New Delhi : Switzerland on Friday ratified automatic exchange of financial account information with India and 40 other countries to facilitate sharing of details about suspected black money, even as it sought strict adherence to confidentiality and data security.
The Swiss Federal Council said the implementation is planned for 2018 and the first set of data should be exchanged in 2019. The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which the automatic exchange would begin.
As per the draft notification approved by the council in its meeting on Friday, the decision is not subject to any referendum — which means there should be no further procedural delay in its implementation.
The issue of black money has been a matter of great debate in India and Switzerland has been long perceived as one of the safest havens for the illicit wealth stashed abroad by Indians. Friday’s decision follows hectic parleys between the two countries for automatic exchange of financial information for tax probes.
The council said it will prepare a situation report before the first exchange of data, which is planned for the autumn of 2019. “In the process, it will be checked whether the states and territories concerned effectively meet the requirements under the standard, especially those concerning confidentiality and data security.
Swiss private banks, used for decades by the world’s wealthy to hide money, have simultaneously started pushing for extra legal protection of client information that could halt a much-heralded exchange of data with dozens of countries.
Swiss banks are seeking new safeguards with the claim that it will protect bank data against misuse that could expose clients to crimes such as kidnapping or blackmail. “Data could be sold or used to put pressure on clients or their families,” said Yves Mirabaud, chairman of the Association of Swiss Private Banks and senior managing partner at Mirabaud, a Geneva-based private bank. “I’m referring to countries where we’re not very sure that the democratic process is the same as ours, or where corruption is very high,” he added.
The participation of Switzerland, the world’s largest centre for overseas wealth, in the data exchange agreement was heralded at the time as a major breakthrough in ending tax avoidance.