• Sanction Issued by Banking Regulator Enforcement Committee Overturned by State Council for Attempting to Shift the Burden of Proof
  • November 13, 2015 | Authors: Philippe Goutay; Anselme Mialon
  • Law Firm: Jones Day - Paris Office
  • In a decision of October 14, 2015, the French Supreme Court overturned a EUR 2 million sanction issued by the Enforcement Committee of the French banking regulator ("ACPR") against a major bank for allegedly failing to comply with the right to open accounts, whereby an individual who had been denied the right to have an account opened may petition the Banque de France, which then instructs a commercial bank to open an account.

    The Enforcement Committee considered that the gap between the number of requests made by the Banque de France to open accounts and the number of accounts opened by the bank in connection with this regulatory obligation is sufficient to characterize noncompliance with such obligations. The Enforcement Committee further considered that this gap revealed the likelihood of the violation and that there was no need to invite the bank to provide evidence as to steps taken in response to the requests from the Banque de France.

    The French Supreme Court rules that the Enforcement Committee could not rely exclusively on the "likely" test of the alleged violation to evidence breach of a regulatory obligation. In so doing, the Court shifted the burden of proof from the prosecuting authority to the defendant.

    The decision from the Enforcement Committee is therefore overturned, and the Enforcement Committee will need to decide anew.