According to the Romanian Civil Code, the obligation of confidentiality presents itself as a mutual obligation, regardless of the position of the parties sitting at the negotiation table. The legislative system has appreciated the protection of confidential information, which is required to be incorporated explicitly in a legal provision. This must be seen from a dual perspective, first the negative, where the holder of the confidential information is obliged not to disclose the information to third parties. The positive one establishes that the party which possesses confidential information must inform the other party of its nature. It has rightly been held that, regarding confidential information, ‘the parties seek the protection of their private interests, therefore they can abolish or restrict the sphere of its application’.
The obligation of confidentiality is a general rule from which the parties may derogate according to their own interests. With regard to the contract, where a confidentiality obligation is stipulated, it can be emphasised that the manifestation of the parties' will can take place either at the negotiation stage or during the conclusion of the contract. Regarding the first hypothesis, the parties have to carefully mention: ‘what information is secret, the persons who have access to it, the protection measures to be observed, the duration of the information obligation, and the penalties that may apply if the underwriting has been violated’.
However, Article 1184 of the Romanian Civil Code stands in apparent opposition with the provisions of Article 111 of Government Emergency Ordinance (GEO) no. 99/2006 on credit institutions and capital adequacy. Article 111 of the above-mentioned law postulates in paragraph one that:
The credit institution is obliged to keep confidential all facts, data and information about the activity performed, as well as on any fact, date or information at its disposal concerning the person, property, activity, business, personal relations or customer business or customer account information - balances, turnover, and operations - on the services rendered or on the contracts concluded with the clients.
In the next paragraph the provision defines the notion of a client of a credit institution:
any person with whom, in carrying out the activities provided in Article 18 and Article 20, the credit institution has negotiated a transaction, even if that transaction has not been completed, and any person who benefits from the services of a credit institution, including persons who have previously received credit from a credit institution.
It is clear from the rule in question that the obligation of confidentiality is more like an absolute requirement imposed on the bank as a professional mutual obligation, as it appears in the Romanian Civil Code. The legislator makes a distinction between the quality of the parties – the credit institution and the client, and it also tightens their legal order. What needs to be emphasised here is that, GEO. no. 99/2006 was enforced on January 1, 2007 and Article 111 was the generally applicable provision regarding pre-contractual and contractual confidentiality or banking secrecy. To continue, this provision was completed by the Carol II Commercial Code. Highlighting that although the new Civil Code abolished the Commercial Code, the legal disposition regarding confidentiality when at least one of the parties is a bank remains a special one.
Since the obligation of confidentiality is imposed on the bank as a result of an agreement of personal choice, it should be stressed that in this case, the confidential information will become the law of the parties. Any disregard of this obligation will entail contractual liability of the responsible party, which could represent damages, termination of the contract and other sanctions. It is appreciated that by concluding a confidentiality agreement the bank acquires a lot of sense of confidence, noticed as a consequence of the principle of good faith in contractual relationships.
The cause of a will to impose the obligation of confidentiality on the other party lies in the legitimate confidence that the client has towards the bank in keeping the secrecy and not disclosing information to third parties. From this point of view, it is considered that ‘the client’s trust resides in the quality of the bank and its employees to ensure the protection of confidentiality and the reputation of its honesty’.
In this respect, sentences have also been pronounced by the Bucharest Court of Appeals, but this case was related to the conclusion of the contract, so it still applies to the pre-contractual stage where the object of the obligation is to preserve the confidentiality of the information provided. The court stated:
The account holder has the right to request and obtain relationships regarding the financial status of his account and the statement of the account. The right to be informed of the co-contractor is a real right, with legal protection, and as long as its observance implies a concrete, palpable and determined action on the part of another subject of law with whom it is in contractual relations, it is also an effective right, and its protection in justice appears to be a perfectly legitimate approach. The applicant showed that he had chosen to use the defendant's services because he had confidence in the seriousness, confidentiality, and security of the money, but found out that money had been paid out of his accounts without his consent or empowerment. Those operations had been carried out in bank accounts, including successive account openings, in order to hide the reality and keep the privacy of customer-bank relationships.
According to Article 1184 of the Romanian Civil Code, information is considered confidential when a person perceives it as such and it is communicated to the other contracting party during the negotiations. It is a matter that needs to be analysed, whether at the negotiating stage when one party communicates to the other party, should the second party perceive the information automatically as a secret or is it necessary to point out its confidential nature.
The legislator emphasises that the party must communicate the confidential character of the information to the other contracting party. It follows that ‘the information must be at least perceived in such a way with reasonable diligence’, which means that, if a third party could assume that the information brought to the attention was confidential, then the party could also assume this. Therefore, a person who possesses some confidential information and wants its protection must fulfil two positive obligations: firstly, the obligation to determine the content of the confidential information, and, secondly, the obligation to inform the other party of that nature.
Regarding banking law, the obligation of confidentiality must be interpreted ‘in a flexible way’ meaning that the bank, even in the absence of an agreement concluded by the parties, is required not to disclose information of the contracting party concerning its object of activity as understood in Article 111 of the abovementioned law. However, some Romanian courts consider that a confidentiality obligation must be a written one. It is necessary to point out that it is clear from the overall Romanian regulations that the bank must ensure confidentiality with regard to any information that the customer provides during the pre-contractual stage. Thus, the confidentiality criteria provided by the law for the banks are: any fact, date, and information that relates to the client's activity or the person, property, activity, business, personal or business relationships of clients or customer account information - balances, turnover, services rendered or contracts with clients.
This perspective is confirmed at the European level in the case C-594/16 Enzo Bucioni, where the Court of Justice of European Union stated that, ‘It is for the competent authorities and courts to weigh up the interest of the applicant in having the information in question and the interests connected with maintaining the confidentiality of the information covered by the obligation of professional secrecy, before disclosing each piece of confidential information requested’.
In the Romanian system, recent jurisprudence regarded the conciliation of Article 111 of the aforementioned GEO with Article 6 of the Law no. 554/2004 on administrative contentious had stated that ‘information and documents related to the work of the Bank and the information and documents relating to the Bank's clients are not public information (except the information available on its website, displayed at bank counters or made public by the Bank itself: e.g. financial statements, information published in the trade register, etc.), the Bank being bound to keep it confidential.’ The court argued that the bank is not a public institution or authority and thus, it is not a subject of administrative courts. Furthermore, its clients and the protection of their confidentiality is more important than free access to public information.
In view of this, the differences between Article 1184 Civil Code and Article 111 of GEO no. 99/2006 are within their scope: if in the first case the legislator leaves the circumscription of the confidential information to the parties, in the latter one, the law expressly provides what is meant by confidential information.
The Romanian law does not circumscribe the scope of the confidential information notion nor does it define it, and this intentional omission allows individuals to define it according to their particular factual case, depending on their interests. The notion of confidential information will be understood in a different way in every case.
It should be noted that according to GEO no. 99/2006 the bank is not granted the right to dispose of its confidential information to its contractual partners or third parties. From this perspective, the Bank's notion of commercial secret has an absolute meaning, motivated by public interest and their subordination to the National Bank of Romania as a higher authority.
From the perspective of a company or non-profit legal persons, the notion of confidential information overlaps with the notion of European trade secrets. To this end, the Council Directive 2016/94 of the European Parliament on the Protection of Undisclosed Know-How and Business Information (Trade Secrets) against their Unlawful Acquisition, Use and Disclosure in Article 2 has set three conditions which need to be met for trade secrets. The trade secret as information is not generally known or easily accessible by third parties; they have commercial value because they are secrets and they were a subject of reasonable measures to control and protect their disclosure. The preamble of the above-mentioned directive focused on a homogenous definition of what is understood as confidential or secret.
As regards to the contracting party receiving confidential information, the doctrine discovers two negative obligations the bank needs to follow: one, the obligation not to disclose the information received, and two, the obligation not to use the information received for its own benefit.
The obligation of confidentiality, although a mutual obligation, is imposed on the parties with certain limitations established by the law for reasons of public order, superior but justified private interests. The banking secret enjoys a harsh regime legislator since it seeks not only the protection of privacy but also the commercial secret.
By Eleonora-Nicoleta Chiselițe
This article was originally published in issue 6.2 of the magazine, which can be accessed here. All references used can be found at the end of that issue.