Obligation of a bank to provide a bank account to a non-consumer customer

December 20, 2022

24 January 2022


Yin Yang et.al. (Yin Yang) is a group of companies that operate a sauna club. Yin Yang has several business accounts with ING Bank N.V. (ING) and also an agreement with ING to deposit cash, the verpakt afstorten agreement (the deposit agreement). In 2016, police searched Yin Yang's premises and found cash, drugs and weapons. Yin Yang received quite a bit of media attention as a result of the search.

Following the police search, ING carried out a customer survey. That investigation showed that in one year Yin Yang had deposited almost EUR 5 million in cash with ING, compared to almost EUR 1 million in debit card transactions during the same period. According to ING, Yin Yang had not provided sufficient information to the bank for it to be able to trace the origin of the cash. As a result, ING could  not guarantee regulators that its accounts were not being used for money laundering. By letter dated March 10, 2017 ING therefore announced that it was terminating the deposit agreement with immediate effect. In addition, by letter dated April 14, 2017, ING notified Yin Yang that it wished to terminate the banking relationship because ING no longer had confidence in continuing it.

Yin Yang subsequently demanded in summary proceedings that ING continue the banking relationship. The District Court denied Yin Yang's demands, but the Court of Appeal reversed the District Court’s judgment and ordered ING to continue the banking relationship until January 1, 2018. In the following period, Yin Yang took various measures to mitigate integrity risks and tried to open a bank account at other banks, but without success.

Meanwhile, the Public Prosecutor's Office had informed the two directors of Yin Yang that a criminal investigation was underway against them in connection with money laundering. Eventually, by letter dated November 8, 2017, ING terminated the banking relationship with Yin Yang as of January 1, 2018. Yin Yang thereupon initiated summary proceedings and claimed (once again) continuation of the banking relationship with ING and continuation of the deposit agreement. The District Court again denied this claim. This time the Court of Appeal largely upheld the District Court’s judgment, but did order ING to continue the banking relationship and the deposit agreement on packed deposits through to February 16, 2018.

In the summer of 2018, a settlement was reached between the two directors of Yin Yang and the Public Prosecutor’s Office regarding the charge of exchanging cash three times without having a valid license for this. As to the other (alleged) criminal acts, the Public Prosecutor's Office dismissed the criminal case against Yin Yang and its directors. Despite the dismissal, ING refused to continue or reinstate the deposit agreement and the banking relationship with Yin Yang.

Yin Yang again initiated summary proceedings and claimed that ING should be ordered to continue or reinstate the deposit agreement and the banking relationship with Yin Yang. This time the District Court granted the claims on the condition that, with respect to the deposit agreement, Yin Yang met certain conditions. ING subsequently argued that Yin Yang had not met those conditions and did not reinstate the deposit agreement. Summary proceedings were again initiated in which ING was ordered in the first instance to continue or reinstate the deposit agreement and the banking relationship with Yin Yang. However, Yin Yang lost that case in appeal. ING subsequently announced that it would proceed with the settlement of all of Yin Yang's accounts. Yin Yang then again claimed in summary proceedings that ING should be ordered to continue or reinstate the deposit agreement and the banking relationship with Yin Yang.

Summary proceedings and appeal

In these final summary proceedings the District Court denied the claims. In appeal, the Court of Appeal interpreted Yin Yang's claims as demanding that ING be ordered to enter into a new banking relationship and a new agreement for packaged deposits. The Court of Appeal set aside the judgment in first instance and ordered ING to allow Yin Yang to maintain a bank account with ING, without obliging ING to offer a facility for depositing cash.

In doing so, the Court of Appeal considered the interests of, on the one hand, the principle of freedom of contract, under which everyone has the right not to be obliged to enter into a contractual relationship with another person, and, on the other hand, the social function of banks, under which banks have a special duty of care towards third parties whose interests banks must take into account on the basis of what is customary in social and economic life according to generally accepted standards. The Court of Appeal pointed out that not having a bank account makes it virtually impossible to participate in society. In this respect, it referred to Section 4:71f of the Financial Supervision Act. This Section obliges banks within the EU to provide consumers with the opportunity to open a bank account. The Court acknowledged that this Section applies to consumers and not to legal entities such as Yin Yang, but according to the Court of Appeal this does not mean that ING's contractual freedom in respect of Yin Yang is unlimited. Therefore, the Court of Appeal concluded that ING may also be obliged, under special circumstances, to enter into a banking relationship with a legal person.

The Court of Appeal then assessed, having consideration for the circumstances of the case at that time, whether ING was obliged to do so and concluded that it was insofar as far this concerned providing a bank account. However, ING was not obliged to also offer a facility for depositing cash. In respect of the latter, the Court of Appeal argued that the money-laundering and integrity risks for ING were too great in this specific case where Yin Yang failed to check the identity of its customers, register personal data, made many cash payments and operated in the integrity-sensitive relaxation sector. In addition, the Court of Appeal noted that Yin Yang can also participate in society without the agreement to make cash deposits.

The Supreme Court judgment

The Supreme Court confirmed the correctness of the starting point taken by the Court of Appeal that banks may have a duty to provide a non-consumer customer with a bank account given their social position and function. It is virtually impossible, even as a business, to participate in society without a bank account. The Supreme Court recognized that banks may have a legitimate interest in refusing certain customers because of regulatory requirements or integrity risks and that this interest may prevent a bank from being obliged to provide a bank account to a customer. The Supreme Court ruled that the Court of Appeal had weighed up these interests and had not motivated its decision incomprehensibly or insufficiently.

Meijburg Legal comments

The Supreme Court clarified that a bank may be obliged to offer a bank account to customers, even when these clients do not qualify as consumers. A bank should balance the interests involved, whereby the bank has an interest in the principle of freedom of contract being respected and the bank's client has an interest in being able to establish and maintain a bank account so that it can participate in society.

If you are having problems opening or maintaining a bank account or if you have questions concerning this, please feel free to contact the specialists at Meijburg Legal.

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