“While Mr Das spent some time talking about disclosure in US litigation, he accepted that he was not aware of any case in which FinCEN had imposed penalties in a situation where a foreign court had ordered the disclosure of US SARS. What is singularly missing from Mr Das’s analysis is any assessment of the risk of prosecution or even civil sanction in the circumstances of this case. He does not even seem to have been asked the question, despite that being the core issue on this application. I cannot conclude, therefore, based on the evidence before me that the Defendant has demonstrated any real risk of prosecution or civil sanction if the Defendant disclosures US SARs pursuant to an English Court order.”
“For present purposes we are concerned with the species of confidentiality, namely, where a party to litigation in England asserts a right or a duty to withhold inspection of documents because a failure to do so would give rise to a contravention of foreign criminal law.”
“The court may take into account, in deciding whether to order disclosure, the fact that compliance with the order would or might entail a breach of foreign law……. It will…need to be shown that the foreign law contains no exception for legal proceedings, and that it is not just a text, or an empty vessel, but is regularly enforced, so that the threat to the party is real. Even so, the court has a discretion and, on the basis that English litigation is to be played according to English and not foreign rules, it will rarely be persuaded not to make a disclosure order on this ground. More often than not where foreign law is raised as an objection, any threat of a sanction abroad against the disclosing party is found to be more illusory than real.”
“Pulling the threads together for present purposes: (i) In respect of litigation in this jurisdiction, this Court (i.e., the English Court) has jurisdiction to order production and inspection of documents, regardless of the fact that compliance with the order would or might entail a breach of foreign criminal law in the “home” country of the party the subject of the order. (ii) Orders for production and inspection are matters of procedural law, governed by the lex fori, here English law. Local rules apply; foreign law cannot be permitted to override this Court’s ability to conduct proceedings here in accordance with English procedures and law (iii) Whether or not to make such an order is a matter for the discretion of this Court. An order will not lightly be made where compliance would entail a party to English litigation breaching its own (i.e., foreign) criminal law, not least with considerations of comity in mind (discussed in Dicey, Morris and Collins, op cit, at paras. 1-008 and following). This Court is not, however, in any sense precluded from doing so. (iv) When exercising its discretion, this Court will take account of the real – in the sense of the actual – risk of prosecution in the foreign state. A balancing exercise must be conducted, on the one hand weighing the actual risk of prosecution in the foreign state and, on the other hand, the importance of the documents of which inspection is ordered to the fair disposal of the English proceedings. The existence of an actual risk of prosecution in the foreign state is not determinative of the balancing exercise but is a factor of which this Court would be very mindful. (v) Should inspection be ordered, this Court can fashion the order to reduce or minimise the concerns under the foreign law, for example, by imposing confidentiality restrictions in respect of the documents inspected. (vi) Where an order for inspection is made by this Court in such circumstances, considerations of comity may not unreasonably be expected to influence the foreign state in deciding whether or not to prosecute the foreign national for compliance with the order of this Court. Comity cuts both ways.”
“The exigencies of daily court room life are such that reasons for judgment will always be capable of having been better expressed. This is particularly true of an unreserved judgment such as the judge gave in this case but also of a reserved judgment based upon notes, such as was given by the District Judge. These reasons should be read on the assumption that, unless he has demonstrated the contrary, the judge knew how he should perform his functions and which matters he should take into account. … An appellate court should resist the temptation to subvert the principle that they should not substitute their own discretion for that of the judge by a narrow textual analysis which enables them to claim that he misdirected himself.”
“As stated above, I am not aware of the disclosure of a SAR or SAR information in a foreign court and am not aware of penalties being imposed on a US financial institution or an unauthorized SAR disclosure to a court. Accordingly, it is difficult to assess considerations that may reduce or mitigate sanctions from such a disclosure. As part of its enforcement factors, FinCEN considers a broad range of considerations, including (1) the nature and seriousness of the violation; (2) the impact or harm of the violations on FinCEN’s mission to safeguard the financial system from illicit use; (3) the pervasiveness of the wrongdoing; (4) the history of similar violations, or misconduct in general; (5) the financial gain or other benefit resulting from, or attributable to, the violations; (6) presence or absence of prompt, effective action to terminate the violation; (7) timely and voluntary disclosure to FinCEN; (8) quality and extent of cooperation with FinCEN and other relevant agencies; (9) systemic nature of the violation; and (10) whether other law enforcement have already taken action. In view of these enforcement factors, I would expect that sustained engagement with FinCEN would play an important role in the assessment of any penalty, but FinCEN’s assessment of the impact or harm of the disclosure to the broader SAR confidentiality requirements and in a particular case would be important factors for consideration as well.”
“It is sometimes said that in taking [confidentiality] into account, the court has to perform a balancing process. The metaphor is one well worn in the law, but I doubt if it is more than a rough metaphor. Balancing can only take place between commensurables. But here the process is to consider fairly the strength and value of the interest in preserving confidentiality and the damage which may be caused by breaking it; then to consider whether the objective - to dispose fairly of the case - can be achieved without doing so, and only in a last resort to order discovery, subject if need be to protective measures. This is a more complex process than merely using the scales: it is an exercise in judicial judgment.”