Balancing Financial Inclusion And AML Compliance: The Right To A Basic Payment Account

In the context of the increasingly complex compliance environment within which financial entities operate today, banks are often faced with a conflict between the need to respect fundamental principles of access and inclusion and the requirement to safeguard the integrity of the financial system. The anti-money laundering (AML) and counter-terrorist financing (CFT) legal framework imposes rules on banks to continuously assess risks under the threat of critical regulatory and reputational consequences. Simultaneously, consumer protection rules oblige banks to ensure broad, non-discriminatory access to basic financial services.

The parallel application of these two fundamental principles poses practical difficulties for banks in onboarding customers. It is against this regulatory tension that the Advocate General Richard de la Tour (the AG) issued an opinion, delivered on 4 September 2025, (the Opinion) in the case which has been brought before the Court of Justice of the European Union (CJEU) between LH v. OTP banka d.d., (Case C-81/24). This article summarises the Opinion which does not bind the CJEU and the final judgment in this case is yet to be delivered.

Facts and legal background

The dispute arose from a refusal of OTP banka d.d. (a credit institution authorised in Slovenia) (the “Bank“) to open payment account with basic features for an individual consumer, who is the plaintiff in this case.

In requesting the Bank's services, the plaintiff applied for a payment account with basic features under the national laws transposing Directive 2014/92/EU of the European Parliament and of the Council (the “Payment Accounts Directive”). Based on fundamental freedoms guaranteed by Treaties of the EU, the Directive establishes the obligation for banks (or a sufficient number of banks in a Member State) to offer consumers who are legally resident in the EU such basic accounts with no discrimination and with full respect to the consumer's right to financial inclusion.

The Payment Accounts Directive however recognises the concurrent need to ensure that the EU financial system is not used for illegal purposes such as fraud, money laundering or terrorism financing. For this reason, it provides that the opening of a payment account with basic features is obligatory unless this would result in the infringement of requirements on the AML and CFT laid down in Directive (EU) 2015/849 of the European Parliament and of the Council (the “AMLD“). A bank is therefore only allowed to refuse the opening of such accounts under these narrowly defined circumstances.

In turn, the AMLD prescribes customer due diligence requirements and establishes the obligation for entities to reject business relationships or transactions where entities are unable to comply with the customer due diligence requirements. A decision to reject business relationships or transactions is dependent on the relevant entity's policies, controls and procedures and on the extent of the application thereof by the relevant entity on a risk-sensitive basis. A degree of discretion is therefore allowed in the AMLD in this respect.

It transpired that the Bank's decision to reject the plaintiff's application for the opening of a payment account with basic features was based on the fact that the same plaintiff was included in a list of the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC“). The plaintiff has not been convicted of any offence for which he is on such list and was not subject to restrictive measures from the United Nations, the EU or any Member State.

In analysing the interaction between the Payment Accounts Directive and the AMLD as two key EU Directives, the Slovenian court decided to stay proceedings and refer the matter to the CJEU for a preliminary ruling.

Question considered by the AG

The question referred to the CJEU and considered by the AG in his Opinion asks whether Article 16(4) of the Payment Accounts Directive (requiring refusal of payment accounts with basic features on the basis of infringement of AML/CFT rules) may be deemed to allow for a rejection of a consumer's application on the basis that such consumer is included in a list of the OFAC.

Essentially, the question is therefore whether the acceptance of a request for the opening of a payment account with basic features made by a consumer who is included in an OFAC list would constitute an infringement of the AML/CFT rules laid down in the AMLD.

The AG's considerations

Whilst acknowledging the mandatory nature of the requirement to refuse a basic payment account under the Payment Accounts Directive where this would result in a breach of AML/CFT rules, the AG noted that the recitals of the same Directive stipulate that the AMLD rules should not be invoked as a justification for the exclusion of consumers considered to be commercially undesirable. The AG in fact noted that the efforts to fight against the financing of terrorism and money laundering should not result in a total ban from participating in the banking system.

In assessing what breach of AML/CFT rules could warrant a refusal to open a payment account with basic features, the AG referred to the afore-mentioned customer due diligence requirements under the AMLD. These customer due diligence requirements include:

1. the identification of the customer and the verification of the customer's identity (Article 13(1)(a) of the AMLD),
2. the identification of the beneficial owner and verification of the identity of such beneficial owner (Article 13(1)(b) of the AMLD); and
3. the assessment of and obtaining information on the purpose and intended nature of the business relationship (Article 13(1)(c) of the AMLD).

Under the AMLD, if a bank cannot comply with these due diligence requirements, it must not pursue the business relationship or transaction. The AG noted that none of these elements seem to be lacking in the case at hand in that the customer is identified, the beneficial owner is ascertained and the purpose of the business relationship is undoubtedly the opening of a basic payment account.

In his Opinion, the AG referred to this (the prohibition from entering into a business relationship only under specific circumstances) as the EU legislature's balance of interests between the right to access basic banking services and the combating of the financing of terrorism and money laundering.

The AG recognised the relevance of the inclusion on an OFAC list in assessing the level of due diligence to be applied to a business relationship. The Opinion notes that the AMLD does not envisage the possibility of inclusion on a sanctions list when establishing customer risk factors, however, Guidelines published by the European Banking Authority on 1 March 2021 under Articles 17 and 18(4) of the AMLD (which have since been amended) indicate that banks are to take into account risks linked to the customer's reputation in determining customer risk factors. In this respect, the AG noted that inclusion on an OFAC list could justify enhanced due diligence measures.

Opinion and closing remarks

In concluding his Opinion, the AG proposes that Article 16(4) of the AMLD should not be interpreted as allowing a bank to refuse to open a payment account with basic features solely on the basis that the applicant's name appears on an OFAC list. On the contrary, the AG argues that such a refusal would necessitate a situation where the bank is not able to comply with AML/CFT requirements on customer due diligence. In the AG's view, the inclusion on sanctions list on its own does not meet this threshold.

The Opinion stresses that the right to a basic payment account enshrined in the Payment Accounts Directive is not to be lightly overridden by AML/CFT considerations. Refusals to offer this product must be based on objective factors and must not be applied automatically, according to the AG.

While the AG's Opinion offers a clear interpretative framework in this respect, the ultimate decision on this matter lies with the CJEU, which may choose to adopt, modify or depart from the AG's reasoning in its final ruling.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.