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Preface: It is a known fact that because of Russia taking over Crimea, Iran with their nuclear program and North Korea with their crazy missile plans, the United States Government has placed several rounds of sanctions on those countries.

I do apologize in advance if someone considers this question not quite related to personal finance, but it's still about the possibility to invest and grow financially. I've been practicing a lot on those numerous demo simulator accounts and recently decided to go real with AmeriTrade. While registering online, I chose my second citizenship (dual U.S. and Iran) from the mandatory questionnaire and for some reason I was blocked from any further steps. While calling the customer service care I was explained that U.S.-based financial institutions are prohibited from giving access to stock platforms to citizens of countries that are under U.S. financial and trade sanctions and, sooner or later, they would be able to track my Iranian roots from my SSN (even if I had decided not to answer the question on citizenship) and block me. My two questions are:

  1. Are most big U.S.-based financial institutions and banks in such a close relationship with the United States Citizenship And Immigration Services (USCIS) so they can easily request the information about market traders?
  2. What online broker would you suggest that probably won't focus on that dual citizenship matter?
Brythan
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Tired Of Trading
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2 Answers2

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Are most big US based financial institutions and banks in such a close relationship with USCIS (United States Citizenship And Immigration Services) so they can easily request the information about market traders?

Yes. They must be in order to enforce the laws required by the sanctions.

What online broker would you suggest that probably won't focus on that dual citizenship matter?

"Dual" citizenship isn't actually relevant here. Nearly anyone in the world can invest in US banks except for those few countries that the US has imposed sanctions against. Since you are a citizen of one of those countries, you are ineligible to participate. The fact that you are also a US citizen isn't relevant in this case. I believe the reasoning behind this is that the US doesn't encourage dual citizenship:

The U.S. Government does not encourage dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government also recognizes the problems which it may cause. Claims of other countries upon U.S. dual-nationals often place them in situations where their obligations to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts of the U.S. Government to provide consular protection to them when they are abroad, especially when they are in the country of their second nationality.

If I had to guess, I'd say the thinking there is that if you (and enough other people that are citizens of that country) want to participate in something in the US that sanctions forbid, you (collectively) could try to persuade that country's government to change its actions so that the sanctions are lifted. Alternatively, you could renounce your citizenship in the other country. Either of those actions would help further the cause that the US perceives to be correct.

What it basically boils down to is that even though you are a US citizen, your rights can be limited due to having another citizenship in a country that is not favorable in the current political climate. Thus there are pros and cons to having dual citizenship.

TTT
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US Sanctions are usually very nuanced and you should look them up yourself.

It may be widely reported that "US sanctions X-country" and it may be widely understood that it means all funds from anybody in that country are blocked, that USUALLY isn't the case (or "many times" isn't the case, I'm not going to bother quantifying that)

Many times it is a comprehensive list of certain individuals and businesses that are blocked.

The US Treasury publishes a list of these organizations.

This misinterpretation can trickle down to companies. You would think big financial companies understand regulations, but they typically just react to how things are reported and have no uniform understanding of the financial regulations they are subject to. Private companies create unique and arbitrary company policies in reaction to the spirit of a regulation.

So could it be that all Iranians cannot interact with the US financial system? Sure, thats possible.

Could it be a lot more nuanced? Sure.

Does it matter if the broker will actually investigate your SSN with USCIS? Maybe, maybe not.

Does it matter if you disclose you are a dual citizen if they claim they can just check your SSN?

The financial institution is the one liable for misinterpreting sanctions.

Let the consequences guide your actions.

CQM
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