Prime Minister Narendra Modi had made good on one of his most earliest election mandates. He had promised to do his best to flush out black money and smoke out those who were hiding their wealth off shore in Swiss bank accounts. This measure was apart from implementing demonetisation last year.
Last November, India had confirmation of the Switzerland agreeing to an access of sorts and now, on Friday, they ratified an automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money, even as it sought strict adherence to confidentiality and data security.
Adopting the dispatch on introduction of the AEOI, a global convention for automatic information exchange on tax matters, 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. This decision follows hectic parleys between India and Switzerland for introduction of the AEOI (Automatic Exchange of Information) on tax matters under the guidance of G20, OECD and other global organisations.
The council said the proposal to introduce AEOI with India and others "met with widespread approval from the interested parties who voiced their opinions in the consultations". A 2014 report had mentioned how UBS and Credit Suisse appeared to be accounting for almost two-third of the total money held by Indians in Swiss banking system. At that time India had also constituted a Special Investigation Team (SIT) to probe cases of alleged black money of Indians, including funds stashed abroad in places like Switzerland.
Black money has always been an emotional issue for the voters in India. It calls to mind the strike called by anti-corruption crusader Anna Hazare, he was one who organised mass protests in the name of black money being parked outside India. Come 2014, it was one of the mandates that saw PM Modi and the BJP win at the Centre. Time and again other ministers like Arvind Kejriwal etc have brought it up, but nothing much had been done.
The exchange of information itself will be carried out based on the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information, which is in turn based on the international standard for the exchange of information developed by the Organisation for Economic Co-operation and Development (OECD).
The council said it will prepare a situation report before the first exchange of data, which is planned for autumn 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.
"It is important for the Federal Council that a level playing field be created among states and that all major financial centres, in particular, be included. This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU member states, and data will start to be exchanged with them in 2018," it added.
with PTI inputs