Published On: Fri, Sep 2nd, 2022

Law office loses fight for Dutch bank account

AMSTERDAM – ABN AMRO is entitled to terminate the Dutch bank account of VapEps, a law office established in Curacao with offices in Curacao, Aruba, Bonaire, Sint Maarten and the Netherlands. VanEps wanted to keep the account citing higher costs, currency risks, loss of revenue and problematic payments to Dutch clients and institutions if it loses the account.

On December 6, 2002, VanEps opened its business account with ABN Amro in the Netherlands. One of the conditions: the bank is entitled to terminate the relationship without giving any reason for it, providing that it observes a notice period of 30 days.

VanEps employs approximately thirty attorneys; four of them are working in the Netherlands. VanEps is associated with the Dutch law office of Van Doorne. Among its clients are financial institutions and multinationals. Ironically, ABN AMRO is also a client of VanEps.

VanEps has bank accounts in Curacao and a dollar account at First America. Plus, of course, a Euro account with ABN AMRO.

With a letter dated March 3, 2021, the bank terminated the relationship with VanEps per September 1, 2021. “The reason is that the costs for our services to foreign clients have significantly increased,” the bank wrote, citing expenditures for client and transaction research in the fight against money laundering and other methods of fraud. The bank has clients in more than one hundred countries outside of Northwestern Europe. ”This makes reviewing local legislation very expensive.”

Van Eps objected to the intention to terminate the relationship, but the bank maintained that their interests do not make the termination unacceptable. ABN AMRO extended the notice period with three months and later extended it until March 31, 2022.

In November VanEps demanded in summary proceedings that the bank continue the relationship. A month later the court ruled that the bank was not allowed to execute its intention to terminate. VanEps initiated a regular court procedure in an attempt to hang on to its Dutch bank account.

Losing the account would confront the law office with higher costs, currency risks and loss of turnover. Payments to Dutch relations and institutions would become more problematic.

The bank countered that it is allowed to exercise its right to terminate the relationship, that it does not have a special relationship with VanEps and that the law office can still use its own banking system. It must also be possible for VanEps, the bank argued, to open an account with another bank in the Netherlands or another European country.

Referring to an article in the civil code, the court noted that the termination would be void if it does not meet the standards of reasonableness.

VapEps receives annually around €1 million on its Dutch bank account and it uses these funds to pay suppliers. Without the Dutch account, the company would be confronted with exchange rate expenditures and with the 1 percent license fee the banks in Curacao levy. Opening a euro-account with a bank in Curacao is not possible.

Flip Wijers, the attorney for VanEps told the court that European clients want to pay in euros and that it is undesirable to use a foreign account for it because of the higher transaction costs. “A Dutch account also instills confidence with European clients, so losing the account could result in a loss of turnover.”

Allart Haasjes, the attorney for ABN AMRO, told the court that the bank had made the strategic decision to almost completely dismantle its international business branch. This service will stop in one hundred countries outside of Northwestern Europe, because the number of clients is limited.

The court concluded that the bank has decided to terminate its relationship with clients that are established as a foreign legal entity because the services are insufficient profitable or even losing money. “The bank is free to change its policy for accepting or keeping clients,” the court ruled. “ABN AMRO’s strategic choice is legitimate.”

The ruling furthermore states that VanEps does not depend on the Dutch account for its business activities. “Most of the transactions are done through several banks and the number of transactions via the ABN Amro account is limited.”

The ruling also states that VanEps has not shown that is is impossible to open an account with another bank. “The termination does not exclude VanEps from payment transactions. ABN AMRO’s freedom to enter into contracts should not be limited in such a way that it is going to be obliged to continue the service to shield VanEps against higher costs and possible delays in transactions.”

The court ruled that the interests of the bank carry at least the same weight as those of VanEps. It ruled however that termination of the banking relationship is not unacceptable.