NEWS
PUBLICATION: The current state of banking secrecy challenged by the collection of evidence abroad
Noëlle Lenoir, attorney at law, partner in Noëlle Lenoir Avocats, provides an update on the production in court of banking data of French institutions in foreign legal proceedings.
After the publication of the decree of February 18 and the order of March 7, 2022 reinforcing the role of the Service de l'information stratégique et de la sécurité économiques (hereinafter “SISSE”) to ensure compliance with the law improperly referred to as the "blocking" statute (which should be called the "Evidence" law), French companies should now focus on applying it. This law is all the more useful as it refers to international legal assistance treaties, i.e. to procedures freely negotiated between States on the basis of fundamental principles of law.
In the case of private cross-border disputes, the main mutual assistance treaty is the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters, which has been ratified by some sixty States, including the United States and France. Thus, a French company faced with a discovery or pre-trial discovery request is in a position to recall the principles of this Convention during negotiations on the scope of evidence with the opposing party: on the one hand, the transmission of evidence stops at the moment when the sovereignty of the State to which the requested company belongs is at stake; on the other hand, the transmission of evidence must be limited to what is necessary for the dispute. These principles make it possible to reduce the scope of discovery or pre-trial discovery requests, which in the digital age have reached unprecedented proportions, often involving thousands or even millions of documents.
In this context, the intervention of the SISSE provided for by the above-mentioned decree and order will facilitate the application of Article 1 of the "Evidence" law, which prohibits the disclosure of information whose disclosure would harm France's higher interests, its sovereignty and its essential economic interests. The AFEP/MEDEF Guide, drawn up in consultation with the Ministry of the Economy and Finance (see the latter's website), sets out criteria for identifying such data.
Three questions arise specifically for the banking sector:
- Since the Guide does not refer to financial services, but primarily to activities covered by Article L.151-3 of the Monetary and Financial Code (CMF), can bank secrets be ranked among the sensitive data to be identified with the help of SISSE?
- Can banking secrecy be invoked independently?
- Can large French banking groups with a global presence disclose banking secrets of the entire group, parent and subsidiaries?
Firstly, SISSE may have to advise a bank on the criteria for identifying sensitive data whose disclosure would harm France's interests. Among the companies in possession of sensitive data affecting France's interests, the Guide cites those that contribute "to the economic or strategic power" of the country and "to national policies for economic recovery and resilience".
Secondly, banks are entitled to invoke banking secrecy, which must be respected in addition to the "Evidence" law. With respect to the production of bank data in court, the French judge weighs the interests of the plaintiffs in obtaining this data against the protection of the security and proper functioning of the French banking system. The production of documents is only justified if they are "essential to prove the bank's liability" or "directly concern" the plaintiff; criteria to be used in discovery or pre-trial discovery.
Thirdly, a group does not in principle have access to the banking secrets held by its subsidiaries. The circulation of data covered by intra-group banking secrecy, under the terms of article L.511-33 CMF, is only provided for the needs of consolidated supervision in the context of the fight against money laundering and the financing of terrorism or in the event of suspected fraud, as confirmed by the Financial Action Task Force (FATF).
See the full article in French on the website of Le Monde du Droit.
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