For years, TD Canada Trust has tried to distance itself from the other Canadian megabanks through its customer service, and I’ve certainly appreciated its long hours (open until 8pm) if nothing else. Last week I walked into the new local branch of TD Canada Trust and their prioritization of the customer experience was obvious. I was happy to have a branch closer to home and even happier to discover the frills inside: free juice, a coffee machine, and one of those made-for-the-office putting greens (?!!). I was informed by the ridiculously helpful customer service representative that I was inside a new kind of TD branch, a “Bravo” location. I told her with a wink that even though I “hated banks as a general rule”, I couldn’t complain about how I had been treated by TD.
But then the very next day I read that TD Canada Trust had closed the accounts of many Iranian-Canadians with little explanation or warning. Apparently, because these Canadian citizens had vague financial connections to Iran, their bank decided it had to shut down their accounts and lines of credit lest it run afoul of the new economic sanctions against that country. So sleep peacefully tonight, dear reader, knowing that Iran’s relentless push for nuclear weapons has been thwarted by TD Canada Trust’s latest initiative. Bravo, TD.
TD Canada Trust is the only Canadian bank to have carried out these measures, and they seem to have done so on their own initiative, without banking regulators getting involved. Apparently the financial industry can regulate itself, after all. Except TD appears to have ignored provisions in the Iran sanctions that should exempt some of its account holders from punitive action.
Section 5 part D of the regulation lists a series of exemptions for the sanctions between Iran and Canada. The exemptions for financial exchanges include financial services provided or acquired before November 11, 2011, pension payments to or from Iran, and non-commercial financial services under $40,000 (with record of transaction).
For Montreal lawyer Vincent Valaï, former president of the Association des Juristes Persans du Québec (an organization that has criticized TD’s actions), the absence of consideration for these sanction exemptions is the most puzzling part of TD’s closure of the accounts of some of its Iranian-Canadian clients.
Why did TD feel the need to be so aggressive in its interpretation of the sanctions, when no other bank had yet acted against its Iranian-Canadian clients? What was the downside of taking a more cautious approach, and putting its customers first? A bank director would have to set a kitten on fire on national TV before law enforcement thought seriously about fining his company.
TD’s public relations debacle notwithstanding, there are serious questions to ask about the morality of economic sanctions aimed at bringing about regime change. Sanctions like those against Iran don’t hurt the regime in power. Instead, they turn the population of the targeted country against the outside world and draw them closer to the demagogues who rule over them. Sanctions haven’t removed the communist regime from Cuba and didn’t do anything to weaken Saddam Hussein’s grip over Iraq in the 1990s. They end up hurting the ordinary people that they’re supposed to be helping. That’s not to say that restricting the sales of weapons or nuclear material to repressive regimes is a bad idea. But shutting down all the small-scale trade between citizens of a “bad guy of the week” country and their expatriate business partners isn’t a recipe for their democratic empowerment.
Most important, broad economic sanctions cause human misery on a massive scale. The catastrophic effects of sanctions on Iraq’s civilian population during the 1990s are well documented. It is conservatively estimated that hundreds of thousands of children died as a result of the sanctions. This was warfare by starvation (a war crime), but American policymakers asserted that the grotesque human toll was “worth it”. Even worse, the sanctions were expressly aimed at causing regime change, meaning that the Iraqi government was given no demands to meet except “dissolve yourself”. From the link above:
U.S. officials have stated that sanctions would remain even if Iraq complied with United Nations inspectors, giving the Iraqi regime virtually no incentive to comply. For sanctions to work, there needs to be a promise of relief to counterbalance the suffering; that is, a carrot as well as a stick. Indeed, it was the failure of both the United States and the United Nations to explicitly spell out what was needed in order for sanctions to be lifted that led to Iraq suspending its cooperation with UN inspectors in December 1998.
— Stephen Zunes, Continuing Storm: The U.S. Role in the Middle East, Foreign Policy In Focus, December 2000
Is the situation any different with Iran today? What is the Iranian regime supposed to do to relieve the sanctions that are ruining its economy? Nothing short of dismantling its entire civilian nuclear program would be enough to dissuade the U.S. government that it is not pursuing nuclear weapons. That still probably wouldn’t be enough — remember that the U.S. pulled out weapons inspectors from Iraq when they inconveniently found no evidence of WMDs. If the U.S. wants to lob cruise missiles into Iran, it can find a pretext, nuclear program or no nuclear program. Iran would have no guarantee of its own safety, because the Islamic regime would still be an attractive target for the war industry. Today media, government and military elites in the U.S. and Israel threaten to bomb it on a weekly basis. The United States is already waging cyberwarfare against Iran (google the stuxnet virus), and Israel is assassinating its scientists with car bombs. High profile Americans, along with the Israeli Mossad, support a terrorist group within Iran, the MEK. As for the effects of the sanctions themselves on Iran’s people, consider these statistics from Asia Times:
According to reports, the annual inflation rate in Iran is 22.2%, although many economists estimate it at double that. In the last week of June, the price of chicken rose 30%, grains were up 55.8%, fruits up 66.6%, and vegetables up 99.5%. Iran’s Central Bank estimates unemployment among the young is 22.5%, although the Financial Times says “the official figures are vastly underestimated”. The production sector is working at half its capacity. The value of the Iranian rial has fallen 40% since last year, and there is a wave of business closings and bankruptcies due to rising energy costs and imports made expensive by the sanctions.
This is the context of TD Canada Trust’s zealous — and voluntary — enforcement of the Iran sanctions. Do we really want to destroy an entire society? Because that is what will happen, long before the ayatollahs are ever dislodged from power.