Ruling [DEU] ¦ German Court Upholds Bank Account Closure Linked to Iran-Related AML Risk

A compliance case for exiting high-risk customer relationships

A German appellate court has rejected an application seeking an interim order that would have required a public-sector bank to continue providing giro accounts to a corporate customer linked to Iran.

The decision highlights the broad discretion available to banks when managing heightened anti-money laundering and sanctions-related risk. It also confirms that, in urgent proceedings, a company seeking to prevent an account closure must show a concrete and immediate threat to its existence or operations. General difficulties in finding a replacement bank account will not be enough.

The dispute concerned continued access to payment accounts

The applicant sought an interim injunction requiring the bank to maintain its giro accounts for payment purposes until a final decision in proceedings on the merits.

The court treated this request as a so-called performance injunction (Leistungsverfügung). Unlike an order preserving the existing position, such an injunction would oblige the bank to continue actively performing the banking relationship. Because it can effectively anticipate the outcome of the main case, this form of relief is available only in exceptional circumstances.

The applicant’s immediate appeal was admissible but unsuccessful. The court found that it had not sufficiently demonstrated the necessary urgency.

Bastian Schwind-Wagner _Follow

"The court confirmed that a bank may terminate a corporate banking relationship where an Iran-related ownership link creates enhanced anti-money laundering obligations and increased compliance risk. It found that EU sanctions rules may permit certain dealings but do not oblige a bank to provide or continue banking services.

The company failed to prove the immediate and severe hardship needed for emergency court protection. Its access to another account until June 2026 and the availability of SEPA banking services elsewhere in the EU weighed against an interim order."

High threshold for emergency relief

Under German civil procedure, an interim order requiring active performance normally requires an urgent need for protection. The applicant must show that waiting for ordinary proceedings would cause unacceptable harm and that later damages would not provide an adequate remedy.

According to the court, the threshold may be lower where the underlying legal claim is plainly established or where refusing interim relief would amount to a final denial of justice. Conversely, the threshold rises where the merits are not clear and financial compensation may remain available later.

The company did not establish an existential threat or a specific operational emergency. It argued that it had unsuccessfully attempted to open accounts with banks headquartered in Germany. However, the court noted that the Single Euro Payments Area, or SEPA, allows EU-wide cashless payments through banks licensed elsewhere in the European Union. The applicant had not shown that it had unsuccessfully sought an account with a foreign EU bank.

The court also considered it relevant that a separate account was guaranteed to remain open until the end of June 2026. In its view, the company could use that account for its payment operations while seeking alternatives. The bank’s auxiliary ordinary termination, issued on 26 November 2025, would end the business relationship by 26 January 2026 at the latest.

Public-sector banks may still terminate corporate relationships

The judgment addresses the position of public-sector credit institutions under German law. The bank’s general terms permitted termination of the overall relationship or individual business lines where there is an objectively justified reason, subject to the customer’s legitimate interests and a minimum notice period of two months for payment-services framework contracts.

The court stated that a public-sector bank is constrained by the constitutional principle of equal treatment and therefore cannot terminate customer access arbitrarily. A termination without an objectively justified reason could be invalid.

However, the court also made clear that public-sector banks are not generally required to contract with corporate customers. The statutory obligation applicable to savings banks in North Rhine-Westphalia principally protects natural persons, not companies. The court rejected the proposition that the statutory public-service function of a savings bank creates a broader obligation to restore or maintain a terminated corporate relationship.

Iran connection can trigger enhanced due diligence

A central feature of the case was the applicant’s connection to Iran. The court referred to the company as a subsidiary of an Iranian company and found that this relationship could be sufficient to create an Iran nexus for anti-money laundering purposes.

Under section 15(3) no. 2 of Germany’s Anti-Money Laundering Act, enhanced due diligence (EDD) applies where a business relationship or transaction involves a high-risk third country or a person established in such a country. Iran has been identified as a high-risk jurisdiction under the relevant European Commission framework, and the Financial Action Task Force (FATF) maintained its high-risk classification in October 2025.

The court further relied on a March 2025 supervisory notice from BaFin, Germany’s financial regulator. BaFin had instructed obliged entities to apply at least all enhanced due-diligence measures listed in section 15(5) of the Anti-Money Laundering Act to relevant Iran-related transactions and relationships. Importantly, BaFin stated that an Iran connection must be interpreted broadly. It may arise not only from a customer’s residence or incorporation in Iran, or from direct transactions involving Iran, but also from other indicators.

The court concluded that a bank could reasonably be concerned that the applicant’s status as a subsidiary of an Iranian company triggers enhanced due-diligence obligations. It considered it obvious that, for purposes of money-laundering prevention, terrorist-financing risk and proliferation concerns, it should not matter whether a customer is directly located in Iran or is directly or indirectly controlled by an Iran-based person.

Avoiding enhanced AML exposure may be a legitimate reason for termination

The ruling is particularly significant because the court accepted that the burden and risk associated with enhanced due diligence may itself constitute an objectively justified reason for a bank to terminate a giro account relationship.

The court followed earlier Düsseldorf decisions holding that a bank is not required to maintain a relationship merely because it could, in principle, comply with the enhanced due-diligence obligations. Nor does the customer’s willingness to compensate the bank for the additional effort remove the bank’s ability to end the relationship.

From the court’s perspective, a reasonable observer could regard termination as an appropriate response where a relationship creates greater operational work and higher risk than an ordinary customer relationship. The bank may decide whether it is willing to accept that burden.

This approach reflects a familiar feature of financial crime compliance: risk-based controls do not always result in additional monitoring alone. In some circumstances, institutions may choose to exit relationships that bring heightened exposure, complex review requirements or increased regulatory scrutiny.

EU sanctions rules do not create a right to banking services

The applicant had argued that EU Iran sanctions rules should support the continuation of the banking relationship. The court disagreed.

It held that Article 30a(1b) of Regulation (EU) No. 267/2012 does not require an EU bank to provide banking services to Iranian persons, organisations or entities. The provision allows transactions that are not otherwise prohibited, while imposing reporting obligations on those who voluntarily enter into such dealings. It does not compel a bank to continue a relationship involving higher compliance demands.

The judgment therefore distinguishes between permission to conduct a transaction under sanctions law and a bank’s obligation to provide services. The fact that a transaction is not prohibited does not mean that a bank must accept the associated financial crime and regulatory risk.

Implications for banks and corporate customers

For banks, the decision supports a cautious approach to relationships involving Iran-related ownership, control or transaction flows. It underlines the importance of documenting the specific regulatory basis for risk concerns, including the high-risk-third-country framework, BaFin communications and the practical consequences of enhanced due diligence.

For corporate customers, the decision shows that an interim challenge to account termination requires more than an assertion that domestic replacement accounts are difficult to obtain. Companies need persuasive evidence of an immediate and severe operational threat, including why alternative EU banking arrangements, temporary accounts or other payment channels are not realistically available.

The ruling does not establish that every Iran-linked customer must be exited. Rather, it confirms that an Iran connection may justify enhanced due diligence and that a bank may, within the limits of applicable contract and public-law obligations, decide not to continue a relationship carrying increased compliance effort and risk.

Dive deeper

• Justiz NRW ¦ Oberlandesgericht Düsseldorf, Case 37 W 2/26, Resolution dated January 17, 2026, ECLI:DE:OLGD:2026:0117.37W2.26.00 ¦ Link
• Bafin ¦ Prävention von Geldwäsche und Terrorismusfinanzierung: Risiken im Zusammenhang mit Umgehungsgeschäften ¦ Link
• Bafin ¦ Iran-Geschäfte: BaFin warnt erneut vor hohen Risiken für Geldwäsche und Terrorismusfinanzierung im Zusammenhang mit Umgehungsgeschäften ¦ Link
• EUR-Lex ¦ Regulation (EU) No 267/2012 concerning restrictive measures against Iran ¦ Link