Money and taxes

Among financial topics, several tax-related issues as well as problems related to anti-money laundering measures came to the attention of the Chancellor of Justice during the reporting year. The Chancellor was also asked to assess the constitutionality of § 124 of the Bankruptcy Act and disclosure and preservation of banking secrecy. 

Due to the tense situation of the state budget, ways are being sought to increase the revenue of the state as well as rural municipalities and cities, including through property taxes. Taxation of land will also be significantly changed to give cities and rural municipalities more power to decide on exemption of land under a person’s home and on the increase in land tax. 

The Riigikogu passed the much-disputed Motor Vehicle Tax Act, which in the main part should enter into force on 1 January 2025. 

Land tax and land valuation

Land tax is a national tax, but specifying some tax elements is delegated by law to rural municipalities and cities. The city or rural municipal council establishes the land tax rates for the particular local authority within the maximum and minimum rates prescribed by law. 

Under § 5(1) of the Land Tax Act, until 1 July in the year preceding the taxation year a municipal council is empowered to establish the tax rates for the following year. Several local authorities were late in deciding changes in land tax rates, i.e. the decisions were made after 1 July. In most cases, late decisions by municipalities were due to a faulty land tax calculator developed by the state, which resulted in tax receipts turning out to be lower than predicted. When the error was found, municipalities began to amend their regulations and increase tax rates, though with some delay. 

The Chancellor made a proposal to Alutaguse rural municipality, Anija rural municipality, Kohtla-Järve city, Raasiku rural municipality, Rakvere rural municipality and Setomaa rural municipality to bring their regulations into conformity with the Act and the Constitution. The rural municipalities and the city that received the letter took the Chancellor’s proposal into consideration and repealed the relevant regulations. Based on available information, one million euros has been allocated from the Government of the Republic’s reserve fund to local authorities to compensate for the decrease in land tax receipts (compared to receipts in 2023).

Methodology for mass valuation of land 

In the course of mass valuation of land, the state calculated simultaneously the value of about 760 000 cadastral units. That is, a mass appraisal was carried out. The approximate value of land at market prices was determined using machine-readable data and taking into account the factors that most influence the value of land. Of course, the results of a mass valuation are less accurate than the results of individual valuations, and quite a few aspects that people considered to be important factors affecting the value of land were not taken into account in mass valuation. As a result, the Chancellor of Justice was also asked for clarifications on land valuation.

One question concerned taking into account the proximity of the state border when valuing land. A landowner found that boundary water bodies had been taken into account as a factor increasing the value of land, but no restrictions on use of land due to the state border had been considered. 

The Chancellor found no reason to consider this land valuation methodology unconstitutional. Although the proximity of the state border is not taken into account as a valuation factor, this may affect land purchase and sale transactions, and these transactions are taken into account according to the construction land valuation model. Specifically, the proximity of the border may affect estimates by parties to transactions about the value of land. Since land has been valued on the basis of purchase transactions for land in the vicinity of the plot, through this the proximity of the state border and other aspects characteristic of this location and affecting land value are reflected in the value of land. The water body proximity factor reflects the natural background and diversity and is not related to whether or not the property has access to the water body.

Mass valuation does not enable an objective appraisal of how price is affected by the view of or access to a water body. Also, mass valuation of land does not attach any significance to whether the nearby water body can be used. For this reason, border area restrictions or inconvenience due to the proximity of the border are not relevant in applying the water body factor.

The Land Board explained that land valuation in 2022 failed to fully analyse how the security situation affects the value of land. As the security situation has changed in recent years, it may have taken some time for the impact in transaction prices to materialise. Therefore, analysis of the impact of the eastern border may be important for the next mass valuation of land, which will take place in 2026.

The Chancellor of Justice was also asked to assess the inclusion of various factors affecting the value of land in the valuation model and whether the valuation factors developed as a result of analysis of transactions and during expert assessment can be laid down in a ministerial regulation. The minister’s regulation covered which areas and how building rights are taken into account in valuation of land. 

The Chancellor found that the minister has a wide margin of discretion when choosing a land valuation methodology, though these choices may not be arbitrary. There is no reason to believe that the choice of methodology was arbitrary. As part of the valuation models, the value factors obtained as a result of an analysis may also be used. 

Petitioners also wanted to know whether it was constitutional to use an adjustment factor reducing the taxable value for larger parcels. According to explanations by the Land Board, the surface area of a parcel affects the market price of the parcel in different ways: it depends on the location and use of the parcel. For construction land, the rule is that the larger the area of the cadastral unit, the lower the unit price of land. In the case of agricultural land, the relationship is the opposite: the larger the area of the cadastral unit, the higher the unit price. 

When developing land valuation methodology, transaction data were analysed and it was found that the size of a unit of construction land up to 1000 m² does not significantly affect the value of the cadastral unit, but beginning from an area exceeding 1000 m² the unit value of land decreases. This means that mass valuation of land takes into account that value based on the area of land begins to decrease as from 1000 m². 

The Chancellor found that introduction of an adjustment factor due to parcel size and choice of the area limit (1000 m²) from which the adjustment factor will be applied had been plausibly justified and no grounds exist to consider use of the adjustment factor unconstitutional.

The Chancellor of Justice was also asked to explain the increase in tax if the land tax increase restriction is applied to joint owners of land.

Amendments to the Land Tax Act

Restrictions on exemption of land under a person’s home and the increase in land tax were amended in the Land Tax Act.

The Chancellor of Justice sent an opinion on this to the minister. On the basis of the Chancellor’s comments, amendments were also made to the Draft Act and the explanatory memorandum. As rural municipalities and cities will obtain extensive decision-making power in establishing a tax incentive for land under a person’s home, it can be assumed that this will raise many questions, to which answers will also be sought from the Chancellor of Justice.

Motor Vehicle Tax Act

On 12 June, the Riigikogu passed the Motor Vehicle Tax Act. The Chancellor of Justice also expressed her views on the Draft Act, expressing concern about how motor vehicle tax might affect the life of people with disabilities. The Motor Vehicle Tax Act provided a tax exemption for vehicles specially adapted or rebuilt for people with disabilities, but not for all vehicles used for transport of disabled people.

The President of the Republic refused to promulgate the Motor Vehicle Tax Act, citing unequal treatment of people with disabilities. 

The Riigikogu amended the Act and adopted it on 29 July. 

According to the amendments, vehicles rebuilt or adapted for people with disabilities will not be granted the previously planned exemption. However, the same law introduced amendments to the Social Benefits for People with Disabilities Act, increasing some of the monthly benefits for people with disabilities and offering a one-off allowance to mitigate the impact of motor vehicle tax. In addition, amendments were introduced to the Social Welfare Act which will facilitate provision of necessary assistive devices and reduce the own contribution paid for them.

Other tax issues

Restriction on sale of products with old revenue stamps

The Chancellor of Justice was asked to assess the constitutionality of § 28(4¹) of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act. This provision states as follows. “If a new design of revenue stamps is established simultaneously with a new higher excise duty rate, the excise goods revenue stamped with the previously valid revenue stamps and released for consumption before entry into force of the new excise duty rate may neither be sold nor stored outside an excise warehouse after the expiry of three calendar months as of the date on which revenue stamps with the new design enter into force.”

So, under § 28(4¹) of the Act, products bearing old revenue stamps may still be sold within three months of the increase in tax. According to § 85²¹ of the Act, the restriction does not apply to changes in the excise duty rate on cigars and cigarillos in 2024, or if the excise duty paid on cigars and cigarillos does not increase due to an increase in the minimum tax rate. Under § 85²¹ of the Act, the restriction is not applied to cigars and cigarillos when the rate of excise duty is changed in 2024 and so long as the amount of excise duty paid on cigars and cigarillos does not increase due to an increase in the minimum amount of excise duty. 

Cigars and cigarillos with revenue stamps valid before 1 January 2024 can be sold throughout 2024. No such distinction was stipulated for tax increases that will enter into force in 2025 and 2026. 

The Chancellor found that companies have been given sufficient time to adapt to the tax increases that will come into force in 2025 and 2026. The provision to prevent products from being stockpiled in advance while the lower rate of excise duty is in force and thus avoiding payment of higher excise duty is constitutional. If tobacco products with revenue stamps corresponding to the previously applicable tax rate could be sold without restrictions even after the 2025 and 2026 tax increases, companies would be able to stock up in advance on larger quantities of products with lower tax rates and essentially postpone the tax increase.

Taxation of compensation for non-pecuniary damage

The Chancellor of Justice has previously drawn the attention of the Minister of Finance to the restriction laid down by § 12(3) of the Income Tax Act. According to the restriction, compensation for non-pecuniary damage is not considered to be income of a natural person if compensation for non-pecuniary damage is paid by the state or a local authority or if it has been awarded by a court. 

When interpreting § 12(3) of the Income Tax Act, the tax authority has taken the view that compensation for non-pecuniary damage paid out of court must be taxed. This is also the case if compensation for non-pecuniary damage has been awarded or the corresponding agreement has been approved by an extra-judicial conciliation or procedural body. The Riigikogu is currently processing amendments to the Income Tax Act (434 SE), which lay down that compensation for non-pecuniary damage awarded or approved by a body established for extra-judicial settlement of disputes is also not income. 

Since the law does not clearly lay down compensation for non-pecuniary damage as an object of taxation and this payment does not, by its very nature, correspond to the concept of income, it remains debatable whether or not compensation for non-pecuniary damage paid by agreement between the parties is to be regarded as income. The Chancellor drew the attention of the Ministry of Finance to the fact that the definition of compensation for non-pecuniary damage should be based on substantive criteria rather than on which procedural body approves an award. 

The nature of the problem is further illustrated by an example of recent conciliation proceedings conducted by the Chancellor of Justice. According to the interpretation of the Tax and Customs Board, compensation for non-pecuniary damage paid on the basis of an agreement approved by the Chancellor of Justice should also be taxed. If the compensation had been awarded by a court, no tax would have to be paid on the compensation. If the Riigikogu adopts the amendments to the law as planned, the recipient of compensation can claim a refund of the amount of tax on the basis of their income tax return.

Assessment of a company’s tax behaviour

The Chancellor was asked to assess the lawfulness of the tax behaviour assessment service offered by the Tax and Customs Board. The computer application of the assessment of tax behaviour is regulated by § 34¹ of the Government of the Republic Regulation of 7 March 2019 on “Statutes of the register of taxable persons” (last amended on 21 December 2023). Assessments of a company’s tax behaviour are fairly general risk assessments, in which tax behaviour is assessed on a scale of 1 to 3 (1 – significant deficiencies, 2 – some deficiencies, 3 – everything in order) on the basis of twelve indicators. 

By using the tax behaviour assessment service, a company can find out what information the state has collected about their tax behaviour and what conclusions it has drawn from it. Since initial assessments of risk behaviour are based on the statistical average of some indicators, there may inevitably be a need to improve the assessment in cooperation with the company. Thus, the final assessment of tax behaviour is often prepared in cooperation with the undertaking, taking into account additional information received from it.

A company can access data collected about it (in this case, a risk assessment) and, if they wish, send this data to other companies. Consequently, it is up to the company to choose whether or not it wishes to disclose the assessment of its tax behaviour.

Consent to disclosure of the assessment can be withdrawn at any time.

Based on the facts set out in the petition, the Chancellor of Justice did not find any violation.

Setting hourly rates for food and veterinary supervision

The Chancellor of Justice was asked to check whether the hourly rate charged for food, feed and veterinary supervision established by a regulation of the Minister of Regional Affairs complied with the Constitution. 

The Chancellor found that the hourly rates may be set by the minister, as the conditions for setting the fee are laid down in sufficient detail in Regulation (EU) 2017/625 of the European Parliament and of the Council (hereinafter ‘the EU regulation’) and in law. 

However, it turned out that the hourly rates for food and veterinary supervision laid down in the regulation were established on unclear grounds. The hourly rate must be calculated on the basis of the actual costs of supervision in the calendar year preceding a specific supervisory activity and, under the EU regulation, the costs of that supervision and the cost-based calculation must be made public. 

Disclosure of underlying costs and of calculation of supervisory fees is essential to ensure that supervisory fees are set for manufacturers transparently and predictably. If the regulation does not set the rates on the basis of the calculation procedure laid down in the EU regulation and law, the regulation is incompatible with § 3(1) and § 94(2) of the Constitution. Compliance with the system of supervisory fees established by the EU regulation, as well as disclosure of the costs of supervisory authorities, is important because it ensures, on the one hand, protection of human health through food safety and, on the other hand, fair competition between operators. 

The Chancellor of Justice asked for information related to supervisory fees to be organised so that information about supervisory fees is transparent and to ensure that the limits of the powers granted under § 49³(4) of the Food Act and § 87(5) of the Veterinary Act are taken into account when setting hourly rates for supervision.

The Minister of Regional Affairs promised to disclose information related to supervisory fees on the agencies’ websites. This information can be found on the website of the Agriculture and Food Board, which deals with fees and state fees. In addition, the Minister of Regional Affairs is considering drawing up guidelines for calculating the hourly rate, so that it is unequivocally clear on what calculation and figures the established hourly rates are based. In the opinion of the minister, the established fees comply with the provisions of the Food Act, the Veterinary Activities Organisation Act and the EU Regulation.

Availability of basic payment services

Prevention of money laundering and terrorist financing is indisputably an important national objective that can also be achieved by limiting people’s fundamental rights, such as restricting access to basic payment services. However, people need a bank account in order to cope on a daily basis, regardless of how their activities are legally evaluated. Thus, the state must find a way to protect the economic environment in Estonia, but also, on the other hand, to guarantee the fundamental rights of people.

Consequences of not having a bank account

The Chancellor has received several petitions revealing that a bank has refused to open a bank account for a person or has closed their account. By doing so, the bank restricts a person’s access to basic payment services (internet bank, card payments and ATM). 

Most likely, these decisions have been made by banks in accordance with the requirements established by the Money Laundering and Terrorist Financing Prevention Act (MLTFPA), which do not allow credit institutions to provide a service under certain conditions or oblige them to stop providing the service. Banks also do not accept cash payments from people without a bank account, as these transactions are also subject to MLTFPA requirements.

The Chancellor of Justice has previously drawn the attention of both the Ministry of Finance and the Riigikogu Finance Committee to these problems and analysed these issues from the point of view of natural and legal persons.

The Chancellor reached the opinion that, in terms of an abstract assessment, provisions which give banks the right to terminate contracts (and close payment accounts) with legal persons that are reasonably suspected of money laundering or terrorist financing cannot be regarded as disproportionate and unconstitutional. 

However, in the case of natural persons, it must be taken into account that the absence of a bank account will hamper a person’s daily activities. In that case, the person will also not be able to defend their rights through the court, because, in order to have recourse to the court, they must pay a state fee. Section 9(3) of the State Fees Act allows accepting cash payments only in the amount of up to 10 euros. 

An example is a situation where a person’s bank accounts were closed because the bank had to comply with the requirements set by the MLTFPA, and at the same time the employer refused to pay the person’s wages in cash. As a result, the person could not fulfil their obligations (pay utility bills) or perform everyday activities (§§ 19, 32 of the Constitution). 

Depriving a person of access to all basic payment services can lead to their social and economic exclusion, even if it is legally possible to require acceptance of cash payments. 

The Chancellor investigated how local authorities have organised payment of kindergarten fees. It was found that some local authorities accept the kindergarten fee in both cash and by bank transfer, but there are also those who accept the fee only by bank transfer. This restricts a child’s right to preschool education (§§ 37 and 12 Constitution; Supreme Court Constitutional Review Chamber judgment of 6 February 2023, case No 5-22-10/17, para 48), as well as the right to property (§ 32 Constitution), because interest accrues in the event of a delay in payment. 

It should also be taken into account that refusing to open a bank account for a person or closing an account may not necessarily contribute to prevention of money laundering, as the person may then use cash, a front person, or some other means of payment to carry out transactions, which may not reduce the risk of money laundering (cf. Supreme Court Administrative Law Chamber judgment of 12 June 2002, case No 3-4-1-6-02). Only the risk of money laundering and terrorist financing through a bank account is reduced.

Proposal to bring the law into line with the Constitution 

Under § 15 of the Constitution of the Republic of Estonia, everyone has the right of recourse to the courts in case of violation of their rights and freedoms. Section 14 states that the guarantee of rights and freedoms is the duty of the legislature, executive and judiciary, and of municipalities.

If a person does not have a bank account, they can also not go to court to protect their rights, since the State Fees Act does not allow payment of a state fee of more than 10 euros in cash. Thus, the Money Laundering and Terrorist Financing Prevention Act, the Credit Institutions Act, the Law of Obligations Act and § 9(3) of the State Fees Act, in combination, restrict the fundamental right of access to the court. At the same time, available measures allow the same objectives to be achieved, but limit the fundamental right of access to court to a lesser extent than the requirements currently in force. 

On this basis, the Chancellor of Justice reached the conclusion that the Money Laundering and Terrorist Financing Prevention Act, the Credit Institutions Act, the Law of Obligations Act (i.e. the provisions regulating the basic payment service agreement) and § 9(3) of the State Fees Act, in combination, contravene §§ 14 and 15 of the Constitution, and proposed to the Riigikogu to bring these laws into line with the Constitution.

In her proposal, the Chancellor asked to take into account that, in addition to the fundamental right of access to a court, the exercise of other fundamental rights, which presumably require payment of a state fee through a bank account, is also restricted. A state fee must be paid, for example, for issuing a motor vehicle driving licence (§ 19 Constitution), registering a marriage (§ 27 Constitution), applying for recognition of professional qualifications (§ 31 Constitution), making an entry of ownership in the land register (§ 32 Constitution) and issuing an identity document (§ 35 Constitution). 

At the session of 13 May 2024, the Riigikogu supported the Chancellor’s proposal and, under § 152 of the Riigikogu Rules of Procedure and Internal Rules Act, the President of the Riigikogu instructed the Finance Committee to initiate a Draft Act to bring the Money Laundering and Terrorist Financing Prevention Act, the Credit Institutions Act, the Law of Obligations Act and the State Fees Act into conformity with the Constitution.

In June 2024, the Ministry of Finance sent a Draft Act amending the Law of Obligations Act and related Acts to the Chancellor of Justice for an opinion. Following the Chancellor’s proposal, the Draft Act amended § 9(3) of the State Fees Act, which previously read as follows: “At the request of the payer of a state fee, the body charging the state fee is required to accept a state fee of up to 10 euros in cash”. The proposed change was that the words ‘at least’ were inserted into the provision regarding the amount that has to be accepted.

Unfortunately, we have to admit that the proposed amendment does not offer a legally clear resolution to the problem described by the Chancellor. In an opinion sent to the Minister of Finance, the Chancellor of Justice explained that it follows from the combination of §§ 15 and 14 of the Constitution that everyone must be able to pay the state fee required for recourse to the court in cash or through a bank account. Based on the amendments proposed in the Draft Act, it remains unclear whether and how the justified need to pay the state fee in cash will be assessed and what a person must do for this. It is therefore doubtful whether the amendment ensures a constitutional solution to the problem described by the Chancellor of Justice.

Financial Intelligence Unit licence proceedings 

Companies have contacted the Chancellor of Justice with concerns that the Financial Intelligence Unit (FIU) does not comply with the statutory procedural deadlines, so that proceedings for applications for activity licences become excessively prolonged. In addition, it has remained unclear to undertakings applying for an activity licence, on what basis the FIU assesses the reputation of the persons associated with them in activity licence proceedings. Applicants are dissatisfied because, instead of making a decision on the merits, the FIU asks them to withdraw their application.

In order to verify the lawfulness of the administrative activities of the Financial Intelligence Unit (FIU), in March the Chancellor’s advisers examined, on the spot at the FIU, the materials of proceedings which had been completed with regard to licence applications submitted to the FIU from January to June 2023. The advisers analysed the resolution of a total of 38 applications. 

In the course of inspection, the advisers analysed the resolution of licence applications on the basis of the Administrative Procedure Act, the General Part of the Economic Activities Code Act and the Money Laundering and Terrorist Financing Prevention Act. Formal compliance of an administrative act (as regards reasoning) with the requirements of the Administrative Procedure Act could not be assessed, since the sample of inspected files did not include any licence proceedings in which an administrative act on refusal had been issued. In addition, operation of the application of the register of economic activities in its test environment was examined.

In a summary of inspection of the FIU licence proceedings, the Chancellor of Justice pointed out what is appropriate in the current administrative proceedings, as well as what needs to be improved. She also made recommendations on how it would be reasonable to improve the situation. It is important that proceedings for an activity licence ensure equal and legitimate treatment of companies and natural persons associated with them, as well as provide an opportunity to defend their rights in the manner prescribed by the Constitution and the laws.

To conclude, it can be said that the letters sent by the FIU concerning remedying the deficiencies (§ 15 Administrative Procedure Act) were very thorough (especially deficiencies related to the rules of procedure; § 72(11) clause 3 Money Laundering and Terrorist Financing Prevention Act). Questionnaires prepared on business reputation were also thorough (§ 19(6) General Part of the Economic Activities Code Act, § 72 subs. (1) clause 11 and subs. (2) Money Laundering and Terrorist Financing Prevention Act). 

The FIU had asked several companies to come to the office (§ 17 Administrative Procedure Act). These summonses provided information relevant to administrative proceedings and informed individuals of their rights and duties (§ 36 Administrative Procedure Act). The Chancellor’s advisers also partially listened to a recording of a licence applicant’s interview with a board member. At the beginning of the interview, the person was properly advised of their rights and duties and they were enabled to communicate through an interpreter (§ 21 Administrative Procedure Act). 

The Chancellor cannot accept that the Financial Intelligence Unit does not take into account and does not comply with the deadline laid down by § 71(1) of the Money Laundering and Terrorist Financing Prevention Act. So long as the law has not been amended, the FIU must proceed from the currently applicable law: i.e. take into account and inform the applicant when the application meets all the requirements and when the 60-day deadline or an extended deadline of 120 days for making the final decision begins to run.

Retention of documents relevant to administrative proceedings by the FIU does not currently comply with § 19 of the Administrative Procedure Act, since no single system of files exists that would offer an overview of all the materials collected in a particular case (see the summary of inspection in Chapter II). The Chancellor of Justice recommended that the FIU establish internal procedures governing preparation and keeping of files and a single system of files for storage of documents essential to administrative proceedings. This would ensure that the head of the institution has an appropriate overview of the documents and that the internal control system is better supported.

Carrying out background checks on natural persons and providing an informal opinion to applicants does not comply with requirements. Unrecorded interviews without any minutes having been taken aimed at influencing an applicant to replace a contact person or shareholder are not in line with the principles of good administration and are not lawful. Such actions may lead to a situation where the FIU issues assessments of a natural person associated with an applicant, while the person is unaware of such an assessment and cannot express their opinion on it. As a result, that person is completely deprived of the right to know what steps have been taken in respect of them in administrative proceedings (§ 3(1) and (2), § 11(1) clauses 2 and 3 Administrative Procedure Act; §§ 10, 11 and 15 Constitution). In addition, they are not given the opportunity to be heard (§ 36 Administrative Procedure Act) and to defend their rights in court (§ 15 Constitution; summary of the inspection in Chapter III). 

The Chancellor recommended that the FIU draw up a procedure for background checks that would establish what information may be used for background checks, how that information should be stored, or how the information used should be referenced. Data protection requirements must definitely be taken into account in this regard. The Chancellor recommended that the Ministry of Finance assess whether the regulatory provisions on assessing a person’s reputation sufficiently ensure protection of the rights of persons whose reputation is assessed by the Financial Intelligence Unit. 

At present, no uniform practice exists based on which the FIU decides on the need to remedy deficiencies in an application for an activity licence, refusal to examine an application, and when a decision on the merits is made. This is also why it is not possible for an applicant to predict how long the proceedings of their application may take and what decision may be expected as a result of the proceedings (see the summary of inspection in Chapter IV). The Chancellor of Justice recommended that the Financial Intelligence Unit should better consider its procedural decisions while complying with the law.

Prevention of money laundering and terrorist financing is undoubtedly an important national objective. This is supported by transparent licence proceedings that respect fundamental rights, which in turn contributes to fair competition. The Chancellor’s recommendations also proceed from a balanced interaction between these objectives.

We would like to thank FIU officials for cooperation.

Disclosure and safeguarding of banking secrecy

The Chancellor of Justice checked whether § 124 of the Bankruptcy Act complies with the Constitution. A person contacting the Chancellor noted that, under this provision, the trustee in bankruptcy is granted the right to use the debtor’s current account, meaning that the trustee in bankruptcy has access to banking secrecy as well as data concerning the person’s private life covering a period of 30 years. 

The Chancellor found that § 124(1) of the Bankruptcy Act does not contravene the Constitution. The Bankruptcy Act does not allow a trustee in bankruptcy unlimited access to the banking secrecy of a natural person when managing the bankruptcy estate or when using the debtor’s current account. A credit institution can disclose a banking secret to a trustee in bankruptcy and grant the right to use the debtor’s current account only for performing the duties laid down by the Bankruptcy Act. A credit institution and a trustee in bankruptcy are obliged to maintain banking secrecy. If they fail to comply with this obligation, they are liable for it.