Customer Privacy Protection And Limitations Under Bank’s Anti-Money Laundering System

As bank is the subject of private law, the customer privacy protection is a kind of legal liability based on contractual relationship between bank and customer. The relationship between bank and customer belongs to the category of private law, focusing on the legal protection to customer privacy provided by bank. The anti-money laundering considers more about the maintenance of social interest and financial security, entrusts public duties to bank, and takes obligations of public law. As we all know, private law is to safeguard individual rights, while public law pays more attention to social security and order. Will bank violate customer privacy in the implementation of anti-money laundering system? Can bank both effectively fight against money laundering and fully protect the privacy of concerning subject? Proceeding from protection and limitation systems of customer privacy in Chinese anti-money laundering system, the paper first launched a detailed analysis on their current situation and existing problems, and got the desirable answer to the first question; and then based on the conflicts between the bank’s obligation of anti-money laundering and its liability of privacy protection, the author put forward the approaches to balance them and related principles; finally, the paper raised the workable strategies and suggestions for the second question.In addition to the introduction and conclusion, the paper includes four parts:The first part mainly described the provisions on customer privacy protection in Chinese anti-money laundering system, and discussed the dilemmas in current anti-money laundering system, such as incomprehensive scope of confidentiality, subjects of tort liability and approaches of remedy.In the second part, the author elaborated the limitations on customer privacy protection in Chinese anti-money laundering system and analyzed the plight encountered by current anti-money laundering system, for example, the rules are unbalanced, the standards of transaction reports are far from objective, and disclaimer is too vague.Based on the realistic analysis on customer privacy protection and limitations under bank’s anti-money laundering system, the author drew the conclusion that there are conflicts between the bank’s obligation of anti-money laundering and its liability of privacy protection in the third part. Next, from the bank’s point of view, the third part expounded the legal property of obligation of anti-money laundering and legal responsibility of customer privacy protection, and explained that they have a balanced basis on the common goal of maintaining financial order. Finally, the author discussed the principles to balance the conflicts, namely, the principle of justice and fairness, power-restricting principle, as well as the balancing principle of security and interest. The approach to realize the balanced state is to give the relative rights of independent business entity to the bank. In terms of value orientation in the establishment of customer privacy protection system, customer privacy protection is always primary and the exception is the secondary. Bank will fulfill its anti-money laundering obligation for four specifics (specific subject, specific way, specific process, and specific procedure).The fourth part mainly involves the specific institutional arrangements concerning customer privacy protection under bank’s anti-money laundering system. On customer privacy protection system, bank should clarify its liabilities on customer privacy protection; fully stipulate the exceptions of customer privacy protection; make clear the bank’s rights to protect customer privacy; establish diversified privacy protection mechanisms; and improve management information technological capability. As for bank’s anti-money laundering system, the criteria to identify objective transaction reporting system should be set up; goodwill reporting disclaimer system ought to be improved; the internal management system of the bank needs to perfecting; and the national shouldering and benefit motivation mechanisms are required to establish in anti-money laundering system.