Apr 4, 2024 5 min read Articles

Financial Exclusion: The Struggle of Syrian Refugees in Europe

Marwa*, a Syrian refugee living in Belgium, faced a significant barrier to fully assimilating into Belgian society: her lack of a bank account. Opening a bank account in Europe is critical to participating in the local economy. Not only is a bank account required for receiving wages, as European law restricts wages being received in cash, but it is also essential for purchasing most goods and services. Marwa was already employed when she got to Belgium—in fact, she worked at the Syria Justice and Accountability Centre— but in order to receive a salary, she had to obtain a bank account.

Under the 2014 EU Payment Accounts Directive, legal residents are entitled to a “basic payment account,” which is an account that can receive and withdraw money. This law grants refugees and asylum seekers the right to open basic bank accounts. However, banks regularly fail to adhere to this law and discriminate against Syrians. The Migration Policy Institute reported that, as of December 2023, the aforementioned 2014 EU Payment Accounts Directive has not been implemented across the EU.

Marwa immediately faced obstacles to creating a bank account and was denied service at several banks. At two banks, the employees refused to give her permission to create an account without informing her of the reason. After many attempts, Marwa was able to obtain a bank account with a Belgian government-owned bank called Belfius Bank.

However, Marwa still faced difficulties in receiving her salary. A bank’s employee told her that it was impossible for a Syrian national to receive money from a U.S.-based NGO, as it was a “big risk” for the bank. When Marwa protested, the bank employee asked for the name of the NGO. As soon as he heard the word “Syria” in the name, he immediately refused, claiming that the bank’s system would automatically block the account. As there was no way for her to receive her salary, Marwa was forced to leave her job at SJAC in hopes of gaining employment based in Belgium instead.

Far from being the exception, Marwa’s experience is the norm for Syrian refugees in Europe. Tarek*, an NGO employee, arrived in Belgium as a political refugee. He was refused service at several banks in Belgium and forced to travel to France and the Netherlands in search of a bank that would provide him with basic financial services. Similarly to Marwa, he faced issues receiving his salary from a U.S.-based NGO. Despite Tarek not residing in Syria in over a decade, his nationality, according to bank employees, prevented him from receiving any money from the U.S. through their banking systems.

Tarek changed tactics and opened a private company to receive his salary, an endeavor that cost him approximately 10,000 USD. However, he was still not permitted to open a bank account for the registered company to receive his salary from the NGO that employed him.

Ahmad*, a Syrian who came to Germany and gained citizenship in 2023, reported that banks would not accept his travel documents, his only source of identification prior to obtaining citizenship—therefore violating 2014 EU Payment Accounts Directive.

In 2019, a similar case was taken to court in Ireland. A Syrian refugee who arrived in the country as part of Ireland’s Refugee Protection Program was denied a bank account, and told by a bank employee that they do not open bank accounts for Syrians. The case was taken to Ireland’s Workplace Relations Commission, which ruled that this was a case of direct discrimination.

Much of these issues are due to KYC, or “know your customer,” regulations in the EU, which require banks to verify potential customer’s identities and ensure that they do not participate in financial crimes such as money laundering or terrorist financing. Many banks lean towards over compliance with these requirements, leading to bank employees refusing to provide accounts to individuals from sanctioned countries, regardless of whether the person applying has committed financial crimes or sends or receives money from Syria. These practices are in place despite cheap and readily available services that check customers’ identities against international sanctions lists.

These discriminatory practices stand in stark contrast to the changes put in place for Ukrainian refugees after Russia invaded in 2022, when the EU gave permission for European banks to apply lighter anti-money laundering checks on Ukrainian refugees to ensure that they can open basic bank accounts. In fact, banks temporarily suspended requirements that Ukrainian refugees provide a passport or similar form of ID to open an account in order to facilitate their financial access.

Syrians’ access to financial systems in the EU is further complicated by a lack of financial literacy. According to a 2018 survey conducted in Germany, 65 percent of native Germans could correctly answer questions on basic financial concepts, compared to just 32 percent of Syrian refugees. This fact was reflected by other interviewees. Yaser, a Syrian asylum seeker residing in Berlin, reported “I moved from Damascus to Berlin almost five months ago, and I still haven’t fully grasped the tax system or had a chance to learn more about it since I’ve been pursuing paperwork and dealing with other challenges.” Ameena, also a Syrian migrant living in Germany, echoed the sentiment, saying that “there should be better information, workshops, and initiatives to encourage banks to adopt more inclusive policies for non-EU citizens.”

EU host countries should work to facilitate financial access and inclusion for Syrian refugees. First, know your customer laws should be amended as needed to ensure that over-compliance, resulting in discrimination, is not rewarded. The exceptions made for Ukrainian refugees should potentially be expanded to other groups who face the same barriers in obtaining forms of ID. Trainings on the effective implementation of these laws should be mandatory for bank employees, and financial institutions should face fines if they fail to adhere with the requirements of the 2014 EU Payments Account Directive. There should be clear avenues for Syrians to file complaints against banks refusing to open accounts on their behalf. Refugee host countries should also endeavor to provide educational resources to refugees to increase their financial literacy, increasing their access to loans, remittances, insurance, and investments so that they can fully participate in and contribute to the economy.

* Names and identifying information have been changed to protect the privacy of interviewees

Below are some resources that may serve as preliminary steps, should you or someone you know be attempting to open a bank account in a European country: