Update on the right to a bank account
Dear editor,
It should have surprised absolutely no-one in the Sint Maarten business community that businesses now must place ads in a newspaper to get a bank’s attention, as happened in the January 6th edition of The Daily Herald. Apparently, the business simply tried to set up online banking with three banks but couldn’t get through for over a month. This is not only a national embarrassment, but also a clear and present danger to the economic recovery of our island.
Reports that the contractor that is building our new national hospital is not able to open bank accounts, and reports the issues with payment to subcontractors, should be a very load alarm bell.
We all have heard complaints on the street and in Parliament about the ridiculous requirements banks now impose on the public just to open an account. One large local bank wouldn’t even set up a first appointment with me for four months straight. I shared this with a friend who laughed: he had been trying to get that same bank to open a business account for two years. In the meantime, his business used a foreign bank account for their local operations. Maybe Parliament will finally pass the Consumer Banking Protection Law we have hardly heard about for well over a year.
We all know the banks’ excuses: “it’s the Central Bank, it’s the CFATF requirements, FATCA and/or we are afraid of de-risking.” Some of this holds water. And, yes, money laundering is an issue and regulations that aim to prevent it are real. “Know Your Customer” and “Customer Due Diligence” requirements are real. And, yes, the right to a bank account has not (yet) been laid down in Sint Maarten law, like it is in many other countries.
But what some banks don’t appear to realize is that they have an important place in the current economic system: properly operating a business without a bank account is impossible. By dragging their feet when opening business bank accounts or point of sale terminals, banks force businesses to deal only in cash. In other words: the banks are not promoting, in action, the fight against money laundering.
Banks all over the world try to limit their exposure to risky clients. Sint Maarten and Curacao have had numerous court cases regarding banks terminating accounts for such clients. Sometimes the customer loses, but sometimes they win. Due to this uncertainty, are the banks changing tactics? Are they simply lowering their service standards to force customers out?
Last year, a major Dutch bank tried to terminate the accounts of clients living in Curacao, Sint Maarten and the BES-islands. This list Included several attorneys who had litigated such terminations in the Dutch Caribbean. After a major PR offensive, legal threats, and involvement by the Dutch Parliament, the bank changed its course and allowed these residents to remain clients. This bank now uses a new tactic to scare away the unwanted client: the monthly fee increased tenfold.
But the times appear to be changing. One of the most unbankable persons in the world (An ‘Accidental American’ who refused to obtain a US tax identification number), was protected in a Dutch court judgment of December 29, 2021 when the bank attempted to terminate his account.
Additionally, several Dutch Banks were forced in injunction procedures to open bank accounts for coffee shops (selling cannabis). A Dutch (and at least one Aruban) bank was ordered to open accounts for businesses in the entertainment industry. However, we have yet to see a court case wherein a Sint Maarten business or resident tries to force a Sint Maarten bank to open bank accounts, or expand their services (for instance to online banking, POS terminals or cash deposit services).
If you would like to know more about your rights and ways to enforce your rights, please contact a competent attorney for more information.
Name withheld on the request of the author
###
