Issues in connection with the closing of accounts of foreign nationals and firms under foreign ownership

The Bank of Slovenia has recently seen a rise in the number of cases of commercial banks closing the payment accounts of foreign nationals and Slovenian firms under foreign ownership. Our assessment is that commercial banks are primarily taking this action on the basis of legislation governing AML/CFT (Prevention of Money Laundering and Terrorist Financing Act [ZPPDFT-1]). Consequently certain commercial banks are introducing stricter policies with regard to the acceptance or continuation of transactions with customers who are not residents of Slovenia or with legal persons that are owned by non-residents.

The Bank of Slovenia must emphasise that it is not a matter of Bank of Slovenia instructions, as is sometimes erroneously stated in the reasoning for business decisions on the part of banks. Entering into or terminating a business relationship, such as opening or closing a current account, is solely a business decision for the bank in question, unless entering into or continuing the business relationship would constitute a breach of restrictive measures applicable in Slovenia. As the supervisor, the Bank of Slovenia expects banks to uphold the applicable legislation adopted by the National Assembly (including the transposition of the requirements of EU directives).

Within this framework the Bank of Slovenia therefore expects banks to consistently uphold existing legislation in the case of the ZPPDFT-1. For transactions with non-residents, the ZPPDFT-1 sets out stricter conditions in the implementation of measures for preventing and managing risks in the area of money laundering and terrorist financing (particularly with non-residents from high-risk third countries), which do not necessarily include refusal or termination of transactions.

The Bank of Slovenia should also highlight the following rights of non-residents regulated by the Payment Services, Electronic Money Issuance Services and Payment Systems Act (ZPlaSSIED):

• A payment service provider may terminate a framework contract concluded for an indefinite period only with a notice period of at least two months (unless the contract stipulates a longer notice period). In this event the user pays any charges only proportionally up to the termination of the contract.
   
• Any consumer lawfully resident in the EU has the right to a payment account with basic features. Opening an account of this type needs to be specifically requested, as the application to open a personal (current) account does not also constitute an application to open a payment account with basic features. Consumers with no fixed address, asylum-seekers, and consumers whose residence permit has not been granted but whose expulsion is impossible for legal or factual reasons are also entitled to such accounts. A bank should only refuse an application to open a payment account with basic features when opening an account of this type would entail a breach of legislation governing AML/CFT. A prohibition on entering into a business relationship is only set out under the ZPPDFT-1 in special cases (e.g. when the obliged entity cannot conduct customer due diligence, when the conditions of customer due diligence via a third party are not met, when the customer discloses the ownership of a legal person or a similar entity of foreign law on the basis of bearer shares whose traceability is not provided for via KDD). Refusal is also possible, but not necessary, if (i) the consumer already has a payment account at a Slovenian bank, (ii) the consumer breaches a contractual obligation to the bank or has done so in the last three years, or (iii) the bank has information that a record of unexecuted orders for enforcement or forcible recovery has been established in the payment account.

The Bank of Slovenia has already informed the relevant ministries of this issue in connection with the opening (or not) of payment accounts.

Information about opening and closing payment accounts is also available on the Bank of Slovenia website.