NEW BANKING SECRECY LAW

Copyright : Mazen Khaddour 2002
Law Office of M. Khaddour & Associates
mnklaw@net.sy 

Passed at the same time as Law No. 28 of 2001 that allowed the foundation of private banks which ended the state’s 38-year monopoly in the banking sector and legalized privately-owned financial institutions and allowed foreign individuals and companies to own up to 49% of the new institutions, was Law No. 29 of 2001 enforcing banking secrecy rules.

Law No. 29 was intended both to encourage Syrian nationals to return their funds to the local market and also to prompt regional and international investors to look afresh at opportunities in Syria.

This law was long awaited so that Syria could at least begin to match banking conditions in neighboring countries such as Lebanon, which has long offered secure private banking and holds a large volume of deposits from Syrian nationals.

Pursuant to article (1) of the new law, all banks operating in the Syrian Arab Republic are subject to the rules of profession secrecy.

Article (2)

stipulates that banks are allowed to open numbered deposits accounts whose holders’ names are known only by the bank manager or the person officially handling the bank’s manager job. These banks are also allowed to hire out special metal safes to depositors.

The identity of the holder of such accounts or such safes could only be released upon his own written approval or a written approval by his legal inheritors or legatees or when he conformingly declares bankruptcy or, in case there is a lawsuit concerning a banking deal between the banks and their clients, upon a request from the party judging the suit.

The employees working for the banks referred to in article (2) of this law and all other persons who are, due to their titles or jobs or any other reason, aware of the records of the notebooks, registers, communications, dealings and investment bills, are obliged, in the interest of the bank and the clients, to maintain the utmost secrecy of these records.

The employees are not allowed, under any circumstance to disclose or reveal any information about the clients names, identities, deposits or anything relating to their deposits and bank dealings, to any person either an individual or an administrative or judiciary party except in the situations referred to in article (2) of this law.

It is permissible, in all cases of deposits, to make a previous written authorization in the presence of the bank administration, giving the permission referred to in articles (2) of this law regarding providing information on clients deposits. Such permission can only be retracted by the consent of all parties and in the very same way of attestation.

Contrary to all regulations in force, seizure and sequestration of monies and assets deposited at the banks can be put into effect only upon a written approval by their owners or when there are final and binding judiciary sentences implying liabilities against depositors for the benefit of public or private parties.

In order to guarantee the investments of their money, banks are allowed to exchange, restrictively among each other and under complete secrecy, information concerning the depositors debit accounts.

The depositor’s legal inheritors or legatees, and upon the permission of a specialized judge, can obtain information regarding the amounts of the depositors assets and deposits in order to consider them in the legacy accounts. The specialized judge must be informed about the amounts of these deposits in an officially written letter from the bank’s administration.

Violations of the terms of this law will lead to a punishment of three months up to one-year imprisonment. The attempt shall be subject to the same punishment. The public right lawsuit will only be set in motion upon a complaint by the wronged party.

Copyright © Mazen Khaddour 2002 

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