Restrictive measures on current accounts that banks have adopted to comply with requirements deriving from the prevention of money laundering regulations.
Financial institutions are subject to prevention of money laundering and terrorist financing regulations. This is a complex regulatory framework that requires, among other things, that banks take certain measures with their customers.
Accordingly, your bank may ask you to provide:
- Documentation and information on your identity and economic activity, and your transactions.
- A regular update of this information.
It may also freeze or cancel your account:
- If you do not heed its requests or do not meet its requests sufficiently.
- With no need for prior demand or warning, in all cases in which it deems that it is obliged to do so.
In this respect, the regulations also impose certain duties of confidentiality on banks, in some cases regarding the persons concerned and in others regarding the Banco de España’s Institutions’ Conduct Department (ICD) in its task of settling customer complaints, which means that banks are not always authorised to give sufficient explanation of events.
Note that the ICD does not have specific competence in this respect, but this does not mean that we cannot analyse certain aspects of banks’ procedures in view of best banking practice (Spanish version only) and, where appropriate, assess whether banks have acted diligently in customers’ best interests.
What are banks required to do?
- As a general rule, your bank must inform you that an account has been frozen or cancelled immediately after that decision is taken and must provide at least a general explanation for the decision or a reference to the regulations supporting the decision. However there are exceptions, in cases where it subsequently becomes clear that there are special confidentiality reasons for not doing so.
- As regards how this information is conveyed, in addition to complying with the relevant contractual terms and conditions, banks must use any available means of communication provided by customers so as to ensure that the notification is effectively received.
- In the case of accounts that are frozen or cancelled as a result of failure to satisfy demands for routine updating of the available information, the requests for updated information must have been issued sufficiently in advance.