Banks banned from disclosing client information

Further, state management agencies and other individuals and organizations can only ask credit institutions and branches of foreign banks to provide such information within their jurisdiction, in accordance with the regulation, and must assume responsibility for their requirements, according to the decree.

Also, the new decree, effective November 1, allows clients and their legal representatives to request their personal banking information from local credit institutions and branches of foreign banks.

Earlier, many enterprises and experts had voiced their opposition to a regulation requiring commercial banks to provide tax agencies with clients’ information, such as the bank account status, the account number and balance, details of transactions through the account and tax codes.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said the regulation is inappropriate, as the Law on Credit Institutions only requires commercial banks in certain cases to supply the Supreme People’s Procuracy, the court and the police with such information.

A representative of the Vietnam Chamber of Commerce and Industry agreed that the regulation goes against prevailing regulations in the Law on Credit Institutions and the Law on the Prevention of Money Laundering, among other laws.

However, lawyer Chau Huy Quang, managing partner at Rajah and Tann LCT Lawyers, stated that commercial banks supplying tax agencies with customers’ bank account information is consistent with prevailing laws and international regulations.

Collaboration between tax agencies and commercial banks is necessary to control tax payments and reduce tax evasion, Quang said.