On 11 June 2026, the Court of Justice of the European Union (CJEU) ruled in Case C-81/24 [Jenec] that inclusion on a US sanctions list is not sufficient, on its own, for a refusal to open a bank account. Refusal is only possible after the bank assesses the risk of money laundering and terrorist financing, and this assessment is done on an individual basis.
Background
In 2022, a Slovenian bank declined to open a basic payment account for an individual because he appears on the US Office of Foreign Assets Control (OFAC) sanctions list. The bank stated this decision was compliant with Slovenian anti-money laundering and counter-terrorist financing laws.
The OFAC-sanctioned individual, however, had never been convicted of a crime and was not subject to sanctions by the UN, EU or Slovenia. The individual brought proceedings before the Slovenian courts to compel the bank to open the account.
The Slovenian court referred the matter to the CJEU, seeking clarification on whether the bank’s refusal was justified under the Directive 2014/92 and Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AML/CFT).
Reasoning of the Court
The Court confirmed any consumer who is a lawful resident of the EU can open and use a basic payment account. That entitlement is, however, conditional on compliance with rules on preventing money laundering and combating terrorism.
An individual’s mere appearance on the OFAC list, or on any similar list compiled by a third country, does not, by itself, bar a EU bank from entering into a business relationship with that person. Such inclusion, however, can be a relevant factor the bank must consider when carrying out an individual assessment of money laundering and terrorist-financing risks.
Although the limited functions of a basic-payment account reduce that risk, the bank may conclude after a specific assessment that it cannot effectively manage, through measures proportionate to its nature and size, the risk of money laundering or terrorist financing associated with a relationship with someone listed in that way.
Consequences
The ruling of the CJEU concerns only certain types of bank account, namely payment accounts with basic features (i.e. a basic payment account). These accounts are defined in Directive 2014/92/EU as accounts with credit institutions that enable consumers legally resident in the EU to carry out basic payment transactions, particularly deposits, withdrawals, credit transfers, direct debits and card payments.
A reference to the Court for a preliminary ruling enables member state courts and tribunals to submit questions to the CJEU on how EU law should be interpreted or on the validity of an EU act. The Court does not determine the specific dispute, which is resolved by the national court or tribunal in line with the CJEU ruling, which is binding on other national courts or tribunals faced with a similar question.
The ruling contains its own limitation. The Court clearly stated that even if the functionality of a basic payment account reduces money laundering and terrorist financing risk, the bank may still conclude it cannot effectively manage such a client relationship based on an individual assessment.
From a Swiss legal standpoint, the Court does not have direct jurisdiction over Swiss legal decisions. Due, however, to Switzerland's close economic ties with the EU and the extensive bilateral treaties between the two, the CJEU may influence certain Swiss matters, particularly in disputes concerning Swiss-EU bilateral agreements. In the area of AML/CFT, however, Switzerland remains largely independent except for influence from the Financial Action Task Force.
Conclusion
This ruling by the Court is a positive sign that tempers the growing regulatory trend of associating sanctions and AML/CFT with the policy of pushing financial intermediaries to align their analyses of both regimes and increase their reporting. This conclusion must, however, be qualified, since the Court's decision contains reservations. Furthermore, regulatory pressure is unlikely to ease in the forthcoming years, whether in Switzerland or in the EU.
For more information on compliance and sanctions regulations in Switzerland, contact your CMS client partner or the local CMS expert who contributed to this article.
