Category: Finance

By Mohammad Tajdolati, Correspondent at Iran International TV 

Recently, the Canadian Government introduced a new directive which was issued by the Minister of Finance impacting many members of the Iranian diaspora in Canada. The Ministerial Directive was introduced to curb money laundering and the financing of terror organisations and as such the government will now “treat every financial transaction originating from or bound for Iran, regardless of its amount, as a high risk transaction.”. This means that every Iranian-Canadian must also disclose the purpose of the transaction, the source of the funds in any transaction and the ownership of any entity benefitting from the transaction, raising concerns for the privacy of many Iranian-Canadians who wish to transfer their money. While true that money laundering has taken place in Canada for decades, this does not mean that the Iranians living in Canada are criminals or terrorists, and such legislation has made the lives of the diaspora increasingly difficult. Moreover, what has happened in Canda marks a concerning indication that similar legislation will be introduced elsewhere across the US and Europe. 

While the new directive is intended to curb money laundering and the financing of terror organisations, innocent Iranians in Canada have been detrimentally affected by the new directive. At Iran International TV, I have spoken to one member of the diaspora in Canada who found it difficult to send money to her poverty-stricken family back home in Iran. Additionally, many international students studying in Canadian universities from Iran are now struggling to find financial support for their studies, as every transaction originating from Iran is now treated as ‘high risk’. Consequently, students have gone without money for several months at a time, as they wait for the money from their family to be cleared by Canadian authorities. The majority of middle class Iranians in Canada have also been negatively affected by the new directive, but this directive has impacted every Iranian in Canada from all walks of life, and the banks are equally as guilty of making the lives of the Iranian diaspora more difficult.   

Where many Iranians already face discrimination and prejudice across Europe and the US due to political rhetoric, the new directive has exacerbated the feelings of isolation experienced by many Iranians abroad. I have spoken to many people who claim that the new directive has made them feel guilty despite their contribution to Canadian society. Moreover, the details needed by the authorities has also made many feel that their privacy has been compromised and that they are now vulnerable if ever there was to be a data leak or cyber-attack. The new directive has unfortunately forced many Iranians to transfer their money via unconventional ways and has led many Iranians with no choice but to use illicit routes to transfer money in and out of the country out of desperation.   

Exchange stores have been set up across Canada to help Iranians transfer money in and out of the country, and this is the only choice that many Iranians now have. Yes, there are cases of widespread money laundering in and out of the country, but we are talking about the average Canadian citizen who may send a small amount back home to their family or receive a small amount to support them in their studies. Without the option to transfer money in and out of Iran using these exchange stores, there is a growing risk of poverty and vulnerability for many who benefit from the more moderate financial transactions. The people I have spoken to have told me that this has caused them even more fear and anxiety in Iran, given the uncertainty of not knowing whether their families will receive the money they send and whether they will be targeted by police authorities for transferring money through the only way they know how. It must be noted that there are social implications of this new directive and how it has forced many to use unconventional ways to transfer money, and this is not to be confused with a wider problem of money laundering in Canada.   

The danger of forcing innocent Canadians to transfer money in and out of the country using unconventional ways is that it contributes towards a dangerous narrative and perpetuates the damaging stereotype that the diaspora in Canada are part of a wider network of money launderers and criminals in the country. Of course, there have been notorious cases of Iranian criminals orchestrating money laundering schemes in Canada, but that is not reflective of every Iranian in Canada’s individual case. Volant Media UK has reported on several notorious cases of money laundering in Canada, including the case of Bahram Karimi, who was charged with bank fraud in February this year. While admittedly the regime attempts to exert influence abroad, it must be noted that many came to Canada and around the rest of the world in Europe and the US to flee from the regime that its refugees are now being punished for.   

With the recent news of British-Iranian citizen Nazanin Zaghari-Ratcliffe facing further charges and the reports that Iran is pursuing  Uranium enriched weapons, it is important to question whether the actions of the regime will soon influence European and American economic policy and affect the Iranian diaspora in the US and Europe too. To stop the targeting of innocent Iranians in Canada and the rest of the world, some have suggested that the solution must come from the banks. However, given that for almost ten years there has been no relationship nor communication between the European, American or Canadian banks and the Iranian banks due to sanctions, this seems unlikely.  Another solution could be more control and restriction from Canadian authorities about the financial activities of more than 120 so-called exchange shops, which efficiently bypass Canadian rules and contribute to money laundering in Canada. 

On the one hand the problem is following the Canadian government’s current rules for transferring money in and out of the country, as it takes more than 50 minutes to fill up the forms and it costs about $50 to administer procedures. On the other hand, any exchange shops will transact any amount of money in or out of Canada in 5-10 minutes with much less cost for customers. A reasonable solution seems to be to designate official and experienced exchange offices in Canada, which have shown their loyalty to the Canadian rules, to serve the Iranian diaspora in Canada and make their lives easier, but we must use Canada as a case study for how prejudicial economic policy can negatively affect the Iranian diaspora internationally.