Bank Secrecy and Confidentiality Law in Practice in Australia and Their Impact on the Control of Economic Crime

Abstract

This paper examines the effect of bank secrecy in Australia on disclosures to provide information in the interests of better regulation. At common law, the banker/customer relationship is a relationship of confidence which includes a duty to maintain secrecy and confidentiality about its customer’s accounts under the Tournier rule (UK, 1924). The Tournier rule has exceptions. A bank is not in breach of bank secrecy and confidentiality if it discloses information: (1) under compulsion of law, such as by legislation. Examples include disclosure under the Privacy Act which requires disclosure ‘required by or under law’, the Financial Transaction Reports Act 1988 (Cth), the Proceeds of Crime Act 1987 (Cth) and what is now the Australian Securities and Investments Commission Act 2001 (Cth). (2) where there is a duty to the public to disclose, such as where it suspects terrorist activities (3) where the interests of the bank require disclosure (eg litigation involving the bank) and (4) where the disclosure is made by the express or implied consent of the customer (customer has ticked the box).