Right to basic banking services for a company no longer a dead letter: act of 8 November 2020 entered into force
Belgian consumers have had the right to a “basic banking service” since 2003: a minimum service from a financial institution that must grant them access to a payment account and the most essential transactions associated with it. A right that has also existed for a company since 8 November 2020, but remained unenforceable for a long time due to the lack of the necessary implementing decrees.
Background
For many companies in certain sectors (such as the hospitality or diamond sector), it has proven difficult or even impossible in recent years to open or maintain an account with a Belgian bank. This trend is fueled by the tightened (European) anti-money laundering legislation and the resulting duty of vigilance on the part of Belgian financial institutions.
After all, Belgian banks are currently under strict supervision by the National Bank of Belgium, which instructed financial institutions in its circular of 8 June 2021 to question further, refuse or terminate the customer relationship with clients who engage in “suspicious” transactions.
Our legislator seemed aware of the problem and already introduced a basic banking service for a company into the Code of Economic Law by the act of 8 November 2020.[1] An act that remained a dead letter for a long time due to the lack of the necessary implementing decrees.
A conviction by the Dutch-speaking court of first instance of Brussels, which treated the Belgian State to a conviction based on the consideration that the absence of an operational legislative text constituted a flagrant disregard for the freedom of enterprise, has probably moved things along. On 16 January 2023, the long-awaited Royal Decree was published in the Belgian Official Gazette, and on 26 January 2023, the right to basic banking services for a company became executable and therefore enforceable.
What are basic banking services for a company?
The basic banking services to which a Belgian company is entitled only correspond to a current account (not a savings account!) and give the company the right to a debit card with which the following transactions can be performed;
- deposit money
- withdraw money
- make transfers
- carry out standing orders
- execute direct debits
- pay with a payment card or similar means
It should be emphasised that there is no such thing as a right to credit, a payment transaction in the context of the basic banking services will therefore never be executed if it would result in a debit balance.
For whom?
Any company that is established in Belgium and is registered with the Crossroads Bank for Enterprises or applies for registration, and that has been refused by at least three credit institutions, is entitled to the aforementioned basic banking services.
The fact that the right to basic banking services does not extend to foreign companies (unlike the right to basic banking services for consumers) can be traced back to the anti-money laundering legislation.
If the right to a basic banking service were extended to foreign institutions, compliance with the obligations of credit institutions provided for in the anti-money laundering act would become very difficult, if not impossible. The information that must be obtained from those institutions is not easily accessible.
Procedure
After a prior refusal by three credit institutions, the company can submit an application to the “basic banking service chamber” via an application form made available for this purpose by each credit institution.
Following a positive opinion from the Financial Intelligence Processing Unit, the basic banking service chamber has two months to designate a credit institution established in Belgium that will have to offer you the basic banking service. In 2023, six banks are eligible as providers of the basic banking service, namely:
- BNP Parisbas Fortis
- KBC Groep
- Belfius Bank
- ING België
- Argenta
- Axa Bank Belgium
In the context of additional risk-mitigating measures, the basic banking service chamber can ask the company to provide certain documents or information for its decision to designate a basic banking service provider. The basic banking service provider can then terminate or refuse the basic banking service if offering it would constitute a violation of the act of 18 September 2017 on the prevention of money laundering and terrorist financing.
Conclusion
Since 26 January 2023, there is an enforceable right to basic banking services on the part of a Belgian company, which must at least enable it to participate in economic transactions.
In the current climate, in which the strict anti-money laundering legislation, among other things, makes it very difficult for certain companies to obtain a Belgian bank account and associated services, such a basic banking service for a company can hardly be called an unnecessary luxury.
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[1] book VII, title 3, chapter 8 CEL