Attack on Bank Confidentiality

The reason why the National Bank appealed to the Constitutional Court was the fact that people’s deputies, parliamentary committees, and ad hoc investigating commissions keep requesting the NBU for information classified as banking secrecy. The NBU felt such inquiries to be rude interference on the part of deputies, which run counter to the Constitution and legislation in force.

However, the court ruled constitutional the right of people’s deputies and Verkhovna Rada committees to send inquiries to the NBU. In a comment on the court ruling, President of the Association of Ukrainian Banks (AUB) Oleksandr Suhoniako told The Day, “There is no need for our clients to worry: nobody has abolished banking secrecy.” Understandably, the NBU governor as well as other NBU officials should adhere to the letter of law when considering inquiries from deputies. However, the law On Banks and Banking does not authorize people’s deputies and their committees to access confidential bank information. The NBU must have the consent of the account holder to release his bank account information to people’s deputies. Meanwhile, the Cabinet of Ministers held a session of its own. It approved a bill intended to simplified access to confidential bank information for tax agencies. Yury Kravchenko, head of the State Tax Administration, stressed that amendments to the law On Banks and Banking are in keeping with FATF requirements, especially since banks, using the possibility to interpret the law loosely, are restricting tax agencies’ access to information. This affects the effectiveness of the fight against tax evasion and money laundering. If enacted, the proposed bill would oblige banks to provide information on international transactions to the STAU and Ministry for the Economy.

The AUB has not been informed of the nature of the proposed simplified access to banking information. However, Mr. Suhoniako believes that the amendments currently under consideration do not envisage any major changes to the very concept of bank confidentiality. As for the reference made to the FATF requirements, Mr. Suhoniako believes they are not designed to abolish bank secrecy in Ukraine. As he put it, “Our stand is well defined: bank confidentiality must be guaranteed on a par with other human rights.”