Ruling [DEU] ¦ German Court Upholds Bank Account Termination Over AML Risk Concerns

When AML Risk Triggers Account Termination – A German Court’s View

The Higher Regional Court in Düsseldorf confirmed that a cooperative bank (Genossenschaftsbank) was entitled to terminate two giro account agreements with a corporate customer. The case arose after the bank issued an ordinary termination of the accounts in July 2024, effective September 2024. The customer sought interim relief, arguing that the termination was unjustified and threatened its economic existence.

Both the Regional Court and, on appeal, the Higher Regional Court rejected these arguments and upheld the termination.

Legal Framework for Account Termination

Under German law, payment service providers may terminate framework agreements concluded for an indefinite period, provided that a contractual right of termination exists and the statutory notice period is observed. In this case, the bank relied on its general terms and conditions, which allowed ordinary termination with two months’ notice.

The court emphasized that, even though an ordinary termination does not require a specific reason, the presence of a factual and objective justification is relevant when assessing whether the termination might be abusive or contrary to good faith. For banks, such justification can arise directly from obligations under anti-money laundering law.

Bastian Schwind-Wagner _Follow

"The decision confirms that anti-money laundering obligations can outweigh a customer’s interest in maintaining a banking relationship. Courts are prepared to accept enhanced compliance risk and supervisory pressure as valid grounds for ordinary account termination.

At the same time, the ruling shows that claims of urgency require consistent and prompt action. Delayed applications for interim relief and the availability of alternative payment accounts significantly weaken arguments of existential harm."

AML Obligations as a Legitimate Reason

Central to the court’s reasoning were the enhanced due diligence obligations imposed by the German Anti-Money Laundering Act. Credit institutions must apply stricter controls where there is an increased risk of money laundering or terrorist financing, including in cases involving transactions connected to certain third countries.

The bank demonstrated that, following a supervisory audit by the financial regulator in June 2024, it reassessed the customer relationship and classified it in the highest risk category. The customer’s regular cross-border payment activity, including transactions involving countries such as China, Turkey, and the United Arab Emirates, triggered enhanced obligations that the bank concluded it could not adequately fulfill.

According to the court, it is sufficient that a reasonable and impartial observer would consider the termination a proportionate reaction to increased compliance risks. A bank is not required to maintain a customer relationship if doing so would expose it to heightened regulatory risk or disproportionate compliance burdens, even if the customer is willing to compensate for the additional effort.

No Evidence of Improper Motives

The applicant argued that the termination may have been influenced by external regulatory communications or by considerations related to foreign law. The court rejected this claim, finding that the bank credibly demonstrated that the decision was based solely on its internal risk assessment and AML compliance obligations.

As a result, the termination was not considered to violate European blocking regulations or to be otherwise unlawful.

No Urgent Need for Interim Relief

The court also found that the applicant failed to establish the urgent necessity required for an interim injunction that would effectively force the bank to continue the account relationship. Claims of existential threat were deemed too general and insufficiently substantiated.

Importantly, the applicant already held a payment account within the SEPA area at another financial institution and could continue its payment operations there. The court also noted that the alternative provider was in the process of issuing German IBANs, further weakening the claim of irreparable harm.

Delay Undermines Claims of Urgency

A decisive factor was the applicant’s delay in seeking interim relief. Although the termination notice was received in early July 2024, the application for an injunction was not filed until November 2024, more than four months later and well after the termination had taken effect.

Under German procedural law, such delay can negate any presumption of urgency. The court concluded that the applicant’s own conduct contradicted its claim that immediate judicial intervention was necessary, especially given that similar account terminations by other banks had already occurred earlier in the year.

Implications for Financial Crime Compliance

This decision reinforces the broad discretion granted to banks when managing AML and counter-terrorist financing risks. Courts continue to recognize that regulatory expectations and supervisory pressure can justify terminating customer relationships, even in the absence of proven wrongdoing.

For financial institutions, the ruling underlines the importance of documented risk assessments and credible evidence when ending higher-risk relationships. For customers, it highlights that access to banking services is not guaranteed where AML risks exceed what an institution is prepared or able to manage.

Dive deeper

• openJur 2025, 21023 ¦ OLG Düsseldorf, Beschluss vom 11.12.2024 - 14 W 23/24 ¦ Link