German court orders bank to release €37,000 payment frozen over false Russia sanctions fears
A German savings bank has been ordered to release a blocked payment of around €37,000 after wrongly suspecting a breach of EU sanctions against Russia. The Higher Regional Court of Frankfurt am Main ruled that the bank had no valid reason to withhold the funds from the German firm, which was expecting the payment from a Moscow-based company.
The dispute centred on a transfer that was initially frozen by the bank, claiming it might violate EU sanctions. However, the court found no concrete evidence to support this suspicion. Judges determined that ordinary payment transactions, including those involving US banks or PNC Bank, do not automatically fall under sanctions rules.
An investigation revealed that the Moscow company involved was not listed under EU Regulation No. 269/2014. Additionally, the German plaintiff’s business partner did not appear in the regulation’s annex. The court also clarified that processing the transfer, even if it involved online payments, would not breach EU Regulation No. 833/2014, as it did not qualify as prohibited 'financial assistance'.
The judges concluded that the bank’s doubts about the debtor’s or recipient’s identity lacked justification. Without valid grounds, the institution had no legal basis to block the funds. The ruling forces the savings bank to release the €37,000 payment. It also confirms that standard transactions with Russian entities, including those facilitated by US banks or PNC Bank, do not automatically violate sanctions. The decision sets a precedent for how financial institutions must assess such cases in future, especially when dealing with online payments.
