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Black money: ‘Swiss drawing up list of Indians’

The official said that the Swiss authorities were very keen to support the SIT on black money.

The official dismissed the claims that black money stashed in Swiss banks by Indians could be trillions of dollar. (Source: PTI) The official dismissed the claims that black money stashed in Swiss banks by Indians could be trillions of dollar. (Source: PTI)

Switzerland has prepared a list of Indians suspected to have stashed black money in Swiss banks and the details are being shared with the Indian government, according to a senior Swiss government official.

The names of these Indian individuals and entities have come under scanner of the Swiss authorities during an ongoing exercise to identify real beneficiary owners of funds held in various banks operating in Switzerland, the official said.

“These individuals and entities are suspected to have held un-taxed money in Swiss banks through structures like trusts, domiciliary companies and other legal entities based out of countries other than India,” the official, who did not want to be named, told PTI. He refused to divulge the identities of these persons and entities, as also the amount of money they had in banks, citing confidentiality clause of the information exchange treaty between the two countries.

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The official said Swiss authorities were very keen to work with the new government in India and they would also provide all necessary support to the newly set up Special Investigation Team (SIT) on black money. He, however, dismissed claims that black money stashed in Swiss banks by Indians could be trillions of dollars, as the latest Swiss National Bank data pegs the total foreign client money across 283 banks in Switzerland at US $1.6 trillion.

When asked about rise in Indian exposure to Swiss banks at 2.03 billion Swiss francs (Rs 14,000 crore), he said these are the funds held by clients who have declared themselves as Indian and therefore were unlikely to be ill-gotten wealth.

The senior official further said the details are being shared with India on a ‘spontaneous’ basis and are different from the information sought earlier by the Indian authorities on the basis of ‘leaked’ or ‘stolen’ lists of certain banks, including the so-called ‘HSBC list’.

The Swiss government has been refusing to share details about the Indians named in this ‘HSBC list’, which was stolen by a bank employee and later found its way to tax authorities in various countries, including India. Despite repeated requests from India, Switzerland has said its local laws prohibit administrative assistance in matters where information has been sourced illegally, including through stolen lists.

The said ‘HSBC list’ allegedly contains names of Indians and other foreign nationals having black money in the Swiss unit of the global banking major.

India is one of the 36 countries with which Switzerland has signed treaties to provide administrative assistance in tax matters in accordance with international standards. In its latest annual report on ‘international financial and tax matters 2014’, the Switzerland’s Federal Department of Finance has committed itself to compliance with international standards in the area of tax administrative assistance.

Switzerland has also agreed to cooperate actively on the development of a global standard for automatic exchange of information to ensure the tax compliance of foreign asset management clients, while putting in place a robust regulatory system for identifying the beneficial owners of all types of legal entity, including trusts and domiciliary companies.

A new framework has also been put in place for exchange of information on request and spontaneous exchange of information in a much more effective manner, while work is underway to enable administrative assistance for previously committed tax crimes within the last three years.

Switzerland’s tax treaty with India also provides for “exchange of information in tax matters to the widest possible extent without allowing the contracting states to engage in fishing expeditions or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer”.

The Swiss regulations also state that “the details to be supplied in the administrative assistance request are important procedural requirements to ensure that fishing expeditions do not occur, but they must not be interpreted in such a way that they frustrate effective exchange of information”.

Swiss government has said that it would honour administrative assistance requests, if the requesting country identifies the taxpayer, “although this identification can ensue in a way other than by indicating the name and address”. The requesting country would also need to indicate the name and address of the alleged holder of the information, such as banks, if such information is known to it.

In the case of missing data on the information holder, Switzerland will provide administrative assistance if “requests are in line with the principles of proportionality and practicability in accordance with internationally applicable standards”.

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