Lex Thielen of Alliott Group law firm member Thielen & Associés provides an introduction to the legal issues associated to banking secrecy in Luxembourg

Banking secrecy is defined as the obligation, the compliance with which is sanctioned by the criminal law, put upon the professionals of the finance sector not to disclose the confidential information they receive in the performance of their duties.

This principle has experienced an important development during the 20th century, but is nowadays seriously contested.

Indeed the European construction has given birth to intergovernmental mutual aid, among others regarding the investigation of tax fraud and evasion. Thus the exchange of information has greatly developed, clearly reducing the scope of the banking secrecy in many European countries.

Furthermore, at the time of communication and information, the notion of transparency has made a noticed entry into the order of juridical principles and does not cease to expand.

However Luxembourg has bravely resisted by increasing the obligation put upon the bankers. Indeed the finance place of Luxembourg remains attached to this principle, the outlines of which are nevertheless in constant evolution.

The study aims to firstly present the banking secrecy under its legal apect (I), then its main consequences in everyday life (II).

Article Date: 18th January 2010

Author: Lex Thielen