Black money: Swiss Parliament to take up India pact soon
Switzerland's parliament will soon take up the issue of inking a crucial Automatic Exchange of Information (AEOI) agreement with India, a move that could help combat the menace of black money and erect a platform to enable the exchange of information between the two countries.india Updated: Sep 03, 2015 21:51 IST
Switzerland's parliament will soon take up the issue of inking a crucial Automatic Exchange of Information (AEOI) agreement with India, a move that could help combat the menace of black money and erect a platform to enable the exchange of information between the two countries.
“The domestic procedures regarding AEOI are still underway. The Swiss Parliament will start to deal with the subject this autumn," Anne Césard, spokesperson of the Swiss state secretariat for international financial matters, told Hindustan Times.
The procedures, Césard said, “will not be completed before next year”.
Once the pact is formalised, information that will be shared by the two sides will include personal details, tax identification number, credit balances in accounts, and transaction details including all receipts accruing from interest, dividends, insurance policies and sale of financial or other assets.
Such an information exchange agreement will be critical for India winning the fight against black money as considerable illegal wealth of Indians is believed to be stashed in Swiss banks.
India and some 100 governments are signatories to the AEOI framework but bilateral agreements – like the Indo-Swiss one in this case – are required to be signed among member countries too.
AEOI signatories will send and receive pre-agreed information every year, without making specific requests.
Traditionally, Switzerland's banks have been known for strong secrecy norms that have reportedly resulted in huge deposits of illegal cash from across the globe. Since 2009, as a result of sustained global pressure against illegal money stashed in Swiss banks, the country has embarked on a path of greater transparency in its banking operations.
The Swiss Bankers Association (SBA) too has decreed that from 2016, all its members will have to identify the controlling owner of operative legal entities and private companies.
Asked what steps the SBA would take if banks do not comply, Daniela Flückiger, head of communications (Latin World) at SBA, told Hindustan Times: “All banks are obliged to respect the CDB (code of due diligence). The Swiss Financial Market Supervisory Authority (FINMA) also ensures that these rules are respected.”
A comprehensive AEOI framework agreement with about 100 countries and the Foreign Account Tax Compliance Act (FATCA), already signed with the US, are expected to give sufficient teeth to the Indian government's stated aim of detecting, recovering and bringing back black money, mainly from foreign tax havens.
First Published: Sep 02, 2015 11:48 IST