Bank refuses to return EUR notes of criminal origin to a customer

Topic: Payment transactions Case number: 2024/05

The client submitted almost EUR 100,000 in banknotes to the bank in tranches a few days apart and wanted to have the equivalent value transferred to two accounts at other banks. A check of the notes at the German Bundesbank revealed that they came from a bank robbery in a country where a civil war was raging. The bank filed a money laundering report, which led to criminal proceedings against the client. However, this was eventually dropped. Despite this, the bank refused to return or replace the banknotes to the client, who was now represented by a lawyer, and he took the case to the ombudsman. After clarifying various questions about the facts of the case, the ombudsman came to the conclusion that the bank’s refusal was a risk decision that cannot be scrutinised in ombudsman proceedings. He did not recognise any misconduct in the bank’s decision and closed the proceedings with a final notice to the client.

An examination of the documents submitted by the client’s lawyer at the request of the ombudsman revealed that the majority of the disputed EUR notes had been retained by the Deutsche Bundesbank, which was able to establish from the numbers that they originated from the robbery described. A smaller portion was officially confiscated and destroyed in the discontinued criminal proceedings. Around EUR1,000 was considered harmless and handed over to the client.

The client had not explanation to the question where he had got the notes from. He stated that they came from his long-standing business activities and had been in his safe for a long time. Due to the falling EUR exchange rate, he now wanted to change them. He had no criminal record and had never committed a criminal offence. Despite the discontinuation of the criminal proceedings, it was clearly stated in the relevant order that the notes were indeed of criminal origin.

The ombudsman explained to the client’s lawyer that his intervention presupposes misconduct on the part of the bank that has caused the client damage or other detriment, and that mediation must not appear to be futile from the outset. In the present case, there were no recognisable arguments that the client’s lawyer had not already presented to the bank with vigor. The Ombudsman considered it crucial that the customer could not provide any evidence that he had acquired ownership of the notes in good faith, as he could not explain their origin at all.

It seemed clear to the Ombudsman that, in view of the highly likely sensitive origin of the notes, the bank had decided, after examining the factual and legal issues through its risk functions at an appropriate level, to hand them over only on the basis of a judicial decision. Under these circumstances, the ombudsman considered mediation proceedings, in which no binding decisions can be made for the parties, to be futile. He informed the client lawyer of this in a final decision and discontinued his efforts.