EU Court Rules OFAC Listing Alone Is Not Enough To Refuse A Bank Account

The Court of Justice of the European Union has ruled that a person’s inclusion on a United States sanctions list is not, by itself, sufficient grounds for an EU bank to refuse to open a basic payment account.

The judgment, delivered on 11 June 2026 in Case C-81/24, Jenec, is an important clarification for banks, payment institutions and compliance teams operating in the European Union. It confirms that non-EU sanctions listings, including those maintained by the US Office of Foreign Assets Control, may be relevant risk indicators, but they cannot automatically replace the institution’s own legal and risk-based assessment under EU law.

The case arose after a Slovenian bank refused to open a basic payment account for an individual because he appeared on an OFAC sanctions list. The individual was not subject to EU, UN or Slovenian sanctions. The bank argued that the refusal was connected to its anti-money laundering and counter-terrorist financing obligations.

The Court did not accept that an OFAC listing alone could justify such a refusal. Instead, it held that the institution must carry out a specific assessment of the individual situation and determine whether the relationship presents a money laundering or terrorist financing risk that cannot be effectively managed through proportionate measures.

A Sanctions Listing Is A Risk Factor, Not A Complete Risk Assessment

The ruling does not mean that EU banks must ignore OFAC sanctions. Nor does it mean that institutions must open accounts for every person listed by a third country authority. Rather, the Court drew a clear distinction between using a sanctions listing as part of a risk assessment and treating that listing as an automatic legal ground for refusal.

This distinction is important. In practice, many banks and financial institutions treat OFAC exposure as a major risk issue because of the possible consequences for correspondent banking, US dollar clearing, international counterparties and reputational exposure. For institutions with links to the US financial system, OFAC risk can be commercially and operationally serious.

However, the Court’s judgment confirms that, within the EU legal framework, a third-country sanctions listing cannot be treated as a substitute for an individual assessment. The bank must examine the facts, the nature of the proposed relationship, the applicable EU and national legal requirements, and whether the risk can be managed through enhanced due diligence or other controls.

The Right To A Basic Payment Account Remains Protected

The case also highlights the importance of the EU rules on access to a payment account with basic features. EU law gives consumers legally resident in the Union the right to open and use a basic payment account, subject to limited exceptions.

That right may be restricted where necessary to comply with anti-money laundering and counter-terrorist financing requirements. However, the restriction must be justified. A bank cannot simply point to a third-country designation and stop there.

The Court’s position is therefore not anti-compliance. It is a demand for proper compliance. The institution must show that it has considered the individual customer, the actual risk presented, and whether that risk can be mitigated in a proportionate way.

What Banks And Compliance Teams Should Take From The Judgment

For compliance teams, the judgment is a warning against blanket de-risking decisions based solely on external screening hits.

Where a prospective customer appears on a non-EU sanctions list, the institution should not treat the result as the end of the process. Instead, it should document the assessment, identify the source and legal status of the listing, check whether the person is also subject to EU, UN or national sanctions, and consider the specific ML/TF risk connected to the proposed account or relationship.

The assessment should also consider whether enhanced due diligence, transaction restrictions, account limitations, senior management approval, ongoing monitoring or other risk controls could manage the risk. Only if the institution concludes, on the basis of a documented and case-specific analysis, that the risk cannot be effectively managed, may refusal be justified.

This is especially relevant for institutions that operate in a complex sanctions environment, where EU, UK, US and UN sanctions regimes do not always overlap. A person may be listed by OFAC but not by the EU. In such cases, the institution must carefully separate legal prohibition, regulatory risk, operational risk and commercial risk.

OFAC Risk Still Matters

The ruling should not be misunderstood as reducing the importance of OFAC compliance. For many European banks, OFAC exposure remains a serious practical concern, particularly where the institution has US operations, US shareholders, US correspondent banking relationships, US dollar transactions or exposure to US persons.

A bank may still conclude that onboarding an OFAC-listed person creates unacceptable risk. However, after this ruling, the conclusion must be reached through a proper risk-based process rather than an automatic refusal.

The practical message is that OFAC listing is highly relevant, but not legally decisive by itself under EU law.

Wider Implications For De-Risking

The judgment fits into a wider European concern about excessive or automatic de-risking.

Regulators have repeatedly emphasised that financial institutions should not avoid entire categories of customers without considering the specific risk profile of the individual relationship.

This case reinforces that principle in the sanctions context. A screening alert is not the same thing as a final risk decision. Compliance systems can identify risk, but the institution must still apply judgment, proportionality and legal analysis.

For customers, the ruling strengthens the protection against automatic exclusion from basic banking services. For banks, it raises the standard of documentation expected when refusing access to an account on financial crime grounds.

Why The Ruling Matters

The CJEU’s judgment in Case C-81/24 gives banks and compliance teams an important reminder: sanctions screening results are only the starting point of the assessment, not the final decision.

A US sanctions listing may still carry serious practical risk, especially for institutions exposed to US dollar clearing, correspondent banking or US-linked counterparties. But within the EU framework, that risk must be assessed through a documented, case-specific process.

For financial institutions, the message is clear. OFAC exposure cannot simply be ignored, but it also cannot be used as a shortcut. Banks must be able to show why a customer presents a risk that cannot be properly managed, rather than relying on the existence of a third-country sanctions listing alone.

By fLEXI tEAM