Responding to Challenges to a Bank's Duty of Confidentiality in Offshore Finance Centres: The Vanuatu Example

Banking and Finance Law Review, 28 2: 249-268

Posted: 19 Jun 2015

See all articles by Jennifer C. Corrin

Jennifer C. Corrin

The University of Queensland, Centre for Public, International and Comparative Law, TC Beirne School of Law

Date Written: 2013

Abstract

Under the common law, a duty of confidentiality arises from the express or implied terms of the banker-customer relationship. However, banks in offshore financial centres are facing increasing demands from government authorities, such as tax offices, investigating tax evasion; and police, investigating offences such as money laundering, to disclose account information. In some cases, these demands have come from overseas authorities. Whether the demand comes for a domestic or foreign authority, these demands pose a threat to “the inviolability of secrecy and confidentiality”. This paper examines this problem in the context of Vanuatu, a tax haven in the South West Pacific. The paper commences with some brief background on Vanuatu and then gives an explanation of the sources of law in Vanuatu, which constitute a complex mixture of common law, civil law and indigenous law (known locally as “Customary Law” or “Kastom”). It then sets out the current legal position in Vanuatu regarding a banker’s duty of confidentiality, including a discussion of relevant legislation. The paper explores the exceptions to the duty and analyses the approach of the courts in Vanuatu, with reference to decisions in other common law countries, including England and Wales and Australia. It goes on to discuss the competing arguments for and against compulsory disclosure and considers whether the Vanuatu regime offers any solutions for other small islands states.

JEL Classification: k00

Suggested Citation

Corrin, Jennifer C., Responding to Challenges to a Bank's Duty of Confidentiality in Offshore Finance Centres: The Vanuatu Example (2013). Banking and Finance Law Review, 28 2: 249-268, Available at SSRN: https://ssrn.com/abstract=2620128

Jennifer C. Corrin (Contact Author)

The University of Queensland, Centre for Public, International and Comparative Law, TC Beirne School of Law ( email )

The University of Queensland
St Lucia
4072 Brisbane, Queensland 4072
Australia
07 33652295 (Phone)

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