Banking secrecy: Who can access information about Ukrainians' accounts and why?

In Ukraine, banking secrecy is a crucial tool for protecting clients' financial data. However, not many Ukrainians are aware of how it works and whether the authorities plan to impose any restrictions on it in the future.

To learn more about what banking secrecy is and under what circumstances it may be disclosed, read the overview by journalist RBK-Ukraine Alik Sakhno.

Banking secrecy in Ukraine refers to confidential information about bank clients (both individuals and legal entities) and their financial transactions, which is protected by law. However, there are specific legislative circumstances under which it may be disclosed.

What is banking secrecy

The Independent Association of Banks of Ukraine (IABU) stated in a comment to RBK-Ukraine that the concept of banking secrecy, the requirements for its preservation, and the procedure for its disclosure are governed by the Law "On Banks and Banking Activities" and relevant regulatory acts of the National Bank of Ukraine. According to the law, information about the client's activities and financial status obtained by the bank during service is considered banking secrecy.

Lawyer Bohdan Yankiv, in a comment to RBK-Ukraine, notes that essentially, banking secrecy is a package of data that banks receive from clients during their operations. This includes, among other things, incoming and outgoing payments, various accompanying data such as personal tax numbers that you provide to the bank, contact details, and addresses.

The IABU adds that banks are obliged to ensure the confidentiality of banking secrecy and can only disclose it in specific cases clearly defined by law. Specifically:

• at the request or with the permission of the client;

• by court order;

• at the written request of a specific authority with appropriate powers (for example, the Tax Authority, the Antimonopoly Committee, law enforcement agencies, state and private bailiffs, notaries, etc.).

This means that access to information about clients' bank accounts is only possible in cases prescribed by law. As Bohdan Yankiv points out, without a court decision, no one can access your financial data.

"If your neighbor approaches your bank with questions about your accounts and funds, he will not receive such information. However, if you have outstanding monetary obligations and the court decides that the bank must provide information about your status, the financial institution will comply with that decision, which must clearly specify what information needs to be disclosed," – explained Dmitry Glinsky, acting executive director of the IABU, in a comment to RBK-Ukraine.

Yankiv clarifies that currently, the NBU or tax authorities can only be aware of the existence of accounts held by citizens but do not know the amounts or movement of funds in those accounts. At the same time, financial institutions have their own monitoring systems that can block accounts in cases of suspicious client activity, such as exceeding transfer limits without proper confirmations.

"For unlawful disclosure of banking secrecy, civil liability (compensation for damages and moral harm) and criminal liability (fines up to 3,000 non-taxable minimums, probation supervision, prohibition from holding certain positions) are provided. Additionally, if a bank violates the requirements for maintaining banking secrecy, it may face sanctions from the National Bank," – explained the Independent Association of Banks of Ukraine.

The IABU adds that besides banking secrecy, there is also the confidentiality of financial services and professional secrecy in capital markets and organized commodity markets. These are similar to banking secrecy, as they pertain to the protection of information about the client. The main difference is that such services can be offered by companies that are not banks.

Can banking secrecy be abolished in Ukraine

Lawyer Bohdan Yankiv explains that currently, the legislation on banking secrecy in Ukraine remains unchanged. However, certain bodies, such as tax authorities, law enforcement, and other government structures, have the right to directly request information containing banking secrecy from banks under conditions defined by law.

One of the most discussed cases recently was the launch of the state support program "Winter eSupport," which was introduced on December 1, 2024. At that time, several public figures stated that citizens allegedly consent to the disclosure of banking secrecy as part of this program,

Further "fueling the fire," one of the founders of Monobank, Oleg Gorokhovsky, claimed on December 4 last year that among all banks participating in the government program, only the state-owned PrivatBank discloses banking secrecy after opening a "National Cashback" card.

At the same time, the PR director of PrivatBank, Oleg Serga, noted in a comment to RBK-Ukraine that the program operates on equal terms for all banks participating in it. He added that these conditions are approved by government resolution and are mandatory for compliance.

"Banks offer clients special cards, the opening of which implies consent to the transfer of transaction data. This information is necessary for cashback calculation. The card is automatically added to the cashback system upon activation, but if the client does not consent to the data transfer, the transactions will not be counted, and cashback will not be awarded," – explained Serga.

According to him, the "National Cashback" cards operate under a standard procedure: when a client makes a purchase, for example, of milk, that transaction is recorded and sent for processing. Only after this is cashback awarded, that is, a discount provided after the completion of the purchase of goods or services.

In a comment to RBK-Ukraine, MP Yaroslav Zheleznyak stated that there are currently no programs or plans in Ukraine to restrict or completely abolish banking secrecy. However, the Independent Association of Banks of Ukraine notes that simplifying access to banking secrecy may be applied within the framework of the National Revenue Strategy approved by the Cabinet until 2030.

"It is planned to expand the powers of tax authorities to access information about the movement of funds in taxpayers' bank accounts. The details of these government plans are not yet known, and their implementation will require parliamentary approval of the relevant legislative changes," – commented the IABU to RBK-Ukraine.

Lawyer Bohdan Yankiv asserts that there is nothing fundamentally wrong with disclosing banking secrecy on a global scale, as this is a pan-European trend that Ukraine should adopt on its path to the European Union.

How banking secrecy functions in EU and US countries

Banking secrecy is a vital tool for protecting clients' personal information in many countries around the world. In the European Union and the United States, there are rules and regulations that define its application.

In EU countries, with the development of international initiatives to combat money laundering and terrorist financing, as well as initiatives to enhance transparency and tax cooperation, banking secrecy has been significantly weakened.

"In many Western countries, tax authorities have access to citizens' financial accounts through automated systems that analyze data. Each country has its specific rules and mechanisms for accessing such data; however, the principle remains unchanged: tax authorities can check how much money is in citizens' accounts to ensure proper compliance with tax obligations," – explains lawyer Bohdan Yankiv in a comment to RBK-Ukraine.

In particular, the European Union has a general data protection regulation that defines the rules and principles for processing personal data of EU citizens. Additionally, there are rules for automatic exchange of tax information among EU member states under the Common Reporting Standard (CRS). This means that if requested by tax authorities from another country, banks must provide the relevant information.

The US banking secrecy law, the Bank Secrecy Act (BSA), is one of the United States' tools aimed at combating financial crimes such as money laundering and terrorist financing. Under this legislative initiative, banks and other financial institutions must report all transactions that exceed $10,000. This includes both deposits and cash withdrawals.

Currently, even in countries with strong banking secrecy, there are restrictions, particularly in combating money laundering, terrorist financing, and tax evasion. Within the framework of international initiatives, such as CRS and FATCA, countries are taking measures to increase the transparency of financial transactions and cooperation with tax authorities from other countries.

Recall that earlier we wrote about which banks Ukrainians most frequently stored money in over the past year and how