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Banking secrecy and big politics: Lithuanian way


Banking secrecy and big politics: Lithuanian way
In August 2011, a Belarusian opposition activist Ales Belyatskii was arrested and charged with hiding income from tax authorities. Information obtained from Lithuanian and Polish banks became the basis for the arrest. This information on the accounts owned by Belyatskii and Stefanovich (another opposition activist) was provided as an act of legal assistance on request of Belarusian Ministry of Justice. For Belarusians it is a non-story - it is a common practice that information obtained from banks in neighboring countries becomes a basis for arrest, an important piece of evidence or at least a tool for psychological pressure. What was the whole fuss about?

Perhaps, inconsistency in Lithuania's preferences attracted attention. It was pointed out that not long before Lithuania had actually been supporting Belarusian opposition. The Russian influence and connection with recent Golovatov case was mentioned. Is there a connection?

Let us take a closer look at the procedure of obtaining information from a foreign bank. A competent organization - public prosecution office or ministry of justice - makes an official request to the corresponding organization of the other country, as prescribed by international agreements. Then, foreign institution requests the information from the bank, most commonly in court. The court treats the matter formally - its primary concern is whether all the documentation is prepared correctly. If a bank has not provided information in time, it is being summoned to court as a defendant to discuss the justification for the act of giving out information. Unfortunately for the likes of Belyatskii, if the client is not important enough, the banks would avoid these complications due to additional costs. Belarusian authorities are overwhelming leaders at asking for information from Lithuanian and Latvian banks; Russia, Ukraine and Moldova are not uncommon, too. Marketing departments work well and there is no shortage of clients from Post-Soviet countries.

Obviously, there is nothing political about it at all. There is a request, then there is a reply. Nobody promised full confidentiality, and if a client is a suspect in a criminal case, and the request has been compiled properly, banks are legally obliged to provide all the information. They may try to protect the client if some formalities were not complied with, but it is costly and the client will have to pay for a lawyer.

It is even easier with private accounts. Any funds transfer to or from a private account includes information about account number and identity of holder, which is being kept in both banks (of sender and recipient). So if you send a money to a private account, which the authorities later become aware of, they also become aware of your account. Nothing special, and definitely nothing political.

Poland and Lithuanian have never been known for their banking secrecy traditions. Treatment of non-residents' accounts by Polish banks deserves particular attention (but it is another story). Be nice to your bankers, send them postcards on holidays. They are not allowed (let alone obliged) to inform you about the fact of request, but may somehow hint. For some reason, Belarusian activists chose the banks that were the least client-friendly: DnB Nord and SEB. They probably counted on political support, but in this case banks are far from politics, while Ministry of Justice stayed aside (which in most cases you would expected it to do). So it all went as it was supposed to, in accordance with the rule of law, which, after all, we all favor in the first place.




tags
Bank accounts, Banking secrecy, Lithuania, Poland
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