Date of publication: 6 October 2017
Ruslan Mannapov, Lawyer
As a general rule, it is unacceptable to restrict the banks’ clients in their right to dispose of their funds on their accounts. The purposes of using money are also beyond the banks’ competence. Yet, there are exceptions to the general rule provided by the law.
In particular, the exceptions to the rule are regulated the Law No. 115-FZ On Counteraction to Legalization (Laundering) of Proceeds of Crime and Terrorist Financing.
The room for suspicion here is very vast, and the criteria for assessing the clients’ actions are rather blurred. For example, banks have the right to completely freeze all transactions on the account on the basis of information that the client is on the list of legal entities and individuals suspected of extremism or terrorism (including of the terrorism financing). However, the company may not be listed on the official list. A particular transaction may be denied, for example, because of the client’s failure to provide the requested documents or because the bank acknowledged that the transaction is suspicious. The address of massive registration, unclear payment details, dubious head of the company – any of these can play against the client.
In addition, there are numerous recommendations of Rosfinmonitoring and the Bank of Russia, which banks, fearing of license revocation, take as a direct guide for action. For example, the Central Bank recommends paying greater attention to the clients whose transactions “have no obvious economic sense and legitimate purpose” (letter No. 236-T dated 31 December 2014). These include “crediting of funds into the client’s account by a large number of other residents from the accounts opened with RF banks with their subsequent debiting”; transactions involving “debiting of funds from the account within a period not exceeding two days from the date of their crediting”; client’s activity “within a framework of which the money is credited to and debited from the account, not creating any tax liability for its owner, or where the tax burden is minimal”, etc.
The bank’s request to close an account is considered illegal. However, such cases are not uncommon. For example, one of our clients received a letter from the bank informing that it was not satisfied with the ownership structure of the company. And the bank offered to “resolve the issue amicably”, i.e. to close the account and transfer the money to another bank. By making such offers the banks simply play safe, since it is easier for them to get rid of a potentially troubled client than to respond to the claims of CB or to take legal action.
Such requests to close an account can be simply ignored – according to the law the bank can no influence its clients here. And should the credit institution begin to block transactions, its actions can be challenged in court. The said court practice exists and it is quite successful. However, you have to clearly understand what the conflict is about before suing the bank. How objective the bank is in its request? Does the client have its own skeleton in the cupboard? As a result, our client refused to challenge the bank’s request and closed the account, since there was a Panamanian offshore among the company owners and it was risky to litigate.
One should remember that, for example, the bank has every right to ask the client for information and confirming documents. If the bank refuses transaction for failing to provide documents, the court is likely to be on its side. The judges will probably find that the bank acted within the limits of its powers under the law and did noting wrong. And the client will simply waste its time.
Yet if the bank is really biased, you should first file a complaint with the CB. It should be understood that all negotiations with the bank and the CB shall be in writing to have documentary evidence for the court. If the client’s documents are fine and its transactions do not go beyond the law, then it can apply to the court, since the CB recommendations are not binding, and banks are not well versed in the tax matters. However, if the client still has some sins, all risks should be carefully weighed up not to cause difficulties for itself.