US sanctions alone insufficient to deny bank account in Slovenia, EU court rules

A ruling by the EU Court of Justice has determined that a Slovenian bank, NKBM/OTP in Maribor, cannot reject an account application based solely on the applicant's presence on a U.S. sanctions list. The court clarified that such a refusal is permissible only after the bank conducts an individualized assessment of the risks associated with money laundering or terrorism financing.

This judicial decision from Luxembourg aims to prevent the over-application of sanctions by financial institutions. It suggests that blanket rejections based on external lists are not sufficient grounds for denying essential banking services. Banks are now required to perform their due diligence and evaluate each case on its own merits.

The outcome of this case may indirectly influence discussions surrounding the excessive compliance with U.S. sanctions. This is particularly relevant for prosecutors and judges of the International Criminal Court (ICC), including Beti Hohler from Slovenia, who have reportedly faced account closures by EU banks. The ruling could provide a basis for challenging such closures.

By mandating a case-by-case risk assessment, the court seeks to balance the need for compliance with international sanctions regimes against the right of individuals to access financial services. This approach aims to ensure that sanctions are applied precisely and do not unduly penalize individuals who may not pose a genuine risk.

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Refusal is possible only after an individualized risk assessment for money laundering or terrorism financing, conducted by the bank.