FM seeks Swiss bank a/c details

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Switzerland eases secrecy clause in bank transactions to help unearth black money

FM seeks Swiss bank a/c details
Switzerland on Monday decided to relax a key legislation to make it easier to help foreign countries, including India, to probe cases of suspected tax crimes. The proposed revision in Switzerland’s Tax Administrative Assistance Act would do away with an existing requirement where all individuals are given prior information before any details about them are shared with a foreign jurisdiction for alleged tax crimes.

Besides, the amendment will make it easier for Swiss authorities to extend help in matters related to ‘group requests’.

The revised Act would help India and many other countries that find it difficult to access information from Swiss authorities while probing cases of alleged tax evasion through foreign shores, including Switzerland. The changes come at a time when a renewed debate is underway in India about efforts to act against those alleged to have stashed black money in Swiss banks.

Earlier in the day, finance minister Arun Jaitley said he would write to his Swiss counterpart seeking details of Indian account holders in Swiss banks, while asserting that he had not received any formal communication from Swi­tzerland about black money stashed by Indians there.

Jaitley was responding to reports that Switzerland was ready to share with India a list of Indian account holders, who they suspect of not paying their taxes. “We have not received any official communication from Swiss government,” Jaitley told reporters.

“We are today writing ourselves to the Swiss authorities with whom the ministry has been in touch, so that details with regard to whatever information the authorities have can be expedited and the cooperation between Swiss authorities and the government of India can bring fruitful results. Our communication will be sent today itself,” Jaitley told reporters.

A Swiss embassy statement released within hours of Jaitley’s comments said,” Switzerland understands and shares India’s wish to fight tax evasion and is committed to complying with the relating international standards.”

Swiss finance ministry was quoted in the embassy statement saying “no official meeting” has taken place between India and Switzerland on administrative assistance in tax matters since February. “Since a high-level Swiss delegation met New Delhi in February 2014, no further official meeting has taken place. There is no new development to be reported.”

Even as Jaitley was writing to receive information from Swiss authorities, the Reserve Bank of India directed all banks and financial institutions to provide information and documents sought by the SIT set up to unearth black money.

In a statement issued from Bern, the Federal Council of Switzerland said that it had “resolved to bring the revised Tax Administrative Assistance Act into force on August 1, 2014”. The Swiss government also said no referendum had been called against the bill as yet and the referendum deadline will expire on July 10. “If that remains the case, the amended Act will enter into force on August 1, 2014,” it added.

The Swiss parliament had approved the revision of the Tax Administrative Assistance Act in March. The amendment includes a new provision that envisages a procedure with, in exceptional cases, deferred notification of persons entitled to appeal, as well as more precise specifications regarding group requests.

“Switzerland will thereby comply with the applicable international standard for administrative assistance in tax matters and an additional recommendation of the Global Forum on Tax Transparency,” the government said. The revision makes provision for affected persons to be notified only after information has been disclosed to the requesting authorities in urgent cases — or the cases when prior notification would compromise the investigation.

Besides, the revised Act would also make it easier for Swiss authorities to provide ‘administrative assistance’ to foreign countries in cases of ‘group requests’. While requests for individual cases are handled in a relatively effective manner, the existing rules in Switzerland put some restrictions on assistance in ‘group requests’ or cases where help is sought by foreign countries for a group of persons or a group of related cases together.

The BJP’s election manifesto had promised to take steps on a priority basis to bring back black money stashed by Indians abroad. Switzerland’s central bank SNB said recently in its report that Indian money in various Swiss banks rose by 43 per cent during 2013 to close to Rs 14,000 crore, including the money held directly by Indian clients and those through fiduciaries or wealth managers. There are various reports about the quantum of black money stashed by Indian abroad. The estimate ranges from $450 billion to $1.4 trillion.

The Swiss embassy statement said, “Like India, Switzerland has endorsed the declaration on automatic exchange of information published by OECD on the occasion of its annual ministerial council meeting in Paris on May 6-7, 2014. Switzerland is committed to resolving any open question with India and trusts that India shares its understanding that any solution can only be found within the established national and international legal frameworks.”

However, with regard to details about Indians named in the prized ‘HSBC list’, which was stolen by a bank employee and later found its way to tax authorities in various countries, including India, Switzerland has not shared details with India despite repeated requests saying its local laws do not permit information sharing.

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