Swiss Par panel okays auto info exchange with India
CRACKDOWN ON BLACK MONEY
BERNE/NEW DELHI: Clearing the decks for India to get instant access to details on Indians with Swiss accounts, a key parliamentary panel in Switzerland has approved an automatic information exchange pact between the two countries.
The Commission for Economic Affairs and Taxes of the Council of States – a key panel of the Swiss Parliament’s Upper House – approved the proposed pact with India as also with 40 other countries but suggested strengthening the provisions for individual legal claims.
It has asked the Swiss government to submit to Parliament an amendment “to strengthen concrete individual legal protection and to ensure that no exchange of information can take place for individual cases where a violation of essential legal claims is likely”, as per the minutes of its last meeting on November 2.
The proposal will now be submitted for approval from the upper chamber of Swiss Parliament, the Council of States, in the winter session beginning November 27.
The pact will help provide continuous access to details about alleged black money hoarders in once-all-secret Swiss banks. The information that could be exchanged under this framework would include account number, name, address, date of birth, tax identification number, interest, dividend, receipts from insurance policies, the credit balance in accounts and proceeds from the sale of financial assets.
The exchange will work like this – If an Indian has a bank account in Switzerland, the bank concerned will disclose the financial account data to authorities there; the Swiss authority will automatically forward the information to its peer in India who can then examine the person’s details.
To help check cross-border tax evasion, nearly 100 countries, including India and Switzerland, have so far committed to adopting this global standard for the automatic exchange of information (AEOI). However, national bank client confidentiality in Switzerland is not affected by the AEOI.
The keenly-awaited pact, which proposes the automatic information exchange on financial accounts between India and Switzerland with effect from the next year and first exchange of information in 2019, was approved by the Lower House of Parliament, the National Council, in September.
The issue of black money has been a matter of furious debate in India, and Switzerland has been long perceived as one of the safest havens for the illicit wealth allegedly stashed abroad by Indians.
Earlier, while agreeing to the pact with India and other countries in June, Switzerland had sought strict adherence to confidentiality and data security.
The Swiss government will prepare a situation report before the first exchange of data for which confidentiality and data protection requirements are to be strictly followed.