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Legal source: BNU shouldn’t share banking information with Portuguese bank

Request of information by Caixa Geral de Depósitos (CGD) in Portugal could be a “smart move” by the Portugal Tax Authority to obtain banking information on assets held by Portuguese nationals in Macau.

Banco Nacional Ultramarino (BNU) shouldn’t share clients’ data information with Caixa Geral de Depósitos (CGD) in Portugal since that data could be used by the Portugal Tax Authority, an anonymous legal source told Business Daily. In recent months, BNU clients have received a letter requesting an update of personal data and their authorisation for this data to be shared with Portuguese bank CGD. The request raised concerns that the data could be shared with the Tax Authority of Portugal for effects of tax requests and in the same letter – defined as a ‘Know Your Client’ (KYC) letter – clients were informed that refusal to authorise the data sharing would be cause for termination of their banking services, Business Daily has reported. CGD is a shareholder of Banco Nacional Ultramarino, S.A but a legal source told Business Daily that as a separate jurisdiction entity BNU has no need to share individual client banking statements with the Portuguese bank. “There is no reason to share banking information of BNU clients with the CGD, because since Macau’s handover to China the BNU isn’t a financial branch of the Portuguese bank. CGD as a Portuguese bank is under the jurisdiction of the Portugal Government but it’s not true individual accounts in Macau have to be shared since BNU is a completely separate entity, under the jurisdiction of the Monetary Authority of Macao (AMCM),” the legal source told Business Daily. In a statement to the newspaper, BNU promised the information wouldn’t be shared with the Tax Authority of Portugal and that discontinuing progressively the commercial relationship due to refusal is ‘legal’, while the Monetary Authority of Macau considers KYC letters are part of the ‘prevention and suppression of money laundering and terrorist financing crimes’. Bing Shui, an associate professor from the Faculty of Law at the University of Macau. told Business Daily that according to the Personal Data Protection Act (Act 8/2005) and Guidelines on Merchants’ Processing of Identification Documents of Payment Cardholders the data collected by BNU ‘can only be used against money laundering and financing terrorism’ [and] ‘thus the bank does not have the right to transfer the data to a third party, including the Portuguese Tax Authorities,” Shui told Business Daily. Smart loophole Macau has committed to joining the Common Reporting Standard (CRS), an agreement developed within the Organisation for Economic Co-operation and Development (OECD) to automatically exchange information starting in September of 2017, according to the OECD website, but currently the exchange of information can only be carried out on request by other jurisdictions. “In the current agreements, banking data sharing between the fiscal authorities in Macau and Portugal is already authorised, but it’s a complex process and implies a request by the Portuguese Tax Authority to the Chief Executive in Macau,” the legal source stated. In a statement to Business Daily, BNU has said that ‘as approved by the Personal Data Protection Office of Macau, subject to the consent from customers, the transfer of information from BNU to CGD can only be used for the purpose of consolidated banking supervision’ and that this bank sharing wasn’t related to the CRS. Last month, the Portuguese Government approved a European directive which effectively mandates the financial sector in Portugal to provide information about their clients to the Portuguese Tax Authority, in order to better detect irregularities in income declarations and detect undeclared assets in other countries, according to Portuguese newspaper Journal de Negocios, which could mean data sent to CGD would have to be shared with the Portuguese Tax Authority. Macau hasn’t yet made an agreement with the European Union for financial information sharing but Business Daily’s legal source has stated it “has no doubt that information sent will be used by the Portugal Tax Authority,” and that this was a “smart move” by the institution to go over some limits on data sharing regarding Portuguese nationals with assets in Macau “I think this a smart move by the Portuguese Government to go over the fact that Macau, Hong Kong and Singapore haven’t agreed yet with the new European directive which mandates banking data be exchanged in relation to any European Union citizens. For years, Portuguese authorities have tried to expand that agreement to these three territories, who have refused. I think it’s way by the Portugal Tax Authority to get information on assets Portuguese nationals have in Macau in order to take advantage of the territory’s low tax,” the legal source told Business Daily.