US sanctions and the right to use bank accounts in European banks for non-residents of the European Economic Area

The article considers the decision of the Helsinki County court on the claim of a Finnish citizen to be granted the right to use banking services in Finnish banks from the international law perspective. The Helsinki district court, in its decision promulgated on 13.01.2020, rejected Boris Rotenberg’s claim against Svenska Handelsbanken AB, Nordea Bank Abp, Danske Bank, and OP Yrityspankki Oyj. The court recognized the financial risks of a Finnish citizen’s Scandinavian banks under US sanctions above international law and fair trial guarantees. There is no doubt that this court decision will have further consequences in the judicial proceedings of Western banks for foreigners who do not permanently reside in the European economic area (EEA), and in other similar cases, and in ensuring the judicial practice unity in EU countries. First of all, this applies to any foreigners who do not have the right to permanent residence in the EU countries, but who have real estate in the form of investments or regularly come for a holiday. Previously, buying real estate in Europe was considered a reliable investment of foreign funds and a guarantee for obtaining banking services in Western banks. Based on this legal precedent, the European courts can now recognize the risks of secondary US sanctions against any banks, not only in the case of Russians from the SDN sanctions list, but also on any suspicion of money laundering by bank employees. The court’s decision was based primarily on the testimony given by the former head of OFAC, who stated that even before the decision was made in 2017, the US administration already had a legal tool for punishing foreign individuals and legal entities who interact with Russians on the SDN sanctions list. As long as the US dollar is one of the main currencies in the settlements between the states, the US Treasury will control not only the dollar transactions, but also the very principle of the global banking system functioning. This court decision may become the first legal precedent for most European banks in the EU countries wherein the real estate of foreigners who do not live in the EEA countries is located, regardless of their citizenship and residence permit.