The protection of financial information is of particular importance, especially in political systems where governments are putting pressure on opposition and critics. In countries like Germany, Switzerland and large parts of Europe, there is a certain degree of legal certainty. However, the situation changes significantly as one gets closer to the political fringe zones of Europe.This is where the concern is growing that the increasing international exchange of information will soon benefit countries with dubious democratic legitimacy.
Transparency versus protection of the opposition
The central question is: Where do you draw the line between the necessary transparency and the protection of privacy? This problem is not only a relic from the National Socialist era, but is gaining in importance in the face of current political upheavals in countries such as Syria, Egypt and Tunisia. There, rulers have a great interest in the financing methodsto examine oppositional movements. Access to bank data could threaten the existence of opposition – from frozen accounts to personal threats such as kidnappings in other regions of the world.
Privacy as a shield for opposition figures
Oppositionists, critics of the regime and intellectuals often find protection in respect of their privacy – including in the banking sector. The more authoritarian a regime, the more serious the consequences are when financial transparency is enforced without regard to privacy. A prominent example is the Youssef Nada case, an Egyptian opposition representative whose assets andFreedom of movement was massively restricted due to suspicious terrorist lists – and without concrete evidence. Only after years and a judgment of the European Court of Human Rights was he awarded law and damages.
The risk of general data transfer and its consequences
The example shows that general data transfers to foreign authorities not only work against regimes, but often also against their opposition. A living opposition, however, is an important corrective for any government. In the current debate about banking secrecy and automatic exchange of information, such measures are therefore being demanded on states with the rule of lawto limit principles. But who ultimately decides which states are trustworthy? The recent past – such as the authoritarian drifting of Hungary – makes it clear that there is no absolute legal certainty in Europe either.
Who decides on trust and exclusion?
The discussion about access to sensitive financial data raises difficult questions: Who determines which state data is entrusted? Who determines when a government is no longer considered to be the rule of law and therefore access to financial information must be withdrawn? And what happens to data that have already been shared when political framework conditions change? These uncertainties showthat transnational transparency always entails risks, especially for the weaker ones in society.
Case study: the rule of law in the EU
A current example is the constitutional amendment in Hungary in 2013, in which the constitutional court was disempowered and civil rights were restricted. Even within the EU, there is no guarantee for permanent legal certainty. If a government moves away from the principles of the rule of law, the question arises as to when and how access to financial data will be restricted. alreadyData transmitted could continue to be abused – a risk that increases with increasing transparency.
Transparency: A double-edged sword
Although transparency is considered social progress, it should not be forgotten that it is primarily of use to the powerful and economically strong. Oppositional and minorities are the ones who suffer when sensitive data is passed on without sufficient protection. This insight has in many European countries to a critical stance on the thirst for data ofpolice, secret services and other authorities and appropriate protective mechanisms anchored in the constitutions.
Tax authorities in focus: New data protection actors
In view of the increasing role of tax authorities in international information exchange, it makes sense to view them critically as potential instruments of state power. Because information that once ends up with the tax authorities could hardly be protected from access by other state institutions – such as the secret services. The public awareness of theRisks of excessive transparency are growing, and it is time to intensively conduct the debate about data protection and privacy in this context.
