SWISS TO BREAK SEAL ON BANKING SECRECY

Geneva/New Delhi :  In a major boost for India and other countries seeking details of black money stashed in Swiss banks, Switzerland on Tuesday agreed to automatic exchange of information in tax matters with overseas authorities.

SWISS TO BREAK SEAL ON BANKING SECRECY

The development is an outcome of Switzerland on Monday signing the OECD convention, which allows for the exchange of tax information upon request. Switzerland has thus joined all major countries worldwide in addressing tax evasion.

This virtually pulls down the famed secrecy wall surrounding Swiss banks.

Switzerland has been under intense global pressure to cooperate with overseas authorities to share information about accounts in its banks, which have long been misused by entities from across the world, including those from India, for evading taxes in their local jurisdiction.

In Switzerland, the OECD convention will still have to be submitted for consulta-tion before heading for ratification by Parliament. It could also potentially go to a nationwide vote before being implemented.

Almost 60 countries, including the G20 member states, have signed the convention and about 30 countries are already applying its statutes.

Offshore financial hubs like Luxembourg and Singapore signed the treaty in May, while tax havens like Liechtenstein, Andorra and Monaco have not yet agreed to it. In addition, former British Crown dependencies like Jersey, Guernsey and the Isle of Man as well as overseas territories like Bermuda and the British Virgin Islands have not signed the convention yet. All these are black money nests.

According to latest official figures released by the Swiss National Bank, the total funds held by Indians in Swiss banks fell to a record low level of about Rs 9,000 crore at the end of 2012, from about Rs 14,000 crore (2.18 billion Swiss francs) a year ago.

The overall funds held in Swiss banks by entities from across the world also fell from USD 1.65 trillion to USD 1.5 trillion during 2012.

In a White Paper on black money tabled in the Indian Parliament last year, the government had said that the total liabilities of Swiss banks towards Indians have been coming down since 2006 and fell by more than Rs 14,000 crore during 2006-2010 period.

 “The signing of the convention confirms Switzerland’s commitment to the global fight against tax fraud and tax evasion with a view to safeguarding the integrity and reputation of the country’s financial centre,” Switzerland’s Ambassador to the OECD Stefan Fluckiger said.

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