The Centre has admitted to having interacted with the German government on information regarding black money stashed by Indians in LTG Bank in Liechtenstein, a landlocked country between Austria and Switzerland. This has been admitted by the Commerce Ministry in reply to an RTI application by NGO Transparency International-India. The ministry has, however, refused to divulge the contents of the letters exchanged between the two governments, stating that it could adversely affect its relations with Germany.
It is believed that Indians have deposits in the LTG bank, similar to ill-gotten money kept in bank accounts in St Kitts Island and Switzerland.
For the first time, the government admitted that it had sought information on Indian account holders from Germany. The ministry said it sought information from the German government on its own initiative in February 2008 under the Double Taxation Avoidance Agreement (DTAA).
The Commerce Ministry refused to disclose transcriptions of interactions between the two governments, citing Article 26 of the DTAA. The Article says any information from a contracting state shall be secret and that it shall be disclosed only to persons or authorities involved in the assessment or collection of, the enforcement or prosecution in respect of, or determination of appeals in relation to, taxes covered under the agreement, the public information officer (PIO) of the Commerce Ministry said.
The PIO also quoted section 8 (1) (a) of the RTI Act, which debars providing information that can harm India’s security, strategic, scientific or economic interests with a foreign state.
Disagreeing with the PIO’s contention, the NGO has filed an appeal with the first appellate authority of the ministry.