Brussels, 10/03/2016 (Agence Europe) - As part of their fight against money laundering and the financing of terrorism, the member States may authorise banks to apply reinforced vigilance measures against clients subject to the same obligation of vigilance, such as payment establishments, but only once they have assessed the existence and level of risk.
This is the judgment returned by the Court of Justice of the EU on Thursday 10 March (case C-235/14). The judgment is in line with the conclusions of Advocate General Eleanor Sharpston (see EUROPE 11382). This case concerns the Spanish financial establishment Safe Interenvios, whose accounts with several Spanish banks were cancelled in application of the anti-money laundering and financing of terrorism measures.
The banks took these measures because Safe declined to notify the banks of the identity of its clients and data regarding the origin and destination of the funds transferred. Safe challenged these measures, arguing, amongst other things, that it could not be placed under reinforced vigilance measures as it was already subject to the same obligation of vigilance.
The Court rejected this argument. It took the view that the level of vigilance measures, three in total (simplified, normal and reinforced) and graduated on the basis of the level of risk (as per Directive 2010/78/EU), may be increased as soon as there is a suspicion of money laundering or the financing of terrorism. This means that the fact that the client is subject to the directive should not prevent the member states from authorising the application of “normal” vigilance measures if there is a suspicion, and “reinforced” measures if there is a higher risk.
However, the Court took the view that the rules in force in Spain go too far. These generally assume that the transfer of funds always present a high risk.
The fact that it is not possible to refute this presumption does not correspond to the requirement for proportionality, the Court argued, which took the view that the member states need to guarantee that the reinforced vigilance measures are based on the assessment of the existence and level of risk of money laundering and financing of terrorism related to a client, business relationship, account, product or transaction. (Original version in French by Jan Kordys)