In recent days, many Iranian-Canadians have expressed concern about their bank accounts being closed or frozen. Some even connect this issue to the so-called “snapback mechanism.” But is there really a link?
What Is the Snapback Mechanism?
The snapback mechanism is part of the 2015 nuclear deal (JCPOA). Under this rule, if Iran fails to meet its commitments, United Nations sanctions that were previously lifted automatically return.
This is purely a political and international tool. It does not directly affect the banking system in Canada or the personal accounts of Iranian residents here.
Why Do Bank Accounts Get Closed in Canada?
Canada has its own independent sanctions against Iran under the Special Economic Measures Act (SEMA). Banks are legally required to apply strict anti-money laundering (AML) and anti-terrorist financing rules. Accounts may be frozen or closed for reasons such as:
- Direct transactions with Iran (sending or receiving money).
- Links to sanctioned individuals or entities.
- Lack of transparency around the source of funds.
- Internal compliance policies—some banks are stricter than others.
Snapback vs. Canadian Sanctions
- The snapback mechanism only relates to the return of UN sanctions.
- Canadian sanctions are independent and apply regardless of snapback.
So when Canadian banks close accounts, it is because of domestic sanctions and compliance—not the snapback mechanism.
Practical Tips for Iranian-Canadians
- Avoid direct financial transactions with Iran.
- Use licensed and reputable money service businesses when necessary.
- Keep documentation of the source of your funds (pay stubs, contracts, property sales, etc.).
- Be transparent and responsive if your bank asks questions.
- Seek advice from financial or legal professionals familiar with sanctions if needed.
Conclusion
Iranian-Canadians can hold and use bank accounts like any other resident. The main issue is not the snapback mechanism, but Canada’s independent sanctions and banks’ strict compliance rules. By following a few simple practices—transparency, avoiding direct Iran transactions, and using licensed channels—you can minimize the risk of account freezes or closures.
