An important decision has been recently ruled by the Supreme Court (No 5-КГ20-54-К2, 2-4461/2019 dated 30.06.2020). In this matter, the bank has identified a reputational risk in servicing the client's account, since funds have been transferred to this account as a result of a suspicious transaction. In this context, the bank refused to the client in all operations on his account, except for the return of funds under the named transaction, having unilaterally increased its commission from 1% to 10%.
The client returned the money, but did not agree with the amount of the commission charged. The court of first instance found that the bank's actions were in compliance with the law and the bank account agreement. This approach was supported by appeal and cassation.
The Supreme Court did not agree with them and sent the case for a new trial.
It indicated that the bank is entitled to classify clients' transactions as suspicious in order to fight against money laundering. However, the bank cannot charge an increased commission for settlement and cash transactions. The control carried out for AML purposes is a public function of the bank. It cannot implement this function in a private relationship as a way to derive benefit at the expense of the client.
In addition, the courts did not take into account the claimant arguments that the concept of "reputational risk" was not disclosed in the agreement, which enables the bank to freely interpret the concept.
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NAZALI TAX & LEGAL |