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This is an archive article published on September 5, 2009

Dark chocolate

The Swiss must be pressured to disclose black money details

Ever since black money siphoned off into foreign vaults the owner protected by a numbered account and a number of secrecy laws was turned into a campaign issue in

India,the clamour was only likely to grow. But if the recent deal between UBS AG and the US government,under which the Swiss banking major will hand over the details of 4,450 bank accounts to Washington,gave India hope,that hope was short-lived. Last month,the Swiss Banking Association declined to cooperate with an Indian attempt to get information,saying it was a fishing expedition trawling through names. Now the Swiss vice-president,Doris Leuthard,has said that a deal could be reached permitting the Indian government to access the accounts of Indian tax evaders. Of course,the Indian government must provide concrete information and follow a set procedure. Are the Swiss finally serious?

Not necessarily. Phrases like concrete information and set procedure dont really set the terms for real cooperation. It cannot be the case that,in order to accuse a person of tax evasion,you must first discover every detail of the evaded money; that would put the cart before the horse. You cannot ask first for clinching proof of perfidy,and only then open vaults to sunlight. The UBS-US deal,too,was more in the nature of a one-off compromise rather than a set of lasting commitments. But at no point should we in India get the sense that our government is using Swiss recalcitrance as a crutch. The case that Indian citizens are breaching OECD-style regulations should be effectively and unrelentingly made to the Swiss. Laziness in doing that is unforgivable.

Given that Swiss secrecy laws provide the competitive advantage that runs its mammoth banking industry,the Swiss are unlikely to relent easily they even threatened UBS if it complied with the US courts. India must learn from the United States tactics that resulted in UBS capitulating,but cannot confine itself to that outcome alone. Keep the larger picture in mind: what we need is not just names,but an end to the culture of money protected by dark vaults and darker laws.

 

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