Bank not liable for legal costs in money laundering suspicion case: Higher Regional Court of Frankfurt am Main (Case No. 10 U 18/24)

Briefing

Authored by Associate, Siegfried Schumacher and Research Assistant, Marius Merkle.

Summary

On 25 February 2025, the Higher Regional Court of Frankfurt am Main ruled that if a bank reports suspicious transactions on a customer's account to the German Financial Intelligence Unit (Zentralstelle für Finanztransaktionsuntersuchungen) (FIU) and refuses to release money in connection with the transactions, the bank is not liable for any legal pre-litigation fees (vorgerichtliche Anwaltskosten) incurred by the customer, provided that the customer instructs the lawyer before the expiry of the waiting period (Wartepflicht).

In coming to its decision, the court referred inter alia to its legal interpretation of the term “frühestens” (earliest) (under section 46 para. 1 No. 2 of the German Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten (Geldwäschegesetz - GwG))) (GwG), which it defines as the obligation for a waiting period (Wartepflicht) that in specific instances and for valid reasons can be extended. The court's interpretation offered greater legal certainty with regard to measures referring to the provision. In this case, the court found the statutory three-day waiting period was the minimum but allowed a few additional days in this case for documented consideration.

Key takeaways

Section 43 para. 1 No. 1 GwG imposes a reporting obligation on obliged entities (eg banks) to report to the FIU (Meldepflicht von Verpflichteten) if given circumstances indicate that a transaction is related to, or stems from, a criminal activity that could constitute money laundering (Vortat der Geldwäsche).
A transaction that has been reported to the FIU or a public prosecutor's office (Staatsanwaltschaft) by the Bank may be carried out no earlier than three working days after the report.
The court found, that in light of the unusual nature of the transaction, namely the very large sum of money and potential liability claims resulting from a payment to an unauthorised payment recipient after expiry of a short waiting period, a bank could be granted a few additional days as an additional response and consideration period (Reaktions- und Überlegungszeit).
Nevertheless, it should be noted that court rulings do not provide a consistent answer to the question of how long the waiting period under section 46 para. 1 No 2 GWG should be (as shown below).
In principle, section 48 GwG gives banks protection from liability for reporting suspicious transactions during the three-day waiting period.

Background

In this case, the plaintiff, a long-standing customer, received two large transfers totalling approximately EUR1 million in a short period of time, far exceeding the usual activity of the relevant bank account. The bank reported the transactions to the FIU and refused access to the money. On the same day as that report, the customer instructed a lawyer, who, in the following days, demanded immediate release of the monies and reimbursement of corresponding legal costs. On appeal, the Higher Regional Court Frankfurt am Main upheld the release of the money but overturned the award of pre-trial legal costs by the regional court Wiesbaden.

The plaintiff sued the bank for reimbursement of legal pre-litigation fees. After the three-day period, the bank still refused to grant access to the account balance (Kontoguthaben) to the plaintiff.

Previous rulings

In contrast to the ruling at hand, previous rulings of regional courts established the following with reference the waiting period under section 46 para. 1 No. 2 GwG:

Regional court Wiesbaden – 3 O 238/23 (lower court’s decision)
The lower/regional court Wiesbaden found, in deviation from the express wording of section 46 para. 1 No 2 GWG: after the three-day waiting period expires without an objection from the FIU or the public prosecutor’s office, a transaction must be carried out and further delay by the bank shall be not permitted (Dies beinhaltet zwar keine ausdrückliche Verpflichtung zur unmittelbaren Auszahlung, kann aber letztlich nur so verstanden werden, dass mit fruchtlosem Ablauf dieser Frist die entsprechende Transaktion auch vorgenommen werden muss. Es kann nicht in das Belieben der jeweiligen Bank gestellt werden, weitere Zeit verstreichen zu lassen, wenn bereits die FIU innerhalb der normierten Frist keine Maßnahme getroffen hat).
Regional court Frankfurt am Main – 2-01 T 26/23
In this case, the court ruled that although § 48 GwG generally shields banks from liability for reporting suspicions, an exception arises if the bank egregiously violates the law, for example ignoring the three-working-day waiting period and keeping the account blocked for several weeks. Furthermore, section 46 para. 1 No. 2 GwG clearly implicates that a transaction must be carried out within three working days at the latest, meaning that an account blocked due to a suspicion of money laundering must be reactivated (Außerdem ordnet § 46 Abs. 1 Nr. 2 GwG eindeutig an, dass eine Transaktion spätestens nach drei Werktagen durchzuführen ist, ein wegen eines Geldwäscheverdachts gesperrtes Konto also wieder freizugeben ist).
Regional court Hamburg – 415 HKO 33/23
Here, the court found that, once the waiting period has ended, the transaction can generally be executed, even if there is still suspicion of money laundering or terrorist financing. The suspicion of money laundering shall not be grounds for refusing to execute a payment after the three-day waiting period has expired. Therefore, banks must process all transactions, even if there is still suspicion (Nach Ablauf der Frist gemäß § 43 Abs. 1 Nr. 2 GwG darf die Transaktion grundsätzlich ausgeführt werden, auch wenn weiterhin ein Verdacht auf Geldwäsche oder Terrorismusfinanzierung besteht. § 43 Abs. 1 Nr. 2 GwG sieht ausdrücklich nur eine zeitliche befristete Pflicht vor, Transaktionen nicht auszuführen).
Regional court of Berlin – 37 O 473/22
The court interpreted the three-day waiting period not as a hard deadline. However, even a suspicion of money laundering cannot justify withholding the money for months without intervention by the public prosecutor's office or other authorities, neither under Sections 43 and 46 of the GwG nor under other provisions (Zwar bestimmt § 43 Abs.1 GwG wohl keine genaue Frist, wann spätestens eine beantragte Transaktion nach Meldung an die Zentralstelle für Finanztransaktionsuntersuchungen vorgenommen werden muss. Eine monatelange Einbehaltung rechtfertigt aber auch ein Geldwäscheverdacht ohne Eingriff der Staatsanwaltschaft oder sonstiger Behörden weder nach §§ 43, 46 GwG nicht).

BaFin’s AuA

In contrast to the previous rulings (see above) and in line with the approach of the Higher Regional Court’s decision (see below), the updated guidelines of the German Federal Financial Supervisory Authority (BaFin) regarding section 46 GwG (Auslegungs- und Anwendungshinweise) (AuA) could indicate another interpretation of the meaning “frühestens” (at the earliest). Thus, transactions may be executed after the expiry of the three working days (frühestens) following a suspicion report, provided no prohibition has been issued and no suspicious circumstances remain. However, if there are clear indications of money laundering or terrorist financing, then it may be appropriate for the institution to further delay execution even beyond those three days (Ausnahmsweise kann ein weiteres Anhalten der Transaktion aber z.B. erforderlich sein, wenn sich Hinweise für eine Geldwäschehandlung oder Terrorismusfinanzierung klar aufdrängen).

Decision

The Higher Regional Court of Frankfurt am Main found that the bank was not liable under section 280 para. 1 BGB, as the delay in payment was not due to fault.

A claim for pre-litigation legal costs was denied, because the bank was not yet in default and no culpable breach of contract was apparent at the relevant time. Ultimately, the court found the bank acted unverschuldet (without fault) and noted that under section 48 para. 1 GwG, liability cannot be imposed for submitting a suspicion report in good faith.

The court thereby acknowledged that section 46 para 1 No. 2 GwG permits execution of the transaction at the earliest (frühestens) after a three-day waiting period following notification; not an obligation for immediate payment. Therefore, the transaction shall be carried out at the earliest after a three-day waiting period. Given the potential liability incurred by the payment after the short waiting period expires under section 46 para. 1 No. 2 GwG, the bank can be granted a few additional days for response and consideration (einige wenige weitere Tage als Reaktions- und Überlegungszeit zuzubilligen). This finding aligns with BaFin's AuA.

Essence of the decision in connection with the AML Directive

This decision is considered in context and in accordance with the interpretation of EU AML Directive (EU 2015/849 prevention of the use of the financial system for the purposes of money laundering or terrorist financing) (AML Directive). Pursuant to Article 35 para. 1 AML Directive, the obliged entity must refrain from carrying out transactions until it has completed the necessary action in accordance with Article 33 para. 1 (a) AML Directive and have complied with any further specific instructions from the FIU.

The wording of section 46 para. 1 GwG, which provides that a transaction may be carried out at the earliest “frühestens” after the expiry of three working days following a notification under section 43 GwG has been confirmed by the decision and BaFin’s AuA. It can be derived from the decision that the three-working-day period establishes the earliest lawful execution point in light of the AML Directive and that absent a timely prohibition or further instruction by the FIU/prosecutor, execution is appropriate after that period.

However, BaFin’s AuA and the Higher Court’s ruling recognise a narrow, fact-specific margin for additional, well-documented caution in exceptional cases where clear indications of money-laundering or terrorist-financing risk persist after the three days. This does not constitute a general right to delay; any further postponement must be justified and well documented. Thus, exceeding the three-day waiting period can result in claims if fault exists and is not automatic.

The ruling seeks to balance prompt access to customers’ money with the need for appropriate case-by-case scrutiny where reasonable grounds for suspicion exist. It provides some additional legal clarity and a narrow protective margin for obliged entities. Until a highest court decision is rendered, obliged entities have to deal with legal uncertainties, must navigate this area with caution and document their decision-making process carefully.