Document Type

Article

Publication Date

1991

Abstract

The recent decision of the Ontario Court of Appeal in R. v. Milelli culminates a decade of ambiguity in the laws regulating foreign banks in Canada. The case deals with the interpretation of s. 302(1)(a) of the Bank Act, which prohibits foreign banks from undertaking "any banking business" in Canada. The provisions are cryptic and contain no definition of the term "banking business". This has left foreign banks at the caprice of the statute. They are uncertain about the extent to which they are permitted either to deal with Canadian customers directly, or to participate in co-operative transactions (such as syndicated loan agreements) with Canadian chartered banks. As leave to appeal was refused by the Supreme Court of Canada, it appears that, for the time being, the courts will be of no assistance in clarifying the intention of the Act.

In this article, I will argue that the foreign banking provisions of the Act fail to satisfy the legislative ideals of clarity and coherence. To that end, I will proceed as follows. I will begin with a discussion of the Parliamentary motivations underlying the foreign banking laws. In the same section, I also will consider judicial interpretations of banking in general (pertaining to other statutes) and interpretations of other sections of the Bank Act. In the third section, I will analyze the Milelli decision. Finally, in the concluding section, I will comment briefly on the problems within the Act and suggest some tentative revisions that might clarify the laws regulating foreign banks.

Disciplines

Banking and Finance Law | Law

Comments

Gillian Lester, "The Regulation of Foreign Banks in Canada: Milelli Marks a Decade of Ambiguity," (March 1991) 17 Can. Bus. L. J. 430-454. Reproduced by permission of Canadian Business Law Journal Inc. and Thomson Reuters Canada Limited.

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