The Swiss government has started preparing a list of Indians with suspected black money. This shows that the Indian government is really serious about seeking information on black money
In a major boost to India’s fight against black money, Switzerland has prepared a list of Indians suspected to have stashed untaxed wealth in Swiss banks and the details are being shared with the Indian government.
According to an official from the Swiss government, the authorities were very keen to work with the new government in India and they would also provide all necessary support to the newly set up Special Investigation Team (SIT) on black money. In May this year, the first Cabinet meeting of the Narendra Modi government resolved to form the SIT to unearth black money stashed abroad. The SIT is headed by former Supreme Court judge MB Shah and includes the Revenue Secretary, CBI and IB directors, an Enforcement Directorate official, CBDT Chairman and RBI deputy governor as members. Former Supreme Court judge Arijit Pasayat will be the vice-chairman of the panel.
While declining to be named, as he is not authorised to speak to media, the senior official from Switzerland further said the details are being shared with India on a ‘spontaneous’ basis and are different from the information sought earlier by the Indian authorities on the basis of ‘leaked’ or ‘stolen’ lists of certain banks, including the so-called ‘HSBC list’. But more about this later.
The names of these Indian individuals and entities have come under the scanner of the Swiss authorities during an ongoing exercise to identify real beneficiary owners of funds held in various banks operating in Switzerland.
“These individuals and entities are suspected to have held untaxed money in Swiss banks through structures like trusts, domiciliary companies and other legal entities based out of countries other than India,” the official said.
He refused to divulge the identity of these persons and entities, as also the quantum of funds held by them in Swiss banks, citing confidentiality clauses of the bilateral information exchange treaty between two countries.
He however dismissed claims that black money stashed in Swiss banks by Indians could be trillions of dollars, as the latest Swiss National Bank data pegs the total foreign client money across 283 banks in Switzerland at $1.6 trillion.
Asked about rise in Indian exposure to Swiss banks at 2.03 billion Swiss francs (Rs14,000 crore), he said these are the funds held by clients who have declared themselves as Indian and therefore were unlikely to be ill-gotten wealth.
It must be noted that under pressure from the OECD and the G20, the Swiss government in March 2009 decided to abolish the distinction between tax evasion and tax fraud in dealings with foreign clients. In 2013, the Swiss Parliament approved a law that allows Swiss banks to cooperate with tax authorities from the US as specified in the Foreign Accounts Tax Compliance Act (FATCA).
In October 2013, the Swiss government stated that it intended to sign an international agreement sponsored by the OECD, which if ratified by Parliament, will align Swiss banking practices with those of other countries, and in effect end the special secrecy that clients of Swiss banks had enjoyed in the past.
Earlier, Swiss banking secrecy was dealt a severe setback by the revelations made by ex-UBS banker Bradley Birkenfeld, who blew the whistle on UBS providing Americans with vehicles to hide up to $20 billion in assets to avoid taxes. In November 2008, a US federal grand jury indicted Birkenfeld's former boss, Raoul Weil, as the result of the investigation of UBS' US cross-border business. As a result of the information Birkenfeld gave US authorities, the Department of Justice (DOJ) said it had reached a deferred prosecution agreement (DPA) with UBS that resulted in a $780 million fine and the release of previously privileged information on American tax evaders.
On 11 September 2012, Birkenfeld was awarded $104 million for acting as a corporate whistleblower by the US IRS Whistleblower Office. At that time, Swiss newspaper Blick wrote, “Birkenfeld was a blessing for the Swiss financial industry, in that his revelations helped accelerate the industry's transition away from its reliance on 'dirty' money by dooming the bank secrecy laws that enabled tax evasion."
This shows that if the particular government is serious, then the Swiss authorities are prepared for cooperation and sharing list of bank account holders, who may have stashed unaccounted money in that country.
In 2012, the Income-Tax (I-T) department in India, probing the secret list of account holders in the Geneva branch of HSBC Bank, had approached Swiss revenue authorities for banking data of certain individuals after investigations showed some of them reportedly had other accounts under fictitious names. India had obtained data of over 700 HSBC accounts from French government channels during that year.
The Reserve Bank of India (RBI) had said, based on observations reported in its Annual Financial Inspection of HSBC for 2012, it would take further action against the lender, which is under the scanner for alleged violations of money-laundering and KYC norms. But there has not been much action on this front.
Black money: India to get its nationals’ Swiss bank details, SIT readies further action-Times of India
ZURICH/NEW DELHI: India's efforts to crackdown on black money stashed abroad on Sunday got a major boost with Switzerland readying a list of Indians suspected to have un-taxed money in Swiss banks, while special investigation team constituted by Indian government promised action if any illegality is found.The names of certain Indian individuals and entities came under the scanner of the Swiss authorities during an ongoing exercise to identify the real beneficiary owners of funds held in various banks operating in Switzerland, a senior Swiss government official told PTI.
The list of such people and entities is being shared with India, while further details would also be provided in due course and all necessary administrative assistance would be made available as well, he said.
LinkTimes of India
