Bank account blocking can be a serious problem for businesses and individuals. Foreign banks closely monitor their clients transactions to prevent financial fraud, money laundering, and violations of international regulations.
In order to minimize the possibility of blocking an account and know what to do and where to go to restore a blocked account, experts from the consulting law firm Maira Consult have prepared 10 effective and useful tips for you.
What is financial monitoring? Why are accounts blocked?
First of all, it is necessary to understand whether banks have the right to block accounts? Financial monitoring (AML) is a system of measures used by banks to prevent money laundering and terrorist financing. As part of this system, banks analyze customer transactions, verify the sources of funds and assess possible risks.
In May 2015, the EU Directive 2015/849 (Fourth Anti-Money Laundering Directive AMLD4), which established requirements for financial institutions, companies and AML officers to prevent money laundering and terrorist financing. It obliged banks to implement enhanced customer due diligence measures, transaction monitoring, beneficial ownership identification, and mandatory employee training on AML risks.
Modern banks employ AML officers or AML compliance officers, specialists responsible for developing and implementing financial monitoring programs. It is worth noting that no bank will open an account for a new client until the AML officer conducts a thorough check of its planned activities and potential risks for the bank.
Among the main reasons for blocking an account, Maira Consult lawyers highlight:
- Suspicious or atypical financial transactions.
- Lack of supporting documents on the origin of funds.
- Payments from or to countries under sanctions.
- Working with counterparties of dubious reputation or included in sanctions lists.
- Violation of KYC (Know Your Customer) requirements and failure to provide the necessary documents.
How to avoid account blocking: key recommendations
1. Regularly check requests from the bank
As a rule, banks send requests for payment confirmation, origin of funds, or the need to update data in online banking or by e-mail. Missing such requests or failing to respond in a timely manner may result in an account being blocked.
In practice, all accounts are registered to the corporate email so that the company's accountant has access. However, we recommend set up an automatic forwarding of letters to your personal email so that you can be sure that important letters from the bank are not missed and you can control your employees. Timely receipt of a request from the bank will allow you to avoid blocking your account.
2. Notify the bank of new partners
If you have a new counterparty, notify the bank in advance. This will help you avoid delays in transactions and account blocking. When receiving payment from a new partner, banks may block money on a special account until you provide information about the counterparty.
The case of our client, who had a account in the Cypriot bank Bank of Cyprus. The bank sent a letter to the client's e-mail with information about the receipt of payment in the amount of EUR 3,000 from a new Estonian counterparty, ABC OU.
The letter contained a request from the Bank of Cyprus regarding ABC OU:
- Fill out the bank form F2-ΕΜΒ-010, in which you need to indicate information about the new partner, the planned turnover for the year, etc.
- Provide supporting documents in the amount of EUR 3,000 (invoice, contract);
- Confirm the nationality of the owner of ABC OU;
- Provide a share certificate confirming that the specified owner is the ultimate beneficial owner.
According to our advice, the client provided the bank with all the documents and sent a link to the ABC OU company page in the open state register of Estonian companies. As a result, the client received a payment to his account and avoided blocking his account.
3. Inform the bank about the increase in account turnover
When opening an account in a foreign bank, you informed the bank about the planned annual turnover on the account. A sharp increase in the turnover may raise suspicion among the bank. In order to avoid possible restrictions or blocking of the account, inform your private banker in advance about changes in the volume of transactions.
When opening an account in a foreign bank, all company data is entered into the system, including the planned company turnover, and if the company's turnover has increased several times, the system automatically blocks the account. From the experience of working with a Latvian bank Magnetiq Bank it is better to warn your private banker in advance about the increase in turnover than to provide explanations to the bank and spend time unblocking the account.
4. Prepare supporting documents for transactions
When making any transactions on your account, you should always have supporting documents confirming the transactions.
The services of the international law firm Maira Consult include not only opening accounts abroad, but also advising clients on the rules of working with the bank. We have extensive experience working with foreign banks and know the unspoken rules and requirements of banks.
Iryna Kucheriava partner at Maira Consult mentioned that to avoid blocking an account in a foreign bank, trading companies must have supporting documents for each transaction.
One of our clients followed this rule by choosing registering a LTD company in England. His business involves the purchase of metal-plastic structures, sun protection systems and blinds from Chinese manufacturers and their subsequent sale to Ukrainian companies. The client has an understanding of what documents need to be submitted to the bank for uninterrupted work with the account.
What documents should a trading company provide to a foreign bank ?
An example from the practice of one of our clients, who imports goods from China and sells them to Ukraine, allows us to clearly show what documents a trading company needs to provide to maintain an account in a foreign bank in order to avoid blocking the account. The list of documents is relevant as of 06.02.2025.
1. Contracts
- A purchase and sale contract between a Chinese supplier and an English company confirming the fact of purchase.
- A sales contract between an English company and a Ukrainian buyer, which substantiates the sale of goods.
- Acts of work performed.
2. Financial documents
- Invoice from a Chinese supplier (for a company in England).
- Invoice from an English company (for a Ukrainian buyer).
- Payment documents:
- Payment confirmation from the English company to the Chinese supplier.
- Payment confirmation from the Ukrainian buyer to the English company.
3. Transport documents
- Bill of Lading (CMR) - issued on the basis of a contract between a Chinese supplier and an English company, but the recipient of the goods is a Ukrainian LLC.
Important! Don't forget that nowadays bills of lading can be checked online and tracked not only the country of the supplier, but also the ports of call. If the bank finds out that the vessel was in a sanctioned port, companies can block the account.
4. Customs documents
- Certificates of origin (if required)
- Licenses or permits (if the product is subject to regulation).
If you need help with the preparation of contracts and documentation, please seek for legal advice.
5. Comply with KYC (Know Your Customer)
Banks and payment systems regularly update their customer data. In case of any changes in the company structure, you should immediately notify the bank of such changes. As a rule, the data is updated once a year and the following information is requested from the client:
- Confirmation of company data (legal address, company structure, etc.);
- Proof of the actual address (lease agreement, last utility bill or certificate of ownership in the name of the company);
- The company has a physical office. If the company does not have an office, it is necessary to explain to the bank how the business operates and indicate the location from which operations are managed;
- The presence of employees and their number;
- Confirmation of the data of the company's beneficiaries (it is necessary to update passport data, confirm the address of residence and provide a tax number);
- As a rule, banks ask for the company's financial statements to analyze whether the company's actual activities coincide with the figures indicated in the statements;
- In addition, it is necessary to update information about the company's activities for 2025:
- Annual turnover/balance sheet of the company, euros;
- Payment volumes, incoming transactions;
- Payment volumes, outgoing transactions;
- Number of incoming transactions per month;
- Number of outgoing transactions per month;
- Maximum one-time payment, incoming transactions;
- Maximum one-time payment, outgoing transactions;
- Countries from which payments will be received;
- Countries to send payments.
Please note that if you decide to change the beneficiary in the company, you need to make sure that the new owner of the company will be able to pass the bank compliance, because changing the beneficiary in the company is equivalent to opening a company account from scratch. If the new beneficiary does not meet the requirements of financial monitoring, the bank may not only refuse to continue servicing, but also block the company's account.
6. Check counterparties and payment directions
Before conducting financial transactions, check your counterparties in official company registers, use Google search and sanctions lists databases. This will help you avoid dealing with risky companies and subsequent account blocking. Nowadays, most company registers are publicly available and you can check the owner of the company, and even his or her citizenship. European banks do not currently work with companies whose beneficiaries are Russian citizens. You can work with a partner from the Czech Republic and not even realize that the ultimate beneficiary of the company is a Russian citizen. And this, in turn, will lead to the blocking of your company's account.
7. Use the account in accordance with its purpose
A business account should be used exclusively for commercial transactions, because when you opened it, you declared a certain type of activity that was approved by the bank. If you plan to spend the company's profits on personal needs, such as purchasing real estate abroad, paying for purchases in stores, or paying for other personal expenses, we recommend opening a personal account with a foreign bank. This will help to avoid unnecessary questions from the bank and possible blocking of the corporate account.
A client contacted Maira Consult with a request to open an account in a Swiss bank to receive commission payments from a Swiss company. The contract was signed on behalf of an individual entrepreneur, and the account was to be opened in dollars. At the same time, the client was planning to purchase real estate in Montenegro in the future.
Taking into account his needs, we offered a comprehensive solution: opening a multi-currency Account of a sole proprietor in Zapad Bank for receiving commission payments, as well as a personal account. This made it possible to transfer the earned funds to a personal account without any unnecessary questions from the bank and account blocking. As a result, the client successfully purchased an apartment in Budva using a convenient and legal financial mechanism.
8. Maintain a good relationship with a bank manager
A good relationship with a private banker can greatly simplify the solution of financial issues and even blocking an account, especially in international banking. Let's look at a real case of our client's interaction with a private banker at Emirates NBD Bank in Dubai.
In 2021, entrepreneur Oleg decided to move to the UAE with his family. At that time, he already had a registered company with the DMCC and used a corporate account with Emirates NBD Bank. As the business grew, he sought to build a trusting relationship with his private banker, so he met with him periodically for business lunches. During the annual update of the company's data, NBD Bank requested proof of residence in the UAE. It is important to note that Dubai has the Ejari system, which is a mandatory registration of lease agreements. Without registration in this system, the lease agreement is not legally binding. At that time, Oleg was looking for a new apartment, as his old lease had expired. Therefore, he could not provide the bank with an updated lease agreement in time, which could have led to the blocking of his account.
However, thanks to a trusting relationship with the private banker, the situation was resolved. The private banker, knowing that Oleg was actually living in Dubai and looking for a new apartment, explained the whole situation to the compliance officer and confirmed that the client was actually in the country. In practice, we understand how important it is to maintain communication with the bank and build long-term business relationships with a personal manager.
9. Diversify your bank accounts
If your business covers several areas, we recommend opening separate accounts for different types of activities to avoid blocking your account.
Our client, who imported Korean cosmetics and supplied them to the EU countries, decided to expand their business and add a new direction - the sale of accessories. At first glance, everything looked simple: a new product, the same counterparties, an existing account in the Polish bank Santander. However, the new activity led to additional checks, and the bank temporarily blocked the account, as the transactions and turnover differed from the company's usual work.
Maira Consult lawyers recommended opening an account in a Polish bank for the sale of accessories any bank PKO Bank. This ensured the smooth operation of all areas of our client's business.
10. Seek professional legal support
If you have difficulties unblocking your account or passing bank checks, it is important to contact experienced lawyers specializing in international banking.
Maira Consult experts will conduct a detailed analysis of the situation, help you prepare the necessary documents and communicate with the bank to minimize risks and ensure the smooth operation of your business. Entrust your financial matters to professionals!
How to maintain access to your account and financial stability?
Your communication with the bank should be based on the principles of trust and openness. This will not only simplify financial transactions, but also ensure the stability of your business, allowing you to avoid blocking your account, unnecessary risks and unforeseen situations.
