Euro notes coming out of ATM

Many emigrants are having their Portuguese bank accounts blocked. Banks may ask for different information. Banco de Portugal explains what documents are needed.

Hundreds of customers, including emigrants, have had their bank accounts in Portugal blocked, unable to make withdrawals, payments or other operations. There have been many complaints to the Consumer Protection Association (Deco), on the Complaint Portal and to the Bank of Portugal.

At the root of it all is a new European directive on measures to combat money laundering and terrorist financing, which gave rise to new Portuguese legislation (law 83/2017) regulated by Banco de Portugal notice no. 1/2022.

As part of this legislation, Portuguese banks are demanding new identification information from account holders, even for existing accounts. And it is the failures or delays in updating this data by account holders that are the cause of the blockade.

In many cases, the most affected customers are those with low financial literacy, namely the elderly and emigrants, in cases where proof is required in person. As a result, accounts are only unblocked as soon as the required documentation is delivered to the bank.

Communication failures

However, there have been a number of situations in which banks have failed to communicate with their customers, or have demanded that documentation be delivered in person, which has particularly affected those living outside Portugal. As a result, this can lead to delays or even unawareness of the need to update personal information.

Deco confirms this. “There are gaps in the information provided by financial entities to customers, namely about the consequences of not updating data, or the means to do so,” said Natália Nunes, coordinator of the Financial Protection Office, in a recent article in the Público newspaper.

Personal data required

What personal information is required by law? There is an “initial” set of documents, but in addition to these, banks may ask for additional documentation, the Bank of Portugal (BdP) explains to Contacto.

This “initial” identification includes elements such as “photograph, full name, signature, date of birth, nationality listed on the identification document, type, number, expiration date and issuing body of the identification document”. According to the law, holders may also have to present their “tax identification number or, when they don’t have a tax identification number, the equivalent number issued by a competent foreign authority; profession and employer, if any; full address of permanent residence and, if different, of tax domicile; place of birth; other nationalities not listed on the identification document”, as stated in Article 24(1)(a) of the law, says the BdP.

The Bank of Portugal gives an example of the type of information that can be requested about one of these identifying elements: regarding “profession and employer, if any”, financial entities can ask for the salary slip as a complement to this information.

Different additional information

In addition to this basic information, each bank may request different additional information. “Financial entities may adapt the nature and extent of the procedures adopted in the context of compliance with the duty of identification and diligence ‘depending on the risks associated with the business relationship’, which may also result in the request for additional elements or more demanding means of proof,” says the BdP. It should be noted that the “business relationship” refers, for example, to operations related to the bank account, such as the opening of the account, or credit requests.

On the other hand, “it will be up to the financial entities to define, in the light of the circumstances of the specific case and the internal procedures defined, the situations in which it is required for customers to appear in person to carry out certain procedures or operations”. In the case of emigrants, the requirement to appear in person can be more complicated, which can delay the process of updating or even unblocking accounts, if applicable.

However, the BdP stresses that “in that legal regime, there is nothing to prevent a client from acting through representatives, provided that the financial entities comply with their duty of identification and diligence under the terms required by the Law and the Notice”. In other words, account holders can appoint a legal representative to update their data, always in compliance with the legislation in force.

Related article: Portuguese unhappy with banks because of opening hours and costs

Below are the main regulatory acts that directly or indirectly govern the fight against money laundering and terrorist financing (ML/TF). These are only part of the legal and regulatory acquis on this issue.

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