In Belgium, since a law of 24 July 2008, there has been legislation that essentially provides for a kind of confiscation or expropriation of the property of citizens and companies: the State simply appropriates the credit balance of bank and securities accounts (and other assets) that it first defines as “dormant.”
Until today, this was possible if the assets had been “dormant” for at least thirty years. The federal government now plans to shorten this period to just five years. For many reasons, this is highly problematic. An overview.
What is a “dormant” account?
An account is considered “dormant” if no transactions have taken place for five years and there has been no contact with the financial institution managing it, whether in person or by, for example, logging in online.
This does not only concern regular bank accounts but also savings accounts, securities accounts, assets stored in safe deposit boxes (for which rent is no longer paid or the rental agreement has been terminated by the bank…), and even insurance products where the beneficiary has failed to make contact for (only) four months.
Not only private individuals are targeted, but also companies!
What happens when such a “dormant” account is identified?
The administrators of these accounts (essentially banks and insurers) must, in theory, first attempt to “trace” the owners of the assets. They do so by sending a (registered) letter to one or more addresses, sometimes with the help of data from the National Register.
If no response follows, they must transfer the assets to the Deposit and Consignment Office, which is essentially a financial institution owned by the government. At present, more than 750 million euros are said to be held at the Deposit Office.
From that moment, the presumed owners have thirty years (soon to be only five years) to reclaim their assets (plus potential interest), after which they simply become property of the State…
The problematic nature of this regulation
Generally speaking, the appropriation of assets belonging to citizens by the government is nothing less than unlimited forfeiture or expropriation. This is prohibited under a series of international treaties (including Article 1 of the First Protocol to the ECHR) and the Constitution (Article 16). The Constitutional Court has repeatedly ruled this way.
The government ignores this because—who will complain? After all, no one shows up. And if someone does show up, everything is simply returned. So what’s the problem?
There are already established procedures that safeguard the rights of heirs and beneficiaries—under judicial supervision of course—such as in cases of estates that are opened without known heirs (see Articles 4.37 and 4.58 of the Civil Code). This regulation need not take those into account. That is peculiar, especially since, if the bank has access to the National Register for this purpose, it could perfectly well determine whether someone has died…
Finally, there can be entirely legitimate reasons why citizens or businesses do not contact a bank or check an account for a certain period. Think of people who, for professional or family reasons, must live abroad for a long time and leave their savings to accumulate in a savings or securities account, or keep their gold in a safe-deposit box. One can easily imagine a standing order to pay the box rental failing for some unforeseen reason, without the renter noticing.
Likewise, elderly individuals in good health, but with limited mobility, isolated in rural areas, without close family, unfamiliar with the internet and not well-read, may simply leave their savings untouched because they do not need them.
And what about a minor for whom parents (as legal representatives) once opened a savings or securities account, which the child never looked at again because—even at the age of thirty—he did not yet need the money?
What if communication goes wrong after a corporate merger or split, causing the bank to continue writing to the wrong legal entity or to misinterpret the legal effects of the restructuring?
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Or what about heirs of a wealthy great-aunt who emigrated years ago to the United States or Australia? Is it really acceptable for the State to pocket most of their inheritance under this “dormant” scheme?
Citizens and their property deserve more respect from their government. Confiscation and expropriation of property can only occur with judicial authorization or, at minimum, judicial oversight, not through unilateral actions by a few banks in consultation with the State.
Actions and conclusions
There are mechanisms to check whether you own any assets that the State considers “dormant.”
At the same time, it is advisable to prepare a list of assets that could fall under this regulation—especially if you plan to move abroad for a long period or if it concerns older individuals who have lost some self-reliance and familiarity with modern technology (parents, grandparents).
If you move abroad for the medium or long term, you can, of course, simply take your money with you and deposit it in a foreign account. That guarantees the Belgian grab culture can’t touch it.
Should you nevertheless be confronted with an application of these legal provisions, you always have access to the courts, which can restore the proper balance, with or without a preliminary question to the Constitutional Court.
Vanbelle Law Boutique is happy to assist you with these steps and in protecting your (constitutional) rights and interests, as well as those of your business and your family.
