Operating account hold under section 115-FL
In the past year a number of corporations turned for help to the MBA “MAGNETAR” as they faced the situation when commercial banks had refused to proceed their transactions or had blocked operational accounts.
Such restrictions are generally legal, but they sometimes excessively used by banks.
The legal basis for rejection of carrying out transactions or the operating account block is contained in the Federal law of the Russian Federation dated 07.08.2015 No. 115 " Concerning the Counteraction of the Legitimization (Laundering) of the Proceeds of Crime and the Financing of Terrorism” (further herein 115-FL).
However, it is necessary to distinguish such concepts as refusal of executing a transaction order and freezing (blocking) of client’s funds. The latter is an exceptional measure that can be applied only when the name of a company or an individual appears in the list of organizations involved in extremist activities or terrorism which is available on the website of the Federal Service for Financial Monitoring - http://www.fedsfm.ru/documents/terr-list.
In accordance with Article 859 of the Civil code of the Russian Federation the restriction of the client’s right for disposition of monetary assets deposited on his accounts is strictly prohibited. However, item 11 of Article 7 115-FL allows banks to reject transaction orders (except for crediting of monetary recourses to an account) in case of failure to provide proper documentation or in case of doubtful transactions (legitimization (laundering) of the proceeds of crime and financing of terrorism).
In case a bank rejects transaction order upon aforementioned conditions twice or more times over a year, the bank has the right to terminate the bank account (deposit) agreement with the client. Sometimes a client wants to terminate his legal relations with the bank. Then it's important to acknowledge that the account balance is to be repaid to the client or transferred to another account of him not later than seven days after the day of receiving of his written statement. But it’s a frequent occasion that banks disregard these deadlines or sometimes even refuse to accept the statement for transfer or repayment in cash in case of account closing, even though the civil regulations, item 3 of Article 859 of the Civil Code of the Russian Federation in particular, don't set any limits on the cash withdrawal amount upon termination of a banking agreement.
The specialists of MBA "MAGNETAR" suggest businessmen to establish proper and healthy legal relations with banks from the very beginning to avoid operation account holds that may result in financial losses in future. To help with this, our lawyers provide the following services:
- Consulting upon matters regulated by 115-FL.
- Analysis of contract relations between a client and a commercial bank.
- Analysis and audit of the documents requested by a bank.
- Representation of interests of a client in commercial banks upon the matters of suspension of banking operations.
- Drafting of documents and representation of a client's interests in commercial banks at the close of an operating account.
- Preparation of complaints and petitions in the context of abuse of rights (provided by 115-FL) by commercial banks.
- Legal assistance in composing of service documents in case of violation by commercial banks of their obligations, etc.