"
"How can this advance any cause?
"How can another country come to interfere with us and say: 'I will
force you to act against your constitution and I will force you to
discriminate in such a way'?"
He said banks enforcing the rules should reverse their policy and the
federal government should get involved to "ensure our institutions
But a spokesperson for the federal Finance Department said wire
transfers, cheques and drafts drawn on U.S dollar accounts pass
through U.S. institutions to be processed and are subject to U.S. law.
"At the end of the day, the Canadian government does not have the
legislative authority to change U.S. law," said Eric Richer, a
spokesperson for Finance Minister Jim Flaherty. "It's up to the
Canadian banks to determine how to comply with U.S. law with respect
to their U.S. dollar accounts."
Richer declined to comment on the possibility of a diplomatic effort
to get the rules changed.
dmacdonald @ thegazette.canwest.com
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