An association deposited significant amounts of cash collected as donations into its bank account, without identifying their source. Consequently, and against the backdrop of various media reports raising suspicions of its involvement in terror financing, the bank decided to completely block its account activity.
The Court held that the bank must refrain from closing the account, but added that the association will be prohibited from depositing cash into it. Generally, a bank is entitled, and even obligated, to refuse banking services if a reasonable concern arises that the activity is related to money laundering or terror financing. However, its decision must be reasonable and proportionate. The complete closure of an active bank account is the most extreme measure, and should be avoided if the risk can be addressed by imposing less harmful restrictions. Here, the bank established a reasonable concern for money laundering due to the collection of anonymous cash donations, but failed to establish a substantial concern for involvement in terrorism, as the evidence was mostly based on old, isolated publications of low weight. The money laundering concern is adequately addressed by prohibiting cash deposits into the account. Therefore, the account will remain active subject to a ban on cash activities.