The law of Nov. 8, 2020 “introducing provisions on basic banking service for enterprises in Book VII of the Economic Code” will enter into force on May 1, 2021. From this date, a company established in Belgium and registered in the Crossroads Bank for Enterprises (CBE) will obtain a right to a basic banking service if its application to obtain minimum payment services was refused by at least three credit institutions.
General
In practice, it appears that companies from certain sectors (including the hospitality sector, the newspaper dealers’ sector, the diamond sector and the soccer sector) encounter difficulties in opening or maintaining a bank account. Even for “second chance” entrepreneurs who had to endure a previous bankruptcy, opening a bank account does not always prove to be an easy task.
Such difficulties in obtaining minimum banking services are obviously very inconvenient, all the more so since entrepreneurs in Belgium are required by law to maintain a bank account.
In order to respond to this, the right to a “basic banking service” was included in the Economic Law Code (WER) in Belgium. Previously, the right to a basic banking service existed only for consumers (natural persons), but as of May 1, 2021, this right to a guaranteed service will also belong to companies.
Indeed, on this date, the law of Nov. 8, 2020, will come into force, whereby a company established in Belgium and registered in the Crossroads Bank for Enterprises (CBE) will obtain a right to a basic banking service if its application to obtain minimum payment services was refused by at least three credit institutions.
What?
This will give these companies the right to still open an account with payment services that allow them to carry out their professional activities.
Specifically, the basic corporate banking service consists of the execution of (i) payment transactions, (ii) direct debit, (iii) payment transactions through a payment instrument, and (iv) credit transfers including standing orders (Art. I.9(a) to (c) WER).
The introduction of a basic banking service for enterprises will make it less common for an enterprise to find itself without a bank account and will make it easier for so-called “second-chance entrepreneurs” in the aftermath of the corona crisis to obtain minimum payment services. However, the nuance here is that the basic banking service can still be refused (albeit under strict conditions) (art. VII.59/6 WER).
Refusal?
However, the possibilities for banking institutions to refuse the opening of a bank account by a company are significantly reduced. Refusal of the application to open a bank account will henceforth be possible only in certain circumstances, mainly in relation to the Act of September 18, 2017 on the prevention of money laundering and terrorist financing.
The possibilities of termination of the basic banking service by banking institutions will also be restricted from now on. The most important of these possibilities concerns when a member of the company’s governing body or a person in charge of effective management (broad interpretation), has been convicted of fraud, abuse of trust, fraudulent bank breach, forgery, or misuse of the bank account for illegal purposes. A termination under anti-money laundering laws also remains possible at all times.
Request
Enterprises must submit their application to obtain the basic banking service to the basic banking service chamber. After a positive opinion from the Financial Information Processing Unit (CTIF-CFI) or if CTIF-CFI has not reacted within 60 calendar days, the basic banking service chamber shall designate a credit institution established in Belgium to offer the basic banking service to the company.
Additional questions on this matter and what the right to basic banking service could mean for your business?
Contact us, we will be happy to help you with it.
