Public Interest Disclosure in Labuan Offshore Banking: Is Statutory Intervention Necessary?

Abstract

Such inquiry like the recent Pandora Papers requires further legislative measure in offshore banking. While banking secrecy is legitimate privacy and viable, it has different character to tax evasion and money laundering activities. This article attempts to analyse public interest disclosure, onshore and offshore banking secrecy law from the perspective of statutory and judicial approaches. Statutory and judicial approaches show that banking secrecy is regarded as strict liability offense in onshore banking. The question arises whether public interest disclosure should be allowed as statutory intervention in Labuan offshore in response to a case like Pandora Papers? This research employs doctrinal analysis to unearth and address a necessary legislative measure for further development in descriptive and prescriptive manner. From the findings, it is evident that statutory intervention is deemed required to assist public interest disclosure for further inquiry and the general rule banking secrecy stated in Section 178 of the Labuan Financial and Securities Services Act 2010 (ACT 704) and Section 139 of the Labuan Islamic Financial and Securities Services Act 2010 (ACT 704). In this case, extensive provisions should be addressed in Section 178 of the Labuan Financial and Securities Services Act 2010 and Section 139 of the Labuan Islamic Financial and Securities Services Act 2010 regarding public interest disclosure within Malaysian offshore context that is fundamentally distinctive from the onshore banking. The forthcoming legislative measure is necessary to prevent such further sail in offshore banking.