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Banking secrecy

Mafalda Monteiro

Last September, Law 36/2010, of September 2 2010 amended the General Framework of Credit Institutions and Financial Corporations (RGICSF). The aforementioned law sets forth that, effective from March 1 2011 all facts and elements subject to banking secrecy may be disclosed to judicial authorities, if and whenever a criminal procedure is in order.

The new legal framework foresees the creation of a database within the Portuguese Central Bank (Banco de Portugal – BdP) containing all existing bank accounts in the banking system. For that purpose, the entities authorised to open bank accounts will have to report to the BdP the account numbers, holders, and authorised users of their own accounts.

Additionally, Law 37/2010, of September 2 2010, was also enacted to approve new procedures for the derogation of banking secrecy, thus amending Portugal's General Tax Law (LGT). Amongst these amendments, the new law now provides for a broader spectrum of scenarios in which tax authorities are allowed to access taxpayers' banking information and documents without prior authorisation from the owner/holder of the protected data. This means that tax authorities shall have prompt access to banking information and documents when a taxpayer is in debt with Social Security.

This shift in applicable laws, vis-à-vis the banking secrecy, breaks away from a long-lasting idea that the latter was in fact a fundamental right in the Portuguese Constitution under the umbrella of the right to privacy. Hence, like many other fellow EU members, Portugal has contributed to the demise of banking secrecy as an absolute civil liberty.

Mafalda Monteiro

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