Bank Account Refused Because of US Sanctions: The Automatic Refusal Struck Down (CJEU, 11 June 2026, Case C-81/24)

CJEU, 4th Chamber, 11 June 2026, Case C-81/24 [Jenec]

What Happened in This Case?

It all begins with an everyday gesture. On 22 October 2017, an individual, referred to in the proceedings by the initials LH, tried to pay at a petrol station in Ljubljana, Slovenia, a bill made out in his wife’s name, from her bank account opened with the bank OTP (formerly Nova Kreditna Banka Maribor). The station attendant entered LH’s personal data into the payment system. And then, surprise: the bank blocked the payment.

In the letter sent to the account holder to explain this block, the bank stated that, “in view of political events, the increased danger to general security and an increased possibility of abuse of banking products for the purposes of financing terrorism and other serious offences”, it had adopted a series of stricter measures to meet its anti-money laundering obligations. Among those measures, according to an internal bank document, was compliance with the restrictions imposed by the Office of Foreign Assets Control (OFAC), the US office for the control of foreign assets.

LH then turned to the Slovenian courts. Then, on 23 March 2022, he asked the bank OTP directly to open in his name a payment account with basic features, the “basic account” guaranteed by EU law to every consumer legally resident in the European Union. After presenting his identity card, he was told that “the banking system did not allow” such an account to be opened with that bank. He asked for a written decision giving reasons for this refusal: he never obtained one. Before the District Court of Maribor, LH therefore amended his claims to seek an order that the bank open this basic account for him.

Why Did the Bank Refuse to Open the Account?

The reason for the refusal comes down to four letters: OFAC. LH’s name appears on a list of persons subject to restrictive measures drawn up by that US Treasury office. Yet, and this is a central element of the case, the Slovenian court notes circumstances that give pause:

The Slovenian specialised public prosecutor’s office closed and archived, as early as 23 February 2015, the proceedings brought against LH concerning the very offences that had led to an international arrest warrant being issued against him. LH has not been convicted anywhere in the world of the criminal offence for which his name is entered on the OFAC list. And no restrictive measure has been imposed on him by the United Nations, the European Union or the Republic of Slovenia.

In other words: a man never convicted, cleared by the justice system of his own country, and targeted by no European or international sanction, is denied the most basic access to the banking system, a simple payment account, on the sole basis of a list drawn up unilaterally by a third State.

What Questions Did the Slovenian Court Put to the CJEU?

The District Court of Maribor put four questions to the Court. The first, the only one the Court will answer, is decisive: does Article 16(4) of Directive 2014/92/EU allow Member States to require banks to refuse a consumer the opening of a payment account with basic features because that consumer is on an OFAC list, on the ground that opening such an account would breach the rules on the prevention of money laundering and terrorist financing arising from Directive (EU) 2015/849?

The other three questions, put in the alternative, concerned in particular the compatibility of such a refusal with Article 48 of the Charter of Fundamental Rights of the European Union, which guarantees the presumption of innocence. The bank also argued that the reference was inadmissible; the Court dismisses all of its objections and declares the questions admissible.

What Is a Payment Account With Basic Features?

Article 16(2) of Directive 2014/92 enshrines a genuine individual right: Member States must ensure that consumers legally resident in the Union, including those with no fixed address, asylum seekers and persons without a residence permit whose expulsion is impossible, have the right to open and use a payment account with basic features.

This right is not absolute, however. Article 16(4) of the same directive requires Member States to ensure that banks reject an application for opening “where opening such an account would result in an infringement of the provisions on the prevention of money laundering and the countering of terrorist financing” laid down by Directive 2015/849. It is precisely the interplay between this European right to an account and anti-money laundering obligations that was at the heart of the case.

But the directive itself sets the safeguards. Its recital 34 states that anti-money laundering provisions “should not be used as a pretext for refusing commercially less attractive consumers”. Its recital 47 specifies that a refusal “can only be justified where the consumer fails to comply with that legislation and not on the sole ground that the procedure for verifying such compliance is too burdensome or too costly”. The scene is set: the anti-money laundering exception is to be interpreted strictly.

What Does the CJEU Decide on a Refusal Based on an OFAC List?

The Court’s answer is clear. In its operative part, it rules that Article 16(4) of Directive 2014/92, read in conjunction with Directive 2015/849, “does not allow Member States to require credit institutions to refuse a consumer the opening of a payment account with basic features solely on the ground that that consumer is on a list of persons subject to restrictive measures imposed by a third country, without the credit institution concerned having carried out an individual assessment of the money laundering or terrorist financing risk associated with the proposed business relationship”.

Given this negative answer to the first question, the Court did not have to rule on the questions relating to the presumption of innocence: those were put only in the event of an affirmative answer.

Why Is Inclusion on the OFAC List Not Enough?

The Court’s reasoning unfolds in two steps. First step: the right to a basic account yields only to an actual breach of the anti-money laundering rules of Directive 2015/849. It is therefore necessary to examine what that directive really requires of banks.

Second step: the Court finds that Directive 2015/849 “does not provide that inclusion on an OFAC list or on any other list of the same kind drawn up by a third country automatically prohibits a credit institution from entering into a business relationship with the customer concerned”. The text requires banks to apply customer due diligence measures (Article 13: identifying the customer, verifying their identity, identifying the beneficial owner, assessing the purpose of the business relationship) and obliges them to refuse the relationship only where they are unable to comply with those obligations (Article 14(4)).

Yet, in this case, the Court notes, subject to the assessment of the national court, that none of those conditions appeared to be met: LH was identified, it was not alleged that he would not be the beneficial owner of the proposed account, and the bank had refused “for the sole reason that that customer was on the OFAC list”. The automatic refusal therefore had no basis in the anti-money laundering directive itself.

What Does the Individual Risk Assessment Involve?

This is the core of the judgment. Relying on its Rodl & Partner case law (CJEU, 17 November 2022, C-562/20), the Court recalls that Directive 2015/849 is based on a “risk-based approach”, which presupposes an assessment carried out at three levels: at Union level by the Commission, at the level of each Member State, and at the level of the obliged entities themselves. This assessment conditions the adoption of appropriate due diligence measures for each customer: without it, it is impossible to decide case by case which measures to apply.

Recital 22 of Directive 2015/849 says so expressly: the risk-based approach “involves the use of evidence-based decision-making”. Not presumptions, not foreign lists applied mechanically: evidence.

The Court draws from this a clear framework: a person’s inclusion on an OFAC list “may constitute a relevant risk factor” that the bank is required to take into account. But in the presence of such a factor, the directive does not require automatic refusal: it requires the application of “enhanced due diligence measures, after carrying out an individual assessment of all the relevant risk factors in the circumstances surrounding the proposed business relationship”.

The Court adds an element of assessment that will weigh heavily in practice: “the very nature of a payment account with basic features, whose functionalities are limited, reduces the money laundering or terrorist financing risk that may be associated with its opening”. A basic account allows neither complex structures nor massive international flows: the money laundering risk argument therefore structurally has less purchase here than for other banking products.

Can the Bank Still Refuse After This Assessment?

Yes, but only in a narrowly circumscribed situation. The Court reserves the case where, at the end of the individual assessment, the bank would conclude that it “is unable to manage effectively, through measures proportionate to its nature and size, the money laundering or terrorist financing risk associated with a business relationship”, even one limited to a basic account. “Only in that case” can a refusal be based on Article 16(4) of Directive 2014/92.

In practical terms, the Slovenian court will have to verify two things: first, whether the refusal opposed to LH was based on an individual assessment taking into account all the relevant factors, beyond mere inclusion on the OFAC list; second, whether the bank was able to ensure, through proportionate measures, the ongoing monitoring of the business relationship provided for in Article 13(1)(d) of Directive 2015/849 if the account were opened.

The burden of argument is thus shifted from the customer to the bank: it is no longer for the applicant to show that he is respectable, it is for the institution to justify, with evidence, that it cannot manage the risk. This reversal of perspective is anything but trivial for future litigation.

What Is the Scope for Customers of French Banks?

Are US Sanctions Binding on European Banks?

The judgment brings a welcome clarification on a phenomenon well known to practitioners: the over-application of US sanctions by European banks. Out of fear of sanctions from the US regulator (the fines imposed on major European banking groups left their mark), many institutions build OFAC lists into their screening tools and draw automatic consequences from them: blocked payments, refusals to enter into a relationship, account closures.

The CJEU recalls a legal truism that is sometimes lost sight of: a list drawn up by a third country is not a source of law in the European Union. The restrictive measures binding on European banks are those adopted by the UN and by the Union, and in this case neither targeted LH. The OFAC list may feed the bank’s risk analysis; it cannot replace it. It may also be recalled that the Union has long had an instrument, Regulation (EC) No 2271/96, known as the “blocking statute”, designed precisely to counter the extraterritorial effects of certain third-country legislation: the European legal order has never accepted that foreign sanctions should dictate the conduct of its operators.

For customers of French banks whose names (or namesakes, a recurring source of unjustified blocks) appear in screening databases fed by foreign lists, the judgment offers solid support: a refusal or block based solely on the presence in such a database, without individual analysis, disregards EU law.

How Does This Judgment Fit With the French Right to a Bank Account?

France has long had a robust banking inclusion mechanism: the right to a bank account under Article L. 312-1 of the Monetary and Financial Code. When a bank refuses to open a deposit account, the applicant may apply to the Banque de France, which designates an institution required to open the account. The designated institution must provide basic banking services free of charge.

The judgment of 11 June 2026 feeds directly into this mechanism. French banks, like their Slovenian counterparts, can invoke anti-money laundering regulation to defeat the right to an account only on condition of demonstrating a genuine impossibility, assessed in concreto, of managing the risk associated with the customer. A stereotyped refusal referring to “due diligence obligations” or “the group’s compliance policy”, without a documented individual assessment, does not meet the requirements of EU law as interpreted by the Court.

The judgment also reinforces the requirement of traceability: in the Slovenian case, LH had asked in vain for a written decision. The logic of individual assessment assumes that the bank is able to produce that assessment, and Article 13(4) of Directive 2015/849 precisely requires obliged entities to be able to demonstrate to the authorities that their measures are appropriate in view of the risks identified. A bank that can produce nothing other than an alert from its screening tool risks having its refusal held unlawful.

What Lessons for Account Closures and De-Risking?

Although the judgment rules on a refusal to open an account, its reasoning is bound to radiate well beyond. The condemnation of automatic responses applies to the whole banking relationship: the logic of individual assessment, based on evidence and specific to each business relationship, is that of Directive 2015/849 as a whole, whether the bank is deciding on entering into a relationship, on blocking a transaction (like LH’s payment at the petrol station) or on ending the relationship.

Victims of abrupt account closures motivated by vague compliance considerations will find a weighty argument here: a bank that closes an account solely on the strength of a screening alert, without individual assessment or examination of the enhanced due diligence measures that would allow the relationship to be maintained, is applying precisely the method the Court has just censured. Each situation remains to be assessed according to the basis for the closure and the terms of the account agreement, but the direction is clear: the era of the reflex refusal is coming to an end.

What Should You Do If Your Bank Refuses to Open an Account?

First step: demand a written record. Under French law, a bank that refuses to open a deposit account must give the applicant, free of charge, a certificate of refusal and inform them of the existence of the right to a bank account. This certificate is the key to the procedure before the Banque de France. The LH case illustrates institutions’ temptation to refuse orally, leaving no trace: never settle for that.

Second step: invoke the right to a bank account. The request for designation can be filed with the Banque de France, which designates a credit institution required to open the account. This procedure is free and does not require a lawyer.

Third step: if the refusal causes you harm (inability to receive a salary or benefits, blocked transactions, damaged image with partners), a liability claim against the bank may be considered. The judgment of 11 June 2026 now provides a precise standard: it will be enough to show that the refusal was based on an automatic response (screening alert, foreign list, group policy) and not on an individual risk assessment. The assistance of a banking law attorney is valuable here to formulate the request, obtain disclosure of the assessment allegedly carried out and quantify the loss.

Why Is This Judgment Good News for Banking Inclusion?

The judgment of 11 June 2026 puts things back in their place. A bank account is not a privilege that institutions grant to customers who trigger no alert in their tools: it is a right, enshrined by the European legislature precisely for those whom the market neglects. And the fight against money laundering, however pressing, is a discipline of evidence and analysis, not a convenient stamp for turning away profiles deemed cumbersome.

By requiring an individual, evidence-based assessment of all the risk factors, and by stressing that the basic account, with its limited functionalities, presents a structurally reduced risk, the Court gives European consumers a concrete lever against automatic refusals and the silent tyranny of screening lists. It also recalls, by implication, that the sanctions of a third country, however feared by compliance departments, are not law in the Union.

For people deprived of an account, blocked in their payments or dropped by their bank on the basis of opaque compliance alerts, the message is clear: EU law is on your side, and national courts now have a precise framework of analysis to penalise unreasoned refusals. The firm assists clients facing these situations, from the request for explanations to legal action.

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