Published: Tuesday, January 16, 2007 6:29 PM ET
Canadian Press: PETER RAKOBOWCHUK
MONTREAL (CP) - The Royal Bank (TSX:RY) is applying tight restrictions on who can open U.S. dollar accounts and defended the policy Tuesday as part of the effort to stop terrorism and money-laundering.
The bank was reacting to a report about the U.S. restrictions. Bank spokesman David Moorcroft said citizens of Iran, Iraq, Cuba, Sudan, North Korea or Myanmar are not allowed to have U.S. dollar accounts.
He added the United States has tightened up existing rules which were put into place since the terrorist attacks in September 2001.
"What they're trying to do is reduce and eventually eliminate the U.S currency being used for terrorist financing and money laundering," Moorcroft said.
"It's their currency, they have the right to decide how it's used," he said in an interview.
"If you want to write a cheque to someone, make a payment in a U.S. dollar, most times it's going to clear through the U.S. and it has to meet their rules and regulations," Moorcroft added.
The Royal Bank has major bank and brokerage operations in the United States.
The national president of the Canadian Islamic Congress is urging Canadians to open foreign accounts in different currencies other than the U.S. dollar.
Mohamed Elmasry said the restricted list is a political decision made by the U.S. administration.
"It is an American interference in Canadian business and should be totally rejected by the Canadian banking system," said Elmasry.
The Canadian Bankers Association declined to comment and said the country's banks could comment individually.
A spokesman for the TD Bank (TSX:TD) said it's not the bank's policy to refuse to open a U.S dollar account in Canada for people with dual citizenship.
"(But) we carefully monitor the transactions for anyone with a U.S dollar account," Neil Parmenter added.
"There are 'know-your-customer' rules and anti-money laundering rules. . . and they apply to anyone, whether someone had dual citizenship or whether they don't," Parmenter said.
"We're required to look for unusual transactions and report on them."
The Iranian Canadian Lawyers Association issued a statement saying the Royal Bank's actions "seem to fit the classic definition of discrimination."
It said the bank may have very well have alienated a significant portion of the banking population, adding that "the government of Canada, on behalf of its citizens, needs to respond effectively and appropriately."
Elmasry also said the U.S. policy makes it harder for immigrants who may want to help families who are facing "a economic situation" overseas.
"Many of them are from the countries listed and this will create difficulties for the transfer of social assistance from these Canadian citizens to their overseas countries," Elmasry said.
Moorcroft also noted that some European banks have already been fined for not following the U.S. rules.
But Elmasry said there should be some exceptions.
"There must be ways for the Royal Bank to say to the American administration that our citizens and our landed immigrants (of Canada) are free to open accounts in any currency they wish."
He also said if it's only the Royal Bank that following U.S. instructions, there may be a call for a boycott.
© The Canadian Press, 2007
http://www.cbc.ca/cp/business/070116/b011695A.html
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