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Look nearer for black money

india Updated: Apr 01, 2009 22:28 IST

Barack Obama prised open Swiss bank secrets with the might of the US market for financial services behind him. When L.K. Advani wants to do likewise, he has to queue up, after having proved he is sincere about getting back money that has fled Indian taxes. The Swiss banks are assured of secrecy as an offshore tax haven by Berne’s insistence that tax evasion is not a crime, tax fraud is. This has made Switzerland the biggest offshore banker to the world, home to an estimated one-third of the $7 trillion dodging taxes worldwide. When Washington leans on Berne, the capitulation is predictable. If India, from where $5.6 billion are understood to have been spirited away — according to Mr Advani quoting Wikipedia — were to do the same, the reaction would be predictable: let Swiss courts establish that fraud has been committed with the money lying in its banks.

The chink in secrecy exploited by Mr Obama was provided by Swiss banks’ efforts to get into onshore banking. UBS, Switzerland’s biggest bank, has led the pack in entering new markets with arguably the most professional banking services the world has to offer. A US threat to book UBS for assisting $100 billion in tax fraud in America made it open its books back home. Swiss banks have an insignificant presence in India, and arm-twisting in the US fashion will not cut much ice. Criminality will have to be established to bring to New Delhi any — for the want of a better estimate — of the $5.6 billion that the anonymous authors of the Wikipedia article think are lying in Alpine vaults.

The Swiss have always been more than willing to aid investigations into tax fraud. US regulators had done their homework before training their guns on UBS. Surely, our charges cannot be as flimsy as numbers culled from an encyclopaedia created by faceless netizens. India’s fairly robust parallel economy has more than adequate capacity to absorb the amounts Mr Advani is quoting. It is patently obvious that the committee the BJP’s prime ministerial aspirant has set up will unearth more funny money on Indian soil than in the vicinity of Lake Geneva. The question is do they want to? As home minister in the previous NDA government, all Mr Advani would have needed to do was dial Berne.