Banking Secret One of the mandatory principles on which the banking activity is based is “Safeguarding banking secrecy”. The protection of banking secrecy is expressly provided by Article 91 of the Law “On the Bank of Albania”, as well as by Article 125 of the Law “On Banks in the Republic of Albania”.
Banking secrecy is the obligation of banks not to disclose customer data without their consent. By client is meant the individual, natural or legal person, in whose name and on whose behalf banking activities are performed or benefit. The data or information on the client includes, such as the identity of the persons who have bank accounts, deposits, loans, who make transfers and other banking operations, the amount of values they have in these transactions, and anything related to the performance of a banking operation or profit from a banking operation.
A bank employee during the performance of banking operations on behalf of a client is informed about the personal property and non-property data of the client, for which he is obliged to keep secret. The employee is obliged to follow the rules established by law and the regulations of the Bank of Albania regarding the manner of handling client information. By maintaining the confidentiality of customer information, we mean the prohibition of the processing of this information, for personal purposes by authorized persons, for profit purposes by third parties outside the bank, for purposes other than those provided by the banking law for banking activity.
It will be called the treatment of information contrary to the obligation to maintain banking secrecy, when the security, civil status, personality and integrity of the client are violated in the first place, when we are dealing with the violation of direct or indirect personal, family, economic interests, financial and commercial affairs of the client, when the bank’s relations with the client or the client with third parties are violated, when the judicial process of the client’s cases is damaged, when due to the dissemination of data there are consequences on the client’s mental and health condition, and in all those cases where the client has declared a confidential interest or when the confidentiality derives from the law itself.
When the employee disseminates data related to the client’s relationship with the bank or with third parties, but always in the field of financial activity, we have violations of the mandatory provisions of the law on maintaining banking secrecy. To the client to repair the damage caused to him will be responsible in the first place the bank, which in this case bears the responsibility for the actions of its employees, but at the same time it will follow the responsibility of the employee through provisions of the Labor Code, as well as when the circumstances exist under the Criminal Code. But if the employee disseminates personal non-property data of the client, the responsibility will be personal of the employee and the responsibility will be settled according to the provisions of the Code Criminal, “Dissemination of personal secrets”. However, even in these cases, the responsibility of the bank is debatable, ultimately violating credibility and the principle of trustworthiness, which is the basic principle governing the bank-customer relationship.
The Law “On Banks in the Republic of Albania” clearly defines the entities that are obliged to maintain secrecy. They are:
- Administrators, who with the quality of their functions are aware of a lot of data, even in some very specific cases, the publication of which poses a risk to the person who is harmed but also to the bank itself, reducing the reputation and credibility of customers to her;
- Banking employees, regardless of whether they receive the data directly from the performance of their functional duties, or are informed about this data indirectly, or accidentally in the banking environment;
- Employees of the Bank of Albania, who according to the Law “On the Bank of Albania” have the right to receive information in commercial banks;
- Employees of the judicial system in cases of prosecution of concrete cases (criminal, civil, etc.);
- Investigation authorities (prosecution) in cases provided by law;
- Bailiffs, which include all bailiffs according to the law “On the organization and functioning of the bailiff service” in cases of execution of court decisions, auctions for non-performing loan collateral, etc., as well as persons who acquire it by law special this right. Such are, for example, the tax and customs authorities, the authorities coordinating the fight against money laundering, as well as the authorities that acquire this right on the basis of international conventions ratified by the Assembly of the Republic of Albania.
The large number of people who become aware of this data and in some cases the misuse of information by them, puts banks in a difficult position in relation to customers. Confidentiality is very important in the good name of a bank because it is a very delicate regulator of customer relations, which are based on mutual understanding and trust.
If for other entities, the preservation of banking secrecy is hypothetical, i.e. rather theoretically presumed than expressed concretely in legal provisions, for banks this obligation is legal. In some countries this obligation is not expressed in law, but is based on the old and important banking habit of “principles of correctness and etiquette” between the bank and customers.
It is important to identify the legal reasons for maintaining secrecy as well as its exceptional cases, but at the same time to determine the limits of the notion of “banking secrecy” or as it is called in the literature “legal evasions”.
The main cases of “legal avoidance” of banking secrecy are:
- The criminal process – the need to present facts that incriminate or prove the innocence of the defendants, requires the prosecuting authority whether the prosecution, the court, the defense or on their behalf, the accounting expert – to be made aware of certain types of data that enter the field of banking secrecy. In these cases the bank must be very careful to eliminate illegal damages to the interests of the client by disclosing data, be careful not to hide compromising data, or not to overdo it with “generosity” in disclosing information . For example, during the investigation process for pyramid schemes, it was necessary for the prosecution to be provided with complete data related to these schemes: if they had bank accounts as legal entities, if they had deposits in their personal name.
to the holders or their family members, in what currency, what was the balance of the accounts, the actions taken with these accounts, how many withdrawals from these accounts after the issuance of the law banning their activity, who ordered the withdrawals and who has benefited from them; connections and relations of these firms with third parties, whether Entities with commercial activity or public legal entities; foreign transfers in significant amounts as well as the bank address where these amounts have passed. So, in these cases, the banks had to follow the practices very carefully because, its mistakes could be mutual: firstly, the investigation could be damaged if the available data were not provided and secondly, the interests of third parties could also be damaged. who had relations with these firms.
The transfer of data, or the seizure of bank documents is done only in cases when there is a decision to initiate criminal prosecution and the decision of the prosecutor of the case to obtain data or review (inspection) of documents or their seizure. The documentation is made available for inspection or seized after regular minutes are kept with the persons authorized in writing by the investigative authority. In all cases of requesting a bank information, it is mandatory that the request signed by the head of the investigative authority be concrete and clear, contain the reason for requesting the investigation and the legal basis.
Banking secrecy in the civil process – The principle of secrecy finds the greatest application in these processes. The bank is freer to place restrictions on the information it provides. In a civil dispute, the court may order the bank to allow certain banking documentation to be supervised by an expert appointed by the court itself, or in cases where it is necessary to submit various banking documents, in accordance with known procedures.
The right of the Court to request data is subject to certain moments (specific conditions);
- first, the request of the interested party made in the court session, which must contain in itself the data that will be received from the bank and what is intended to be achieved with this data, so that the court can judge whether documentary inspection (inspection) or withdrawal of documents is required;
- second, the required inspection must be necessary for the facts relating to the case and it must be argued that it is impossible to deal with these facts in any other way;
- thirdly, the inspection can be exercised without seriously harming the interests of the inspected, whether the bank or its client, for the fact that the inspection can also take other additional circumstances or data for the inspected or persons who have relations with or to draw indirect conclusions about the financial condition and operations of the bank;
- fourth, the inspection should not arbitrarily violate the obligation and at the same time the right of the bank to maintain banking secrecy.
The bank’s refusal to provide the required information or to comply with the court order for inspection of documentation may create situations that cast doubt on the bank, because by not providing or concealing such facts it is complicit in the actions of the bank. illegal and may result in her being held accountable.
The bank should be careful in extracting banking data during court hearings, which, since they are open, may involve third parties who, following the trial, become aware of such elements that constitute professional secrecy. , official, personal of the client and in some cases even a state secret. In this case, the bank, through its representative, must request the trial panel to hold the hearing behind closed doors, arguing the necessity of this measure, which is provided as an option by the procedural law.
Tax and customs authorities. In the exercise of their legal duties, especially in the detection of entities that conceal tax and customs duties or do not pay them, the tax and customs authorities have the right recognized by law to request from banking entities data related to the fact whether or not they have bank accounts, the balance of these accounts or even certain actions performed by customers with third parties through the bank.
The Law “On Tax Procedures in the Republic of Albania” defines the obligation of natural and legal persons (including banks) to provide tax authorities with various information to determine the tax liability as accurately as possible, always in accordance with the laws and acts of other bylaws. They are obliged to allow these bodies to review all tax documents and any other document that serves to calculate the tax liabilities of third parties. This obligation, defined in Article 65 of the above Law, is an obligation in general for every subject of law.
However, for the specificity of the data that can be found in a bank related to the annual financial activity of one of its clients, the law in Article 67 (c) has defined the specific obligation to provide you with a written request of the tax authorities. the latter information regarding income arising from interest and expenses for interest payments, deposits and liabilities at the end of each year, deposits and liabilities at the end of each year, banking transactions, etc.
The law connects the right of the tax and customs authorities to receive information with the express legal obligation of the employees of these bodies to maintain the secrecy of the data with which they are acquainted during the exercise of their duties. The data are used only for the needs of administration and collection of taxes and customs duties. However, in practice there are many cases of professional misuse of data, not to mention in some cases the abuse of duty by tax officials, being protected by the right to seek information, a right guaranteed by law.
Interbank information. The experience of today’s Interbank relations shows that banks in the exercise of their activity need to receive information not only for their interests, but also on behalf of their customers. For example, a person will enter into a long-term sales contract with a bank customer, agreeing that the delivery of the goods will be done with repeated deadlines. The seller, before signing the contract wants to know if the buyer has solvency, because he wants his business to be safe. For this the seller asks for help from his bank, which on behalf of its client will contact the buyer’s bank and verify whether it is in such an economic condition to cope with this commercial operation.
This information is “reserved” and rather known and enforced by banking practice. Banks mainly maintain the confidentiality of their customers’ data, but without harming their interests, they also try to maintain courtesy relations with analogue banks, reports that mostly stem from the banking habit.
