CAN BANKS STILL KEEP A SECRET? The duty to keep customer information confidential affects banks on a daily basis. Bank secrecy regimes around the world differ and multin ational banks can find themselves in conflicted positions with a duty to protect information in one jurisdiction and a duty to disclose it in another. This problem has been heightened by the international trend promoting infor- mation disclosure in order to combat tax evasion, money laundering and terrorist financing. The US Foreign Account Tax Compliant Act (FATCA) is perhaps the most well-known. At the same time, data protection legisla- tion is proliferating around the world. This book offers a holistic treatment of bank secrecy in major financial jurisdictions around the world, east and west, by jurisdictional experts as well as chapters by subject specialists cov- ering the related areas of confidentiality in its broader privacy context, data protection, conflicts of laws, and exchange of information for the purposes of combatting international crime. This project was financed by the Centre for Banking & Finance Law, Faculty of Law, National University of Singapore. Sandra Booysen is an associate professor at the Faculty of Law, National University of Singapore and an executive committee member of the Faculty’s Centre for Banking & Finance Law. Her teaching and research interests are in the fields of contract and transactional banking. Dora Neo is an associate professor at the Faculty of Law, National University of Singapore and Director of the Faculty’s Centre for Banking & Finance Law. Her teaching and research interests are in the fields of contract, banking law and secured transactions. CAN BANKS STILL KEEP A SECRET? Bank Secrecy in Financial Centres Around the World SANDRA BOOYSEN National University of Singapore DORA NEO National University of Singapore University Printing House, Cambridge CB2 8BS, United Kingdom One Liberty Plaza, 20th Floor, New York, NY 10006, USA 477 Williamstown Road, Port Melbourne, VIC 3207, Australia 4843/24, 2nd Floor, Ansari Road, Daryaganj, Delhi-110002, India 79 Anson Road, #06-04/06, Singapore 079906 Cambridge University Press is part of the University of Cambridge. It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence. www.cambridge.org Information on this title: www.cambridge.org/9781107145146 DOI: 10.1017/9781316535219 © Cambridge University Press 2017 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2017 A catalogue record for this publication is available from the British Library. Library of Congress Cataloging-in-Publication Data Names: Booysen, Sandra (Commercial law researcher) editor. | Neo, Dora Swee Suan, editor. Title: Can banks still keep a secret? : bank secrecy in financial centres around the world / edited by Sandra Booysen, National University of Singapore, Dora Neo, National University of Singapore. Description: First Edition. | New York : Cambridge University Press, 2017. | Includes bibliographical references and index. Identifiers: LCCN 2017006679 | ISBN 9781107145146 (hardback) Subjects: LCSH: Confidential communications—Banking. | Banks and banking—Records and correspondence—Law and legislation. | Disclosure of information—Law and legislation. | Data protection—Law and legislation. | BISAC: LAW / Banking. Classification: LCC K1089 .C35 2017 | DDC 346.082—dc23 LC record available at https://lccn.loc.gov/2017006679 ISBN 978-1-107-14514-6 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Websites referred to in this publication, and does not guarantee that any content on such Websites is, or will remain, accurate or appropriate. To Peter Ellinger – colleague, mentor, friend CONTENTS List of Contributors ix Foreword xi Peter Ellinger Part I Bank Secrecy in Context 1 1 A Conceptual Overview of Bank Secrecy 3 Dora Neo 2 Bankers’ Duties and Data Privacy Principles: Global Trends and Asia-Pacific Comparisons 31 Graham Greenleaf and Alan Tyree 3 Bank Secrecy and the Variable Intensity of the Conflict of Laws 62 Christopher Hare 4 The International Pressures on Banks to Disclose Information 114 Chizu Nakajima 5 International Developments in Exchange of Tax Information 134 Martha O’Brien Part II Bank Secrecy in Financial Centres Around the World 161 6 China 163 Wei Wang 7 Germany, with References to the European Union 193 Christian Hofmann vii viii contents 8 Hong Kong 224 Stefan Gannon 9 Japan 252 Reiko Omachi 10 Singapore 278 Sandra Booysen 11 Switzerland 308 Peter Nobel and Beat Braendli 12 The United Kingdom 337 Keith Stanton 13 The United States of America 368 Lissa Broome 14 Conclusion 389 Sandra Booysen Index 399