Banks in unacceptable data protection breach

The UK Information Commissioner’s Office (ICO) has found 11 banks and other financial institutions in breach of the Data Protection Act after investigating complaints concerning the disposal of customer information.

• HBOS
• Alliance & Leicester
• Royal Bank of Scotland
• Scarborough Building Society
• Clydesdale Bank
• Natwest
• United National Bank
• Barclays Bank
• Co-operative Bank
• HFC Bank
• Nationwide Building Society
• Post Office

were all found to have discarded personal information in waste bins /receptacles outside their premises.

The Immigration Advisory Service was also found to have disposed of personal information in similar circumstances.

The ICO has now required these organisations to sign a formal undertaking to comply with the Principles of the Data Protection Act. Failure to meet the conditions of the undertaking is likely to lead to further enforcement action by the ICO and could result in prosecution by the Office.

David Smith, Deputy Commissioner, said: “It is unacceptable for banks and other organisations to carelessly discard their customers’ information. It is vital that banks and other organisations take security seriously. If they do not, they not only risk further

action from the Information Commissioner but also risk losing the trust of their customers. Individuals must feel confident that banks and other organisations are safeguarding their personal information.”

The ICO believes that organisations in breach of the Data Protection Act security requirements should face a detailed inspection of their security procedures.

Barclays tops data protection complaints list

25 May 2011 

 

The ICO received more valid complaints against Barclays Bank last year than about the other major banks or building societies, Which? investigation finds

The UK's data protection watchdog received more legitimate complaints against Barclays Bank than any of the other major banks or building societies last year, research by consumer rights publisher Which? Money has found. 

From August 2009 to August 2010, the Information Commissioner's Office received 116 complaints about the bank "where compliance with [data protection principles] was assessed as unlikely". Lloyds TSB was just behind with 114 such complaints.

The most frequent complaints related to "subject access requests", when an individual asks an organisation to reveal what data it holds about them. The ICO found that 272 such complaints against the UK's eight major banks were valid, in that the bank had breached the act by failing to comply with the individual's request.

The next most frequent cause for complaint was "inaccurate data". The ICO received 41 valid complaints about the accuracy of Barclays' data during the period in question. 

In response to the report, Barclays said it is committed to protecting its customers' data. "We have no greater priority than the security of our customers’ money and personal information," it said in a statement. “Whenever there is a substantial data breach we ensure we alert the Information Commissioner’s Office, the FSA and our customers where appropriate and we do everything we can to minimise the risk."

The ICO said the numbers reveal serious issues with the way financial institutions handle customer data. "While the number of upheld complaints is small compared to the millions of bank accounts in the UK, mishandling of financial information can have a serious effect on individuals’ lives," it said. "It needs to be looked after properly and customer’s data protection rights respected."

Apple vs Samsung: IP History in the Making (Collier IP)

IP History in the making as a US court on Friday 24th August ordered Samsung to pay Apple over $1bn (£664m) after ruling it had infringed Apple’s Intellectual Property. Samsung are going to appeal and Apple has indicated it will seek sales bans on eight of the phones at the heart of the lawsuit at a hearing on 20 September. The models include the Galaxy S 4G, Galaxy S2 AT&T model, Galaxy S2 Skyrocket, Galaxy S2 T-Mobile model, Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail.

The outcome was very different to the UK court hearing where Judge Colin Birss QC said: “They (the Samsung Galaxy Tablets) do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool.” He said consumers were not likely to get the two tablet computers mixed up and ruled the Samsung tablets do not infringe Apple’s registered design. With different nuances in IP law between the US and the UK, different interpretations are placed on whether IP infringement has taken place.

Google, who recently issued a complaint against Apple responded on Sunday in the US. “The court of appeals will review both infringement and the validity of the patent claims,” it said. “Most of these don’t relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players – including newcomers – are building upon ideas that have been around for decades. We continue to work with our partners to give consumers innovative and affordable products, and we don’t want anything to limit that.”

However, Apple could also attempt to limit sales of other Android-based models it believes infringe its patents.

According to recent data from analysts at IDC based on shipments of phones, Android had a 68.1% of the global smartphone market between April and June. Apple’s iOS had 16.9% and Windows Phone/Windows Mobile had 5.4%.

Maybe the industry will settle on cross licensing arrangements, but whatever the outcome, this is IP History in the making.

Legal risks lurking in cyberspace

(R CHEEKS JR.)

IN today's brave new digital era, the power of the internet as a driver of business growth is unparalleled. Recognising this, the best led regional enterprises continue to augment their models of market engagement to include an interactive presence in cyberspace.

For Bahamian businesses seeking to leverage the marketing and transactional power of the Internet through e-commerce initiatives, important (and in many cases unresolved) questions of legal compliance arise. For the uninformed business the voyage into cyberspace is likely to be very risky. One important risk is that of extraterritorial liability.

A business that develops an interactive online presence may, in the absence of proper guidance, unwittingly expose itself to liability for breach of the laws of another jurisdiction from which its portal is accessible. These risks are amplified where the online activity is of a kind typically subject to strict regulation around the world. Businesses that have faced the greatest difficulty in this regard are those involved with online betting and gaming and the provision of usually regulated professional services. Questions can frequently arise surrounding such issues as how or where customers’ personal information is to be stored or processed, or what is an adequate level of due diligence to perform over a customer that one is meeting in the expanse of cyberspace with little to no personal contact.

Additionally, publishers such as newspapers and magazines who distribute information via their websites also face significant extra territorial legal exposure, particularly in the context of defamation, IP infringement and contempt claims arising as a result of the unlimited accessibility of their publication around the world.

The risk of extraterritorial liability, however, is not confined to these domains. The US-based Internet giant Yahoo! learned this lesson in very expensive fashion. This article will outline the circumstances of Yahoo's experience as an illustration of the compliance risks that some Bahamian businesses may face once they have blasted off into cyberspace.

The case of LICRA v Yahoo is now famous in technology circles. In May of 2000 the French Supreme Court ordered Yahoo! to implement technical measures to prevent customers based in France from buying Nazi memorabilia which were being sold in online auctions conducted on Yahoo's US-based website. The website came to the attention of the French authorities who sued Yahoo claiming that its website violated French law which prohibits the exhibition of Nazi related material.

Naturally, Yahoo's lawyers resisted the suit asserting that as a US-based outfit operating from the US, the material appearing on Yahoo's website was perfectly legal in its own jurisdiction and, indeed, protected by the US First Amendment. At the heart of this matter was the question of legal jurisdiction in cyberspace, a question that continues to perplex technology law practitioners worldwide. Yahoo submitted that it could not be sued in France under French law, as the French Courts had no jurisdiction in the matter. The French judge held quite a different opinion. The French Courts held that it was competent to rule on the matter as the visualisation in France of the offending objects in question meant that Yahoo had breached French law on French territory. To protect itself from the order of the French court, Yahoo applied to the US District Court of California asking for a declaration that the Order was unenforceable in the US. The US court, after considering the French judgment held that “the First Amendment precludes enforcement within the United States of a French order intended to regulate the content of its speech over the Internet.” It also condemned the fact that “by imposing restrictions on the US-based Yahoo.com, the French court tried to regulate the activities of a US corporation within the US on the basis that such activities can be accessed by Internet users in France.”

This case nicely illustrates how the borderless nature of the Internet presents an unprecedented challenge to the concept of sovereign rights and legal jurisdiction in the context of cyberspace. These matters continue to raise very interesting questions of international law and policy, the answers to many of which remain unclear. What is abundantly clear however is that businesses seeking to develop an interactive online presence should ensure that they are properly advised in relation to the very specific and often complicated risks involved. Bahamian businesses operating online must ensure that their cyberspace activity complies with Bahamian domestic law. In addition, a properly advised business will be well aware of the extraterritorial risks lurking in cyberspace and will deploy legal and practical measures to mitigate such risks.

This post is for your information only and is not intended to constitute a legal opinion.  If you require specific advice you should contact a Bahamian e-commerce attorney.  You can contact a Bahamian e-commerce attorney by clicking here.

BAHAMAS - BUILDING & CONSTRUCTION LAW (THE BASICS)

 (A) Building permits

Building permits are granted under the Building Regulation Act for all construction.  In Nassau, application is made to the Ministry of Works.  In the Family Islands, district councils appoint boards which issue building permits for each district.

(B) Building contracts

The internationally recognized forms of building contracts are widely used, especially for larger projects.  For example, the forms of the American Institute of Architects are common for large and medium projects, supplemented to suit local conditions.  There is an ample and varied reservoir of architects, contractors, sub-contractors, and other personnel to take your project from the design concept to ultimate completion.  For smaller projects, such as most home construction, an exchange of correspondence and construction documents, such as the approved plans, is usually sufficient.  Legal advice is also readily available.

 

(C) Completion and formalities

 

A building should be more than 95% complete before it is accepted.  All the remedial or defective work should corrected before practical or substantial completion.  The architect and his consultants check the site and prepare a punch list of work still to be done by the contractor and sub-contractors.

(D) Construction deficiencies and warranties 

 

Provisions relating to deficiencies and warranties are usually covered by the building contract.  It is left to the architect to determine whether the building can be accepted with certain deficiencies.  It is still the contractor’s responsibility to correct those deficiencies within the stipulated time.  Warranties are issued before the architect executes his certificate of substantial or practical completion.  Arbitration is commonly used to deal with construction disputes.  

This post is for your information only and is not intended to constitute a legal opinion.  If you require specific advice, you should contact a Bahamian construction law attorney.  You can contact a construction law attorney in The Bahamas by clicking here.

Bahamas committed to compliance

Jurisdiction keeps in place rigorous transparency legislation, whilst respecting client confidentiality

Published: Date: Updated: Author:

The Bahamas Investor Magazine July 13, 2011 September 5, 2011 Tosheena Robinson-Blair

As international pressure persists for offshore financial jurisdictions to improve banking transparency, The Bahamas continues to take its compliance obligations very seriously, employing considerable resources to significantly enhance systems designed to detect and report suspicious money laundering activities.

“We believe that The Bahamas has in place a robust and effective anti-money laundering and countering the financing of terrorism (AML/CFT) framework, which includes a compendium of legislation and guidelines,” says Central Bank of The Bahamas governor Wendy Craigg.

Local laws relating to money laundering include the Financial Transactions Reporting Act, 2000, and Regulations made under the act which, together embody the standards to which financial institutions must adhere when confirming the identities of their customers. 

Furthermore, there is the Financial Intelligence Unit Act, 2000, the Financial Intelligence (Transactions Reporting) Regulations, 2001, and the Anti-Terrorism Act, 2004. The Bahamas’ Financial Intelligence Unit (FIU) has issued guidelines on reporting of suspicious transactions. All financial sector regulators have also issued AML/CFT guidelines that address customer due diligence issues for financial institutions. 

Know your customer
“The Bahamas’ AML/CFT framework requires financial institutions that are licensed or registered in the jurisdiction to conduct due diligence on their customers and to have in place adequate know-your-customer (KYC) policies and procedures,” says Craigg. 

“For example, licensees of the Central Bank are required to apply their customer due diligence procedures on a risk sensitive basis,”?she explains. “This means that they should seek to have sufficient information about their clients to enable the financial institution to gauge how risky the client’s business is.” 

In this regard, Craigg says, enquiries should cover whether the client’s business poses a normal, low, or high risk to the institution’s reputation. This risk factor analysis takes into consideration the jurisdiction in which the client’s business is based, the nature of the business and the client’s identity or position. 

“To illustrate, a high ranking foreign government official would be regarded for AML/CFT purposes as a ‘politically exposed person’ and their business should be treated as high risk,”?says Craigg. “All customer account activities are required to be monitored by financial institutions, and customers who have been assessed as high risk should receive enhanced monitoring, to detect changes in their account activity and to determine whether that activity is consistent with information obtained from the client at the time the account was established.” 

These, along with other measures, seek to maintain the integrity of this jurisdiction. 

Under scrutiny
Over the past decade there’s been a surge of attention directed towards money laundering, with offshore financial institutions around the world coming under pressure to expand their anti-money laundering legislative framework and adopt international best practices.

Money laundering washes away a dirty money trail, masking the true source of income. The funds reappear in the market in a legitimate form. Hence the name, “money laundering.” Other times, an individual’s wealth may be legitimately gained, but the money laundering process helps hide huge sums in a bid to evade taxes.

One International Monetary Fund (IMF) estimate pegs the annual, global amount of money laundered between 2-5 per cent of the world’s $60 trillion gross domestic product (GDP).

According to the United States Internal Revenue Service (IRS), “money laundering creates an underground, untaxed economy that harms our country’s overall economic strength.”

Last year, the US waged an all out war to eradicate tax evasion. An IRS programme–designed to encourage American taxpayers to disclose previously hidden offshore accounts–prompted 14,000 Americans to come forward and settle unpaid taxes in exchange for leniency. The disclosures helped provide a road map for a crackdown on offshore tax havens, with the IRS subsequently opening criminal investigation offices in Beijing, Panama City and Sydney.

By 2013, the US government intends to implement new reporting requirements for offshore accounts that would penalize foreign banks for failing to disclose certain account information. Italy, France and Germany have also heightened their scrutiny and moved to prosecute banks and officials suspected of helping their citizens evade taxes.

Trusted advisor
A long established and leading offshore centre, The Bahamas has a proven track record as a trusted financial advisor. In carrying out its fiduciary duties, the Central Bank and other financial sector regulators conduct on-site inspections of the financial institutions, in order to test the adequacy of their AML/CFT policies and procedures.

“The Bahamas continuously reviews its AML/CFT framework to ensure on-going compliance with international standards, while maintaining a regulatory environment that is conducive to doing business in the jurisdiction,” says governor Craigg. 

As a member of the Caribbean Financial Action Task Force (CFATF), The Bahamas’ anti-money laundering and countering the financing of terrorism regime has been the subject of peer reviews to assess compliance with the Financial Action Task Force’s 40 + 9 recommendations on money laundering prevention and countering of financing of terrorism. These peer reviews help to assist The Bahamas in improving its anti-money laundering and KYC framework. 

Strictly confidential
Although bank secrecy may be decreasing, officials say the well-established confidentiality for those who live or conduct business in The Bahamas will continue.

“The Bahamas fully adopts the core principle of the United Nations that individuals have the right to privacy,” says Wendy Warren, chief executive officer and executive director of the Bahamas Financial Services Board (BFSB), an agency that represents and promotes all sectors of the financial services industry. 

This right to privacy is supported through a number of measures. The Data Protection Act enshrines the manner in which client information is retained and shared. Furthermore, regulatory oversight ensures that financial institutions, which undertake rigorous due diligence on clients, maintain and handle client data according to agreed protocols. These protocols are in accordance with published law and policy. 

“Where clients feel that their data has been mishandled there are avenues of redress through the courts,” Warren advises. “Moreover, this right of privacy is embodied in the tax information exchange agreements. Even after the government undertakes very careful screening of any request, an individual has the right to pursue avenues before the court to challenge sharing of any information.”

Investing in Condominiums

Condominiums, which are very popular forms of investments, are governed by the Law of Property and Conveyancing (Condominium) Act, Ch. 139. They are acquired as second or vacation homes usually by foreign investors.

The Act makes it possible to own the fee simple of a unit while certain areas like paths and laundries are owned in common. Moreover provision has to be made for the passage of water pipes, electrical and air conditioning conduits, and similar services, through the privately owned individual units. The common areas are managed by a Management Company which is operated by the unit owners. 

The unit owner holds an undivided share of the common property in proportion to the value of his unit, and the latter determines the extent of his voting rights in the Management Company.

The Act requires that there be drawings and plans (section 5), and the Company must have bye-laws (sections 14 and 15). 

The cost of the maintenance of the common property is met by the unit holders in proportion to their entitlement. 

The basic document is the Declaration by which property is subjected to the provisions of the Act, and section 4 sets out the contents of this instrument. These include a description of the property and its precise location, a schedule presenting the unit entitlement of each unit, a description of the common property, the bye-laws applicable to the property, a statement of the rules and restrictions covering the use of and transfer of the units, and other relevant matters.

This post is for your information only and is not intended to constitute a legal opinion.  If you require specific advice you should contact a Bahamian real estate attorney.  You can contact a Bahamian real estate attorney by clicking here.