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At present, information covered by bank secrecy rules may be disclosed to such third parties only with client's written consent or by court order. An exception within the law allows banks to disclose information to the extent necessary for granting loans or bank guarantees. Such information may also be disclosed, within certain limits, to a public prosecutor's office and other specified state authorities, including the National Bank of Ukraine.

The amendments have not yet been tested in practice, but they are expected to have the benefit of allowing Ukrainian banks to disclose necessary information to parties that work closely with them, such as auditors, legal counsel and debt recovery agents. As the law previously required prior consent when transferring confidential information, the National Bank of Ukraine recommended obtaining a prior catch-all authorization from clients for any such disclosure. This approach was widely used and many banks included this provision in their underlying agreements with clients. However, the amendments will significantly reduce the legal risks involved, making clear provision in legislation rather than requiring banks to rely on an agreement that a client or other interested party may subsequently seek to challenge in court.

The negative side of the amendments is that banks have discretion to transfer information covered by bank secrecy to 'third parties' (as defined in the legislation), but this could result in further unrestricted transfer of personal data in violation of the client's privacy rights.

The National Bank of Ukraine has three months from the entry into force of the amendments in which to make the relevant changes to its implementing regulations on bank secrecy.


For further information please contact

Svitlana Poroschuk
Partner
svitlana.poroschuk@asterslaw.com