On 27 March 2019, a proposal of law was submitted in the Belgian Parliament aiming to introduce the basic banking service for companies. Similar provisions on the basic banking service already exist, but they only apply to consumers. The new provisions will be inserted in Book VII of the Economic Law Code.
In practice, companies often encounter difficulties in opening a payment account with a credit institution. This concerns in particular companies active in the diamond and hospitality sector, but also companies who want to recommence a commercial activity after failure or bankruptcy. However, having a payment account in order to be able to carry out the necessary payment transactions is a necessity for a company to participate in the economic system. By means of the proposal, the legislator intends to facilitate the possibility for a company to open a payment account with a basic banking service, enabling it to carry out its professional activity and to participate in the economic system.
An additional motive for the legislator to implement these provisions is the fact that the use of a payment account is the most effective means of investigation in the fight against money laundering and the financing of criminal activities.
Following the proposal, every company with an establishment in Belgium is entitled to the basic banking service. An establishment is defined as the place that can be geographically identified by an address, where at least one activity of the company is carried out or from which the business is run. Any company that meets this condition is therefore entitled to open a payment account with the corresponding basic banking services. The basic banking service is defined in section I.9, 1°, c of the Economic Law Code and includes the following:
- execution of payment transactions, including the transfer of funds to a payment account with the user’s payment service provider or with another payment service provider;
- execution of direct debits;
- execution of payment transactions through a payment instrument; and
- execution of transfers, including standing orders.
The King can broaden the scope of the basic banking service by royal decree to other services, in particular the possibility to deposit cash into a payment account or to withdraw cash from a payment account.
If a credit institution decides to refuse a basic banking service to a company, such decision must always be reasoned explicitly and adequately to the company concerned. The company must be able to understand the elements based on which the credit institution refuses to render the services. A credit institution has no obligation to provide such reasoning if this would be contrary to the objectives of national security or public order or in conflict with section 55 of the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash.
Article 6 of the proposal sets out the grounds for refusal that impose an obligation for a credit institution to refuse a basic banking service to a company. Article 7 of the proposal lists the grounds that allow a credit institution to terminate the basic banking service.
If a company is confronted with three consecutive refusals from credit institutions to provide the basic banking service, the draft law provides for a new procedure enabling the company to address the “Chamber of basic banking services”. This Chamber will be authorised to designate a credit institution that will be obliged to offer the basic banking service to the company. The Chamber will only designate a credit institution after it has obtained from the company concerned all documentation required to comply with the identification and verification obligations under the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash. However, not every credit institution could be designated as a basic banking service provider under this procedure. Taking into account the necessary compliance capabilities, the legislator has limited this possibility to bank and/or credit institutions established in Belgium that are included in the list of systemically important institutions.
The proposal has not yet been adopted by the Belgian Parliament. The law will enter into force on the first day of the sixth month following the day of its publication in the Belgian official gazette.
For more information, do not hesitate to contact Audrey Zegers, Senior manager, PwC and Olivier Hermand, Tax Partner and FS Leader, PwC.
