Often accused of providing safe havens to black money from India and other countries, Switzerland has proposed a new bill to prevent its banks and other institutions from accepting “untaxed assets” from their clients and put in place a stricter due diligence regime.
The Switzerland Federal Council, the apex decision making body of Swiss government, has asked its finance ministry, the Federal Department of Finance (FDF), to submit a consultation draft at the start of 2013 to meet its goal of preventing banks from accepting untaxed funds from their clients.The move follows rising global pressure on Switzerland to act against its banks giving ‘safe haven’ to overseas entities in name of client confidentiality.
In India as well, the issue of alleged hoarding of black money in Swiss banks has been a matter of political debate.
While a revised tax treaty has come into force between the two countries for exchange of information on untaxed assets and money laundering related activities, the rules require sufficient information for any banking details to be shared and many requests face the risk of getting rejected in the name of ‘fishing expeditions’.
The Swiss Federal Council said in a statement that it "is stepping up its efforts to combat abuses in the area of money laundering and taxation”.