The General Court of the European Union has upheld the November 2019 decision of the European Central Bank, acting as the single supervisor within the euro area banking union, to withdraw the authorisation of Austrian credit institution Anglo Austrian AAB (AAB Bank) on the recommendation of the Austrian banking supervisor for serious deficiencies in the fight against money laundering and terrorist financing, in a judgment handed down on Wednesday 22 June (Case T-797/19) (see EUROPE 12421/14).
This is the first time the European court is ruling on the withdrawal of a bank’s authorisation due to serious infringements of national measures adopted under the anti-money laundering and countering terrorist financing directive (2005/60).
According to the General Court, the ECB did not commit a manifest error of assessment in finding that AAB Bank had for several years violated Austrian law transposing the EU directive. The Austrian bank did not have an appropriate risk management procedure to prevent money laundering and had been found responsible for serious, repeated or systematic violations of Austrian law.
The fact that the breaches were old or have since been corrected has no bearing on the incurrence of such liability. Such an approach would undermine the objective of safeguarding the European banking system, as it would allow banks that have committed serious infringements to continue their activities as long as the competent authorities do not demonstrate that they have committed new infringements.
The General Court also notes that the rights of the defence were respected. AAB Bank was properly heard prior to the adoption of the contested decision, but the ECB was not obliged to share the draft decision initiated by the Austrian supervisory authority with the bank.
Finally, in the General Court’s view, the ECB impartially assessed and determined all the factors relevant to the withdrawal of the authorisation on the basis of its own assessment of AAB Bank’s compliance with Austrian law.
See the judgment (in French): https://aeur.eu/f/29g (Original version in French by Mathieu Bion)