Chasing black money, India gets Swiss invite for discussions

As India steps up pressure on Switzerland for details of alleged black money stashed there, Swiss authorities have invited Indian officials to Berne to discuss further cooperation in these matters.

Besides, Switzerland has already transmitted “few positive responses” to India, a spokesperson in Swiss Finance Ministry said, without divulging any further details on this.

Sources, however, said these “responses” may not be related to the Indian names figuring in the so-called ‘stolen lists’ of those having alleged Swiss bank accounts.

Switzerland has been refusing to share details on names obtained by Indian authorities through other countries, namely France and Germany, saying they figured in lists stolen by certain ex-employees of the concerned banks and no details can be shared on the basis of illegally-obtained information.

“As written to the Indian government, the Swiss government would like to welcome a delegation of administration officials from India to discuss the further cooperation in tax matters in Berne, after the talks in February 2014 in India,” a Federal Department of Finance spokesperson told PTI from Berne.

He was replying to queries on steps being taken by Switzerland to address India’s concerns over denial of information about alleged black money stashed in Swiss banks.

A high-level delegation from Switzerland had held discussions on tax matters with the Indian government officials in New Delhi in February this year.

Asked about the ‘few positive responses’ received by India from Switzerland and whether these were cases related to ‘spontaneous exchange of information’, the spokesperson said, “We can’t give you any details about the few positive responses that Switzerland has transmitted to India.”

Typically, there are two types of information exchange frameworks followed by Swiss authorities — ‘spontaneous’ exchange where details are given voluntarily to a foreign country if any irregularity is found with regard to a foreign client; and exchange of information in reply to a request.

The spokesperson also refused to share specific details about the number of requests received from India for exchange of information and the number of replies given by Switzerland.

“The annual statistics of administrative assistance are not country-wise but give only total figures of all countries. It is published by the Swiss Federal Tax Administration,” the Finance Ministry spokesperson said.

According to the latest data, Swiss Federal Tax Administration received a total of 1,386 requests during 2013, down from 1,499 in the previous year 2012. The number of such incoming requests stood at only 370 in 2011.

In comparison, the Swiss Federal Tax Administration made six outgoing requests to other countries in 2013, up from two in 2012 and just one in 2011.

Latest data from the Swiss National Bank showed that total money of Indians in Swiss banks increased to Rs. 14,100 crore at the end of 2013, from Rs. 8,547 crore a year ago.

Last month, Indian government made a fresh request to Switzerland seeking details of Indians having unaccounted money in Swiss banks, to which a reply came on July 4.

On Friday, Finance Minister Arun Jaitley informed the Parliament that Switzerland has raised some legal issues with regard to providing details of Indian citizens who have parked illegal funds in Swiss banks.

Asserting that the government was making all efforts to get details of such accounts, Mr. Jaitley also said it was collecting evidence in this regard.

Following amendments to the Double Taxation Avoidance Convention (DTAC) with Switzerland in October 2011, India has made several requests seeking information about its nationals holding bank accounts in Swiss Banks.

On July 8, Mr. Jaitley had said there has been a positive response to some requests, where information has been provided subject to the confidentiality clause in the said DTAC.

“In other cases, the Swiss government has not been providing the information requested citing restriction imposed by their domestic laws,” he said.

To crackdown on the menace of black money, the government has also constituted a Special Investigation Team (SIT) under the chairmanship of former Supreme Court judge Justice M.B. Shah.

Amid rising pressure from India, banks in Switzerland have said they follow strict rules and the requests from Indian authorities must be “properly justified”.

The Association of Foreign Banks in Switzerland, an over four-decade old grouping, said that a clear and transparent policy can help in dispelling “apprehensions” and the “conjectures” should not be allowed to dominate the public opinion.

The banks in Switzerland apparently also follow a code of conduct framed by another grouping, SBA (Swiss Bankers Association), with regard to due diligence process and measures required to check money laundering and other illegal activities.

As per SNB, the total number of banks in Switzerland stood at 283 at the end of 2013, including 93 foreign-controlled banks. Collectively, they employ over 1.05 lakh people.

According to an earlier statement from the State Secretariat for International Financial Matters (SIF) of the Swiss Finance Ministry, they were in touch with the Indian authorities and that Switzerland was committed to cooperate with the new government in India in its fight against tax evasion.

“Switzerland understands and shares India’s wish to fight tax evasion and is committed to complying with the relating international standards. 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,” SIF had said.