Part A – Prologue – Citizenship And Residence Are NOT The Same
Circa – April 2017
In April of 2017 the Congress held a hearing to explore the unintended consequences of FATCA. Much has been written and discussed about that hearing at the Isaac Brock Society.
The panel was composed of both Republicans (anti-FATCA) and Democrats (pro-FATCA). The “ranking Democrat” was Gerry Connolly.
I was sitting at the back of the room. The hearing unfolded along the usual “party lines”. I have a very distinct memory of Gerry Connolly – in good faith – remarking that:
“All countries tax their citizens.”
Clearly Mr.Connolly was confusing “residents” with “citizens”. The inability to distinguish citizens from residents has made it harder to illuminate the problems of “citizenship taxation”.
Circa 2026 – LSAT Prep Coach Steve Schwartz
Yesterday, U.S. sanctions on Iran shut law school applicants out of their own LSAC accounts.
LSAC emailed them saying it’s prohibited from providing products or services to “Iranian citizens or residents,” and named LSAT registrations, CAS subscriptions, application processing, and reporting. Accounts went dark. Some of those people are days out from a scheduled test date.
Here’s the rule behind it.
On August 24, Treasury’s Office of Foreign Assets Control suspended Iran General License G indefinitely. That license is the reason American testing organizations could administer entrance exams to Iranians at all. Paragraph (b)(4) authorized U.S. persons “wherever located” to give university entrance examinations, including multiple choice standardized tests, to individuals “located in Iran or located outside Iran but who are ordinarily resident in Iran.”
The GRE and the TOEFL went first. The New York Times reported on September 1 that ETS canceled both in Iran, and that Duolingo pulled its English test for anyone who can’t register as a citizen of another country. The LSAT is the latest.
Now look at the wording.
The license turns on where you live. The email turns on citizenship. Those are not the same thing, and with Iran they’re really not. Under Article 976 of Iran’s Civil Code, anyone with an Iranian father is an Iranian national, born in Iran or not. Article 988 says giving it up takes being 25, completing military service, and getting the Council of Ministers to approve it. So someone born in the U.S. who has never set foot in Tehran holds a citizenship they can’t realistically drop, and LSAC’s own profile asks them to disclose it. The applicants who answered honestly are the ones who got locked out.
One private organization holds your test, your transcripts, your recommendation letters, and your applications. Its compliance team flips one switch and your whole cycle stops, over something you didn’t do.If you got that email, don’t wait it out. Applicants who wrote to Compliance@LSAC.org and returned the signed residence attestation with documentation are reporting their accounts restored, some the same night. Rolling admissions doesn’t pause while your file sits in a compliance queue.
JR Commentary: The observations of Mr. Schwartz capture the context of the problem. This is not necessarily an accurate description of the various laws and how they interact.
Part B – There is a difference between being a “resident” and being a “citizen”
The purpose of this post is to explore how confusing “citizenship” with “residency” can create significant and unanticipated problems for individuals simply trying to live their lives in the countries where they actually live.
The inability (or unwillingness) to distinguish citizenship from residence has resulted in a temporary prohibition on Iranian citizens resident in both Canada and the United States from taking the Law School Admission Test (“LSAT”). Clearly, it is important that the differences among the concepts of “residence”, “citizenship” and (I think) “domicile” be understand. A given person’s “residence”, “citizenship” and “domicile” may all be the same. On the other hand, a person’s “residence”, “citizenship” and “domicile” may all be different.
Part C – Heightened U.S. sanctions against Iran have caused this problem
For a more detailed understanding of how the U.S. sanction regime works in general see the Appendixes to this post which include:
Appendix A – The General Regulatory Framework Of Sanctions And Sanctions Against Iran
Appendix B – The August 24, 2026 End Of The Carve Out – Suspension of General License G
Appendix C – Educational Testing Service (“ETS”) Interpretative Statement and general page
Appendix D – How Law Services Interpreted The Sanction To Prohibit Iranian “Citizens” living in the United States and Canada From Taking The LSAT
Appendix E – Excellent Summary – from Military.com
Appendix F – Citizenship Law of Iran – Iranian citizenship is acquired by operation of law
Part D – Standardized testing and educational opportunities
Many educational opportunities are conditioned on being able to take “standardized exams”. These include LSAT, TOEFL, GRE, GMAT, MCAT, etc. Different exams are administered by different testing organizations. For example the TOEFL and GRE are administered the “Educational Testing Service”.
Anybody who has considered becoming a lawyer knows that the Law School Admission Test (“LSAT”) is required. The LSAT is administered by Law Services. Law Services is a private company which controls access to taking the LSAT.
Part E – How U.S. Sanctions laws impact eligibility to take standardized tests – Iran Version
As a general principle § 560.204 – “Prohibited exportation, reexportation, sale, or supply of goods, technology, or services to Iran” – is interpreted to include prohibiting the administration of “standardized tests” in Iran.
Because of this general prohibition, a carveout for “standardized tests” was authorized under § 560.544 – Certain educational activities by U.S. persons in third countries authorized.
This authorization (carve out) was repealed on August 24, 2026 as part of the U.S. war on Iran. The repeal resulted in the default sanction in § 560.204 reverting to the controlling regulation. The controlling regulation can reasonably be interpreted to prevent “United States Persons” (U.S. citizens, residents, individuals inside the United States and entities created under U.S. law) from making standardized available inside Iran. (Note that the regulation clearly applies to U.S. citizens living outside the United States.) The regulation does NOT target “citizens” of Iran!
With the “carve out” repealed on August 24, 2026, the general prohibition applies and a “United States Person” is prohibited from participating in making a standardized test available in Iran. The Educational Testing Service has interpreted the default regulation to mean that it cannot allow for registration for the test outside Iran to be done in Iran. In the words of ETS:
Following the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)’s suspension of General License G, ETS has paused administration of the TOEFL and GRE tests within Iran effective immediately. This action is required to comply with U.S. sanctions law. All affected test appointments within Iran will be cancelled, and ETS will contact test takers directly regarding applicable refunds and next steps.
This restriction applies to testing within Iran and does not prevent an individual from taking the TOEFL or GRE test outside Iran based on Iranian nationality alone. However, ETS is unable to process registrations or payments associated with individuals who are ordinarily resident in Iran, including for test appointments outside the country. Accordingly, individuals residing in Iran should not assume that traveling outside Iran will enable them to register for a TOEFL or GRE test appointment.
https://www.ets.org/iran-testing-update.html
In other words, it is in part, a “payment” and “registration” problem.
Part F – The mistake – Interpreting “resident” to include “citizen
The effects on Iranian residents (and in the case of the LSAT) Iranian citizens was immediate! They sanction prohibited individuals from taking the standardized exams in Iran. In addition, many “residents”of Iran were prohibited taking those tests because of an inability to register.
Law Services (just like Gerry Connolly) mistakenly equated “residence” with “citizenship” and prohibited Iranian citizens from taking the LSAT even if they lived in North America.
As described in Appendix F, Iranian citizenship is easily acquired by “operation of law” and is difficult to renounce. Apparently “accidental Iranians” may suffer the same plight as “accidental Americans”.
Part G – GRE and TOEFL Version – How sanctions against Iranian RESIDENTS prevent them from the GRE and TOEFL (and other standardized tests)
Commentary from the New York Times includes:
The Trump administration’s new sanctions are so wide ranging that they almost seem intended to impact ordinary Iranians, said Kamran Baradaran, an Iranian author who writes about international affairs.
“It remains obscure how this new decision by the U.S. government is supposed to advance the White House’s mandate against the ruling government in Iran,” he said. “In this dynamic, it is not officialdom but ordinary citizens who bear the brunt.”
Part H – LSAT Version – How sanctions against Iranian RESIDENTS and CITIZENS prevented Iranian citizens living in Canada (and the USA) from taking the LSAT
Sanctions against Iran misinterpreted to prevent Iranian CITIZENS (in addition to those “ordinarily resident” in Iran) from taking the LSAT
In summary …
The news in Canada…
Commentary from Reddit – including a screen shot of the email – why you should keep your citizenships priviate:
Iranians Suspended from LSAC Services
byu/IcyAd8942 inlawschooladmissions
Attorney Parviz Malakouti – advice for Iranian citizens barred from taking the LSAT
The general climate – You can’t make this level of stupidity up! LSAC lawyers should be embarrassed by their overly broad reading of the regulation
Some law schools in Canada are simply waiving the LSAT requirement for Iranian citizens
University Victoria Law School waives LSAT requirement for Iranian citizens
https://faclbc.ca/news/13710091
FACL BC Statement on LSAC Restrictions Affecting Iranian Applicants
21 Sep 2026 11:30 AMAnonymous member (Administrator)
The Federation of Asian Canadian Lawyers (British Columbia) Society (FACL BC) is concerned about recent restrictions affecting access to Law School Admission Council (LSAC) services for individuals with Iranian citizenship or residency, including reports that Iranian-Canadian dual citizens residing in Canada have had their accounts restricted.
Although these restrictions arise from changes to U.S. sanctions, their impact is directly felt in Canada. In periods of geopolitical conflict and rapidly changing sanctions regimes, apparent overcompliance by private institutions can have immediate consequences for individuals seeking access to education and professional opportunities in Canada.
The restriction of services based on Iranian nationality, including for dual citizens living outside Iran, raises serious concerns about discrimination and equality of access to Canadian legal education. Canadian applicants should not face barriers to the legal profession because of their nationality or because a U.S.-based service provider applies foreign sanctions more broadly than required.
Part I – The interaction between Iranian citizenship by “operation of law” and the difficulty in terminating Iranian citizenship
A summary of the reality of citizenship by operation of law from Parviz Malakouti …
The citizenship law of Iran is found in the Civil Code of Iran. Specifically Section 976 decrees that an individual born to an Iranian citizen father IS a citizen of Iran. Second, Section 988 states that a citizen of Iran can relinquish Iranian citizens only under conditions that include reaching the age of 25 and completing military service in Iran. Clearly many U.S./Iran or Canadian/Iran dual citizens are claimed as citizens of Iranand held captive to their Iranian citizenship. (U.S. citizens and Iranian citizens have more in common than you might think.)
Like FATCA and U.S. citizenship taxation, LSAC is (improperly) targeting individuals based on “citizenship” when the regulation targets individuals based on residence.
A reading of the regulation that equates “citizenship” with “residence” is a gross and indefensible reading of the law!
In addition, (like citizenship taxation) the regulation is being interpreted to apply to individuals based on the circumstances of their birth, rather than the circumstances of their life. In addition, the denial of the opportunity to take the LSAT reinforces why it is probably not a good idea to disclose your portfolio of citizenships to third parties. Think of it: a Canadian citizen residing in Canada is preveneted from taking the LSAT not because of anything he has done, but because and only because her is a citizen of Iran. Futhermore, Iranian citizenship is obtained by operation of law (born to an Iranian citizen father) and CANNOT be easily relinqished.
To put it simply:
The Iranian citizen living in Canada is being unfairly targeted in the same way that U.S. citizens living in Canada are unfairly targeted.
Part J – How I think the law and sequence of events should have been interpreted
Law Services has confused “citizenship” with “residence” and this is a mistake. That said, I don’t believe that it even matters.
The correct interpretation of the laws is (I believe):
1. The Treasury Regulation created sanctions against Iran. The effect of the sanction was that no “U.S. Person” could offer or facilitate the offering of standardized tests in Iran.
2. A special license (“carveout”) was provided that allowed for testing to be offered in Iran. The “carveout” did mention individuals who were resident in Iran but did NOT mention citizenship. This means that the “citizenship” vs. “residence” distinction was relevant ONLY for the “carveout”.
3. On August 24, 2026 the “carveout” was repealed. This means that the sanction applies as though the carveout never existed.
4. Once the “carveout” is repealed the initial sanction takes effect again. The initial sanction simply prohibits offering the testing in Iran. The initial sanction makes no mention of “citizenship” or “residence”.
5. Therefore, compliance with the sanction means that the LSAT, GMAT, TOEFL, etc. may not be offered in Iran. This has NOTHING at all do with individuals living outside Iran who happen to be Iranian citizens by operation of law.
John Richardson – Follow me on X.com/ExpatriationLaw
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Appendix A – The General Regulatory Framework Of Sanctions And Sanctions Against Iran
https://ofac.treasury.gov/selected-general-licenses-issued-ofac
https://ofac.treasury.gov/recent-actions/20140320
https://ofac.treasury.gov/media/7966/download?inline
The general sanction against Iran
https://www.law.cornell.edu/cfr/text/31/560.204
31 CFR § 560.204 – Prohibited exportation, reexportation, sale, or supply of goods, technology, or services to Iran.
CFR
§ 560.204 Prohibited exportation, reexportation, sale, or supply of goods, technology, or services to Iran.
Except as otherwise authorized pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to May 7, 1995, the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran is prohibited, including the exportation, reexportation, sale, or supply of any goods, technology, or services to a person in a third country undertaken with knowledge or reason to know that:
(a) Such goods, technology, or services are intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran or the Government of Iran; or
(b) Such goods, technology, or services are intended specifically for use in the production of, for commingling with, or for incorporation into goods, technology, or services to be directly or indirectly supplied, transshipped, or reexported exclusively or predominantly to Iran or the Government of Iran.
Who is a United States Person?
https://www.law.cornell.edu/cfr/text/31/560.314
31 CFR § 560.314 – United States person; U.S. person.
CFR
§ 560.314 United States person; U.S. person.
The term United States person or U.S. person means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
The “Carve Out” – General License G – 544
https://www.law.cornell.edu/cfr/text/31/560.544
31 CFR § 560.544 – Certain educational activities by U.S. persons in third countries authorized.
CFR
§ 560.544 Certain educational activities by U.S. persons in third countries authorized.
(a) Subject to the restriction set forth in paragraph (c) of this section, accredited undergraduate degree-granting academic institutions organized under the laws of the United States or any jurisdiction within the United States or located in the United States (“U.S. undergraduate institutions”) with undergraduate educational programs or undergraduate exchange programs in countries other than the United States or Iran are authorized to engage in the following activities with respect to such programs in the humanities, social sciences, law, and business:
(1) Recruit, hire, and employ faculty and staff who are ordinarily resident in Iran;
(2) Recruit, enroll, and educate students who are ordinarily resident in Iran;
(3) Enter into and perform exchange agreements with Iranian universities;
(4) Provide scholarships to students ordinarily resident in Iran; and
(5) Recruit individuals ordinarily resident in Iran, such as scholars, artists, performers, speakers, alumni, and students, to participate in events, such as conferences, lectures, film series, research workshops, exhibitions, theatrical and musical performances, and continuing education courses. U.S. undergraduate institutions are authorized to provide compensation, including honoraria, to such individuals.
(b) Subject to the restriction set forth in paragraph (c) of this section:
(1) Paragraph (a)(2) of this section authorizes the release of technology or software to students ordinarily resident in Iran, provided that all of the following requirements are met:
(i) Such release is ordinarily incident and necessary to the undergraduate educational program or the undergraduate exchange program at the U.S. undergraduate institution in which the student is enrolled;
(ii) The technology or software being released is designated as EAR99 under the Export Administration Regulations, 15 CFR parts 730 through 774 (the “EAR”), or constitutes Educational Information not subject to the EAR, as set forth in 15 CFR 734.9;
(iii) The release does not otherwise require a license from the Department of Commerce; and
(iv) The student to whom the release is made is not enrolled in the undergraduate educational program, or participating in the undergraduate exchange program, as an agent, employee, or contractor of the Government of Iran or a business entity or other organization in Iran.
(2) This section authorizes enrollment in undergraduate courses in math, sciences, and engineering that are required or electives for undergraduate programs in the humanities, social sciences, law, or business provided the following conditions are met:
(i) The undergraduate courses are required for the completion of the humanities, social sciences, law, or business program and are for “introductory,” non-major, freshman or sophomore equivalent courses only; or
(ii) The undergraduate courses are required for the completion of the humanities, social sciences, law, or business program and are math-related accounting or economics classes at any undergraduate level, not to include courses allowing for any post-graduate work.
(c) This section does not authorize the exportation or reexportation to Iran or the Government of Iran of any goods (including software) or technology, including any release of technology or software described in § 560.418 of this part, except as expressly authorized in paragraph (b) of this section.
(d) Specific licenses may be issued on a case-by-case basis authorizing accredited graduate degree-granting academic institutions organized under the laws of the United States or any jurisdiction within the United States or located in the United States with graduate educational programs or graduate exchange programs in third countries to recruit, hire, and employ faculty and staff who are ordinarily resident in Iran for such third-country graduate educational programs in the humanities, social sciences, law, and business or graduate exchange programs in the humanities, social sciences, law, and business, and to recruit, enroll, and educate students who are ordinarily resident in Iran in such third-country graduate educational programs in the humanities, social sciences, law, and business or graduate exchange programs in the humanities, social sciences, law, and business.
Editorial Note:
At 91 FR 54958, Aug. 26, 2026, § 560.544 was stayed indefinitely.
Appendix B – The August 24, 2026 End Of The Carve Out – Suspension of General License G
https://www.skadden.com/insights/publications/2026/09/us-government-announces-new-iran-sanctions-measures
https://ofac.treasury.gov/media/7966/download?inline
Appendix C – Educational Testing Service (“ETS”) Interpretative Statement and general page
https://www.ets.org/iran-testing-update.html
Appendix D – How Law Services Interpreted The Sanction To Prohibit Iranian “Citizens” living in the United States and Canada From Taking The LSAT
Commentary from Reddit – including a screen shot of the email – why you should keep your citizenships private:
https://www.reddit.com/r/lawschooladmissions/comments/1wc03b7/iranians_suspended_from_lsac_services/
University Victoria Law School waives LSAT requirement for Iranian citizens
https://faclbc.ca/news/13710091
FACL BC Statement on LSAC Restrictions Affecting Iranian Applicants
21 Sep 2026 11:30 AMAnonymous member (Administrator)
The Federation of Asian Canadian Lawyers (British Columbia) Society (FACL BC) is concerned about recent restrictions affecting access to Law School Admission Council (LSAC) services for individuals with Iranian citizenship or residency, including reports that Iranian-Canadian dual citizens residing in Canada have had their accounts restricted.
Although these restrictions arise from changes to U.S. sanctions, their impact is directly felt in Canada. In periods of geopolitical conflict and rapidly changing sanctions regimes, apparent overcompliance by private institutions can have immediate consequences for individuals seeking access to education and professional opportunities in Canada.
The restriction of services based on Iranian nationality, including for dual citizens living outside Iran, raises serious concerns about discrimination and equality of access to Canadian legal education. Canadian applicants should not face barriers to the legal profession because of their nationality or because a U.S.-based service provider applies foreign sanctions more broadly than required.
FACL BC Director Nyusha Samiei, acting in her personal capacity, has raised these concerns with law schools in British Columbia and other legal institutions. Canadian law schools have begun considering accommodations for affected applicants. The University of Victoria’s Faculty of Law has publicly confirmed that it will waive the LSAT requirement for applicants unable to access LSAC services because of these restrictions. The University of British Columbia’s Peter A. Allard School of Law and Thompson Rivers University’s Faculty of Law have also acknowledged the issue and indicated that they are considering accommodations for the current admissions cycle.
FACL BC welcomes these steps and encourages Canadian law schools to ensure that affected applicants are not disadvantaged. Applicants whose LSAC accounts have been restricted should also contact LSAC directly, as some affected individuals residing outside Iran have been able to regain access after providing additional documentation.
More broadly, this situation highlights the vulnerability created when access to Canadian legal education depends on a U.S.-based institution subject to foreign laws and sanctions. FACL BC encourages Canadian law schools to work together on immediate accommodations and longer-term safeguards, including consideration of Canadian-administered alternatives.
FACL BC remains committed to equity and meaningful access to the legal profession in British Columbia and across Canada.
Appendix E – Excellent Summary
https://www.military.com/us-sanctions-blocked-iranian-lsat-access-law-school-students
Appendix F – Citizenship Law of Iran – Iranian citizenship is acquired by operation of law
In relevant part …
Section 976 0 A person born anywhere in the world to an Iranian citizen father IS an Iranian citizen.
Section 988 – Iranian citizenship requires approval to renounce and can be renounced only under conditions that include (1) being over the age of 25 and (2) having completed military service in Iran.
Iran Civil Code (Articles 976 and 988)