A company specialising in prepaid bank cards distribution brought an action against a competitor before the Commercial Court on the basis of Article 145 of the Code of Civil Procedure (which provides that a party may request pretrial investigative measures) to request document discovery.
The defendant brought a counterclaim based on unfair competition resulting from the claimant’s failure to comply with banking regulations and requested that it be provided with an accounting statement certified by statutory auditors.
On appeal, the Court of Appeal of Aix-en-Provence enjoined the claimant to provide this accounting statement.
The claimant complained before the Cour de cassation that the Court of Appeal had ruled that the counterclaim based on non-compliance with anti-money laundering and anti-terrorist financing regulations was doomed to failure as the alleged breaches could not give rise to compensation to a third party.
In a rather surprising decision dated 27 September 2023, the Cour de cassation ruled that “compliance with the obligations provided by Articles L. 561-1 et seq. of the Monetary and Financial Code on anti-money laundering and against the financing of terrorism necessarily entails additional costs for an operator. As a result, a competitor’s failure to comply with these regulations gives it an undue competitive advantage, which may constitute unfair competition“.
In a ruling dated 21 September 2022, the Cour de Cassation however ruled that “[t]he due diligence and reporting obligations imposed on financial operators pursuant to Articles L. 561-5 to L. 561-22 of the Monetary and Financial Code […] serve the sole purpose of fighting against money laundering and the financing of terrorism” and held that “the victim of fraudulent conduct cannot rely on non-compliance with the aforementioned vigilance and reporting obligations to claim damages from the financial institution“.
It follows from these two rulings that a banking institution’s failure to comply with banking regulations relating to anti-money laundering and anti-financing of terrorism does not entitle the victim of fraudulent conduct to compensation but does constitute unfair competition against third-party banking companies.
These decisions are part of a hot topic in a context marked by increased individual investments, often online and in new sectors such as cryptocurrencies, and an upsurge in scams. This issue has come under renewed scrutiny in the latest report from the authority in charge of Competition, Consumer Affairs and Fraud Control (DGCCRF), which assessed the practices of banks and credit institutions over the years 2021 and 2022.
Incidentally, this ruling reiterates a classic solution whereby decisions rendered on the basis of article 145 of the Code of Civil Procedure governing pretrial investigative measures must establish that the party concerned is in possession of the requested document(s), which excludes, in particular, requests relating to a non-existent document that the defendant would be enjoined to prepare (in this case, a certificate from the statutory auditor).
Com., 27 September 2023, n°21-21.995
