This Article reviews the evolution of bank secrecy laws and comments on the erosion of rights effected by the domestic and international efforts to curb drug trafficking and money laundering. Part II reviews the evolution of bank secrecy laws in the international sphere and views the origins of the individuals' right to financial privacy. Specifically, Part II focuses on the laws of Switzerland and England to show the bases and proliferation of secrecy protections. Part III provides the background of the status of financial privacy in the United States. The following two parts describe initiatives aimed at eliminating drug trafficking and related money laundering. Part IV presents United States' domestic legislative actions, enforcement efforts, and international initiatives by way of bilateral agreements. Part V discusses both foreign domestic and international efforts.
Part VI presents a hypothetical case study in an effort to show that the pendulum has swung too far in eroding individuals' right of privacy, thus trammeling on the rights of innocent individuals. The hypothetical considers the effects of United States' civil forfeiture provisions - provisions becoming increasingly common in international laws - which give the government broad powers to seize any property that is "traceable proceeds." These provisions also shackle the individual owner of seized property by shifting to that owner the burden of proving that the property was not illegally obtained instead of requiring the government to establish the owner's wrongdoing or culpability. The hypothetical case also shows the dangerous effects of the trend to prove wrongfulness of conduct based on indicia, rather than on actual proof of wrongdoing.
This author concludes that matters have come full circle: from near total bank secrecy and privacy protection to virtual full disclosure. While these latter requirements have been instituted pursuant to well-intended domestic laws and international agreements aimed at the eradication of drug trafficking and money laundering, these efforts have gone too far and have resulted in the curtailment of individuals' privacy rights. Consequently, this author proposes as an alternative, a more balanced approach that can achieve the goal of curbing the nefarious conduct without trammeling individual privacy rights.
Berta Esperanza Hernández, RIP to IRP - Money Laundering and Drug Trafficking Controls Score a Knockout Victory over Bank Secrecy, 18 N.C. J. Int'l L. & Com. Reg. 235 (1993)