A Dundalk based money transfer / Bureau de change business recently made an application to the High Court by way of injunctive proceedings to prevent Bank of Ireland from terminating their business arrangements.

The Dundalk based company claimed Bank of Ireland (BOI) wanted to end their banking arrangements and close their accounts because an alleged link between the company and alleged money laundering.

The company had banked with Bank of Ireland for some nine years and in April this year, BOI, without warning, informed the company that it wanted to end their banking relationship. The company’s application by way of injunction sought an order preventing Bank of Ireland from withdrawing its banking services or closing their accounts the company holds with the Bank. Further, the company also sought declarations that the decision to withdraw services is unlawful, discriminatory and disproportionate and is in breach of the EU Regulations on Payment Services.

Counsel on behalf of BOI told the Court that the bank was entitled to terminate the banking relations based on its suspicions that the company may be involved in money laundering activities. Further, BOI said that explanations given in relation to the suspicious transactions were not satisfactory.

Mr. Justice Allen, relied on the bank’s obligations under the 2010 Money Laundering and Terrorism Financing Act and confirmed that said Act requires financial institutions to report any transactions which are seen as suspicious to the authorities.  The Judge noted that BOI are not making a case that the company has been engaged in money laundering but had reasonable grounds that at that time, it decided to terminate the banking relationship with the company for believing it might have been.  The Judge also took into account the bank’s claim that if an injunction was granted, BOI would be become obliged to undertake a great deal of compliance work in regards to reporting transactions that they are suspicious about.

Accordingly, the High Court dismissed the company’s application for an injunction preventing Bank of Ireland from terminating their business arrangements.

 

Rose Murphy is a Solicitor in the Commercial Department of FitzGerald Solicitors, 6 Lapps Quay, Cork.

TEL:         +353 (0)21 4279800
FAX:        +353 (0)21 4279810

EMAIL:    RoseMurphy@fitzsols.com
WEB:       www.fitzsols.com

Please note the foregoing article does not constitute legal advice and you should contact your solicitor for specific advice tailored to your circumstances.

 

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