Banks are allowed to disclose information, that contains bank secrecy, only in the amount that is determined by law for a particular state agency, depending on its competence, otherwise such disclosure is a violation of the client’s right.
Financial transparency of business intercourse plays a key role in anti-corruption measures. The weakening of the banking secrecy regime is determined by the state’s orientation on European example and to desire to eradicate corruption in Ukraine, identification of offenders and bring them to responsibility.
However, preventive measures of illicit enrichment must, first of all, meet the goals of their implementation, but not to become a covert basis for law enforcement and regulatory bodies to unreasonably inspect individuals and legal entities.
On 28th November, 2019, the law “On Amending Certain Legislative Acts of Ukraine Regarding the Confiscation of Illegal Assets of Persons Authorized to Perform the Functions of the State or Local Government, and Punishment for the Acquisition of Such Assets” came into force, which amended, in particular, Article 62 of the Law “on banks and banking activities” (hereinafter – the law).
These changes allow prosecutors; Security service; State Bureau of Investigation of the National Police; National Anti-Corruption Bureau; Antimonopoly Committee; National Agency for the Prevention of Corruption; National Agency for the Identification, Investigation and Management of Assets Obtained from Corruption and Other Crimes; State Tax Inspectorate; state executive service bodies and private executives to receive information containing bank secrets about legal entities and individuals without a court decision.
Now, within 10 working days from the receipt of a written request from the abovementioned state agencies, the bank is obliged to disclose information containing bank secrecy. The amount and content of the information requested depends on the authority of the agency.
Thus, according to the stated norms of the law, the requirement of the relevant state agency to receive information containing banking secrecy must:
• be written on the letterhead of a state body in established form or sent electronically;
• be signed by the head of a state body (or his deputy),be affixed by a seal or authorized by a qualified electronic signature of the head of a state body (or his deputy)
• contain the legal grounds for obtaining this information;
• contain references to the rules of law under which a state body is entitled to receive such information.
Whether a bank employee can objectively estimate the competence of a law enforcement agency from the information requested by him, balancing between the prohibition to disclose a client’s secret and responsibility for failure to provide information, is a rhetorical question.
For instance, if the State Tax Inspectorate can request information only on the availability of bank accounts from a person (Сlause 4 of Paragraph 1 of Article 62 of the law), then at the request of the state executive service or private executor, the bank is also obliged to provide information on the state of the debtor’s accounts, cash flows and operations on the accounts of the debtor on a particular time frame, as well as information of the debtor’s agreements on the deposits of valuables or the provision of an individual bank safe for rent.
Thus, the disclosure of information containing bank secrecy is allowed for bank only in the amount that are determined by law for a particular state agency, taking into account its competence, provided that the written request of the state agency corresponds to the form and content of the norms of Part 2 of Article 62 of the law. Otherwise, this is a violation of the client’s right on his bank secrecy, that may lead to the protection of violated rights in court.