The Court of Justice of the European Union ruled on June 11 in Case C-81/24 (Jenec) that banks cannot refuse to open payment accounts with basic features solely because an applicant appears on a third-country sanctions list, such as the US OFAC list. The court emphasized that refusal must be based on an individual, documented assessment demonstrating that AML/CFT or sanctions-related risks cannot be managed by proportionate measures.

This ruling underscores the right of legally resident EU consumers to access basic payment accounts, a key aspect of financial inclusion, while balancing AML and counter-terrorist financing obligations. The court rejected automatic denial just because of third-country listings, requiring banks to evaluate factors like the intended account use, transaction expectations, customer explanations, and the bank’s capacity to control risks.

In Cyprus, where the Payment Accounts Directive is transposed into national law, and recent regulatory reforms have strengthened AML and sanctions enforcement, this judgment highlights the need for banks and payment institutions to base refusals on individualized risk assessments. Simply citing a third-country sanctions listing without a proportionate evaluation may not suffice, ensuring access rights are protected alongside regulatory compliance.