Termination of Dutch bank account

Banks’ Duty under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft)

Under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), banks have a duty of care to detect and report suspicious transactions and unusual customer relationships. In certain cases, this may lead to the termination of the banking relationship, resulting in the closure of the bank account and cancellation of the mortgage.

When can a bank terminate your Dutch account?

A bank may terminate a relationship if there are risks related to money laundering, terrorist financing, or other irregularities that threaten the integrity of the financial system. Examples include:

• Insufficient or questionable information about the origin of funds;
• Strange or inexplicable transactions or patterns (e.g., large cash withdrawals or deposits, international transfers, personal transactions on business accounts, or vice versa);
• Failure to adequately cooperate with the bank’s identification and verification procedures;
• Involvement in or suspicion of criminal activity, such as revealed through media reports, transaction patterns, or requests for account data by the police or the Fiscal Intelligence and Investigation Service (FIOD).

The bank must act with due care. Termination must not be arbitrary and must be based on concrete facts and a reasonable risk assessment. Often, a notice period applies. A colleague, Nick van den Hoek, discusses in a blog what you should do if you receive a letter of inquiry from your bank.

Freedom of Contract vs. Duty of Care

Article 35 of the bank’s general terms and conditions (ABV) stipulates that banks can terminate the relationship with account holders. The account holder does not need to have breached any obligations for this to occur. Partial termination is also possible (e.g., closure of savings and payment services, while leaving the mortgage intact).

Article 2 of the ABV outlines the bank’s duty of care: the bank must act with diligence and take the customer’s interests into account as much as possible. Article 4 states that customers must cooperate with anti-money laundering checks.

Although the bank has the authority to terminate an account, the Dutch Supreme Court ruled in 2014 that the exercise of this authority must not violate standards of reasonableness and fairness. For example, termination may be unacceptable if the customer cannot open an account elsewhere.

Internal Referral Register (IVR)

Banks record the data of individuals or entities involved in incidents in their Internal Referral Register (IVR). For instance, if a customer fails to provide a satisfactory explanation for the origin of funds. Only bank employees can access the IVR. It contains only minimal identifying information such as name, date of birth, or company registration number and postcode.

External Referral Register (EVR)

In more serious cases—such as mortgage fraud, money laundering, forgery, or cash compensation—the bank may also register the identifying data in the External Referral Register (EVR). Other financial institutions can consult the EVR, and this may prevent the individual from obtaining services elsewhere. EVR registration requires sufficient evidence; suspicions alone are not enough.

Mortgage Fraud Prevention Foundation (SFH)

The Mortgage Fraud Prevention Foundation (Stichting Fraudebestrijding Hypotheken – SFH) is a collaboration between all Dutch mortgage lenders. Through the SFH, mortgage providers work together in fraud investigations and share personal data under the Incident Warning System Protocol for Financial Institutions. More on mortgage fraud can be found in a blog by Vincent Leenders.

Bank Questions During Criminal Investigations

It becomes particularly complicated when the bank poses questions during a criminal investigation by the Public Prosecutor. Criminal suspects have the right to remain silent. However, they are not legally required to answer questions from the bank either—although refusal may lead to account termination. Colleague Ilse Engwirda explains the legal dilemma suspects face in such cases in her blog.

Legal Options

Account termination can have far-reaching consequences. Without a bank account, businesses cannot pay salaries or receive payments. Loan repayments may also be demanded, potentially leading to bankruptcy.

You can respond by:

• Filing an objection with the bank, arguing that the bank failed to consider all relevant circumstances or did not fulfill its duty of care;
• Filing a complaint with the Financial Services Complaints Institute (Kifid). Statistically, success rates are low (under 10%), but the process is accessible and affordable. Note: the bank often proceeds with termination despite the complaint;
• Initiating civil proceedings if the termination is unlawful or disproportionate. Courts have reversed bank decisions in cases where termination was too easily justified. However, civil proceedings require legal representation and court fees, and you may be liable for the bank’s legal costs if you lose.

Consider Alternatives

Courts are more likely to reverse termination decisions if the consequences are severe—such as when no alternative bank account can be opened elsewhere. A “comparable banking relationship” means that the customer can access the same products and services at a new bank.

Basic Bank Account

Individuals whose accounts are closed may apply for a Dutch basic bank account if other banks reject their applications. This is a simple account allowing for essential banking services. There are ongoing plans to introduce a basic business account, but until then, entrepreneurs whose business accounts are closed may find themselves unable to continue operations.

Exclusion Based on Risky Sectors

Certain sectors are considered high-risk for money laundering. The Wwft guidance for accountants and tax advisors includes phone shops, coffee shops, hospitality businesses, currency exchange offices, jewelers, and souvenir shops. The Dutch Central Bank (DNB) also lists pharmaceuticals, oil and gas, real estate, and consulting services.

This means banks must conduct additional due diligence for clients in these sectors. However, courts have ruled against banks that fail to justify why a specific client poses an elevated risk. Banks must provide concrete reasons for termination.

Legal Assistance

Legal representation is mandatory in civil proceedings. However, even before a case reaches court—during the client due diligence phase—it may be wise to consult a lawyer to protect your rights and interests.