EU Court Limits Reach of US Sanctions in Banking Disputes

The case concerns a 2022 incident involving a Slovenian customer, identified as LH, who was denied access to basic banking services by Nova Kreditna Banka Maribor. The bank cited the individual's appearance on a list maintained by the U.S. Office of Foreign Assets Control (OFAC) as the primary justification for the refusal. However, the court emphasized that LH had not been convicted of the criminal offenses tied to his OFAC listing and remained free from sanctions imposed by the UN, the EU, or Slovenia.

While banks must adhere to strict anti-money laundering and anti-terrorism regulations, the ruling dictates that these requirements do not grant institutions a blanket power to reject clients based solely on foreign designations. The court acknowledged that third-country sanctions can serve as a risk factor during due diligence, but they do not create an automatic legal prohibition against establishing a business relationship. The judgment reinforces the principle that any legal resident of the European Union retains the right to a basic bank account unless a specific, domestically recognized violation of security or financial law is proven.