Disclosure of banking secrecy: a new stage of control over citizens’ money
18 July 12:53
ANALYSIS
Banking secrecy is a major concern for the Ministry of Finance. The Ministry of Finance insists that the State Tax Service should have access to the financial transactions of Ukrainians by default – not by court order, as it is now. They want to see everything that your bank knows: full information about the client, their accounts, the movement of funds on them, and even the contents of bank safes. And all this is presented under a beautiful wrapper – the transition to a new European payment system, which allegedly requires access to Ukrainians’ accounts. But is this really the case – "Komersant Ukrainian" found out.
Bills No. 13233 and No. 13238 are being actively discussed in Ukraine, which provide for the creation of a register of bank accounts and individual safe deposit boxes. The State Tax Service, law enforcement agencies, financial monitoring, NAPC and ARMA will have access to this register.
According to First Deputy Finance Minister Denys Uliutin, the government is negotiating with the NBU to disclose bank secrecy, as enshrined in the National Revenue Strategy. Ulyutin admitted that this is a “difficult discussion” but that disclosure of banking secrecy is inevitable in the future.
The official said this during the discussion of the draft law on Ukraine’s accession to the Single Euro Payments Area (SEPA), which, among other things, as noted by MP Yaroslav Zheleznyak,
“creates a register of all bank accounts and safe deposit boxes of all citizens under the Tax Service.”
According to him, the relevant committee of the Rada has already recommended the draft law for adoption in the first reading.
Yaroslav Zheleznyak, Deputy Chairman of the Rada’s Tax Committee, expressed concern, emphasizing that the bill effectively creates a centralized register of accounts and safes of all citizens, which raises serious questions about the limits of bank secrecy and personal data protection. Although it is officially stated that the register will be closed and non-public, it will contain no information on the movement of funds or the contents of safes – only the name, bank and account number. However, the law provides a mechanism for a wide range of government agencies to access this data.
As a reminder, in early January 2025, Finance Minister Sergii Marchenko said that banking secrecy in Ukraine should be abolished because it “protects thieves and criminals.”
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But what does banking secrecy have to do with SEPA?
SEPA (Single Euro Payment Area) is a format for interstate bank transfers in euros. Its goal is to make international euro transfers as easy and cheap as domestic ones. SEPA includes all Eurozone countries, EU countries, and several other countries that support euro payments. According to EU regulations, transfers between accounts in different SEPA countries should not cost more than regular domestic transfers. But nowhere does it mention the abolition of banking secrecy or the transfer of data to tax authorities.
In fact, in Ukraine, under the guise of switching to SEPA, they want to give the tax authorities full access to all accounts and transactions of Ukrainians who do not yet have a crypto wallet. They haven’t gotten there yet. The bank will provide the tax authorities with information about opening and closing accounts, cash flow, and any financial actions. And all this without a court, without any grounds, lawyer Oleg Koval tells . And this has nothing to do with the fight against terrorism or crime.
“In Europe, where the SEPA system operates, banking secrecy is in place and protected by law. It can be disclosed only by court order and only in case of serious suspicions of serious crimes – as, by the way, in Ukraine now. But in Ukraine, they want to have access to any person’s accounts without any good reason. This is not about fighting crime, but about total control of everyone,”
– says the lawyer.
What will this mean for ordinary Ukrainians, according to economists?
- Tax audits will become commonplace.
- Corruption (bribery) will increase – tax officials will solve issues for money.
- Law enforcement officers will be able to falsify any case by having access to transactions and safes.
- Personal finances will cease to be personal – every penny received or transferred will have to be accounted for.
- Data leakage is possible, which can be easily exploited by fraudsters.
“We can conclude that under the guise of European integration, we will face economic dependence and control of every penny. This means there will be leverage. The more difficulties they create, the easier it will be to “solve” them for money. And it will be ordinary people, not oligarchs or criminals, who will suffer first, because they will be fine. We can forget about financial security,”
– the lawyer believes.
After a wave of criticism, the Ministry of Finance announced that it would either abolish or significantly weaken bank secrecy over the next three years. Currently, the tax authorities have access only to information about the accounts of individual entrepreneurs and legal entities.
Most economists believe that the current Verkhovna Rada will not risk abolishing banking secrecy, as it is an extremely unpopular decision. At the same time, quite a few unpopular decisions have been made and are being made recently, including in the financial sector. And as you know, “nothing can stop an idea whose time has come.”
Summary
Thus, under the guise of technical accession to the European payment system SEPA, the Ukrainian authorities are trying to radically change the system of financial control in the country. What is presented as a step towards European integration may in fact result in an unprecedented level of state interference in the private lives of citizens. While European countries preserve banking secrecy even within the framework of SEPA, the Ukrainian state wants to go the opposite way – towards total financial monitoring without judicial control.
The issue is not only the effectiveness of the fight against corruption and crime, but also the preservation of the basic principles of privacy and personal data protection, which are the foundation of a democratic society. No matter how pathetic it may sound, the final decision on the fate of banking secrecy in Ukraine will be an important indicator of where we are really heading – towards declared European values or totalitarian methods of control over people.
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Author: Alla Dunina
