Lloyd's Maritime and Commercial Law Quarterly
EEC BANK SECRECY PROVISIONS
Hillegom Municipality v. Hillenius
The question of bank secrecy has led to some interesting litigation in recent years. The cases concerning the purported extraterritorial effect of orders made by American courts and grand juries and the reaction thereto of English and Commonwealth courts are only one of the areas of controversy.1 In the entire field, the difficulty is how to maintain a balance between the need of respecting the confidentiality of information obtained by banks by reason of their close relationship with their customers and of ensuring that this privilege is not abused to the disadvantage of the public as a whole. The hypothetical case frequently used to initiate the discussion of the problems involved is that of the remittance of money, which a bank suspects has been acquired in the context of a criminal act perpetrated by its customer. Under what circumstances does the public interest, which requires the bank to alert the authorities, override the bank’s duty to its customer?
In English law, the answer depends primarily on the common law principles laid down in Tournier v. National Provincial Bank.2 It is recognized that, inter alia, a bank is entitled to divulge information when its disclosure is required to protect the national interest. It is, however, accepted that such a duty arises only in extreme circumstances. To date, there is no decision applying this principle. Another exception to bank secrecy recognized in English law is that a bank is under a duty to make disclosure when ordered to do so by a court of law.3 At common law, information obtained by a bank about its customers is, therefore, not absolutely privileged.4
A question that has not been given careful consideration to date is whether this somewhat vague common law doctrine may be affected by EEC Council Directive 77/780.5 The main object of this Directive, as stated in its preamble, is to harmonize the laws, regulations and administrative provisions relating to the taking-up and the pursuit of the business of credit institutions in the member states. The Directive, though, is meant to constitute only a first step in this process; its target is to eradicate any glaring or fundamental inconsistencies rather than to introduce complete
1. See Ellinger, “Extraterritorial Aspects of Bank Secrecy”, [1985] J.B.L. 439.
2. [1924] 1 K.B. 461, esp. at p. 485.
3. And note the bank’s duty to disclose information to duly appointed sequestrators: Bucknell v. Bucknell [1969] 1 W.L.R. 1204; Eckman v. Midland Bank Ltd. [1973] Q.B. 519.
4. For recent instances, where disclosure was ordered by means of discovery and in the context of an action to which the bank was not even a party, see A. v. C. [1981] Q.B. 956: Bankers Trust Co. v. Shapira [1980] 1 W.L.R. 1274.
5. [1977] O.J. L322/30; [1978] Commercial Laws of Europe 163.
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