India to get details of Swiss bank accounts of its nationals

23 June 2014

The Special Investigation Team constituted to track black money stashed abroad by Indians was boosted by the Swiss government on Sunday offering to provide a list of all Indians who have deposited money in banks there.

The names of these individuals and entities have come up during an ongoing exercise to identify the real beneficiary owners of funds held in various banks operating in Switzerland and the authorities are preparing a list of such account holders, reports quoting a senior Swiss government official said.

Unlike in the past when the Swiss government had allegedly refused to part with information based on the so-called leaked information (See: Swiss to ratify pact by next year but bar 'fishing expeditions'), the details are now being shared with India on a "spontaneous" basis, according to the official.

The official also said that Switzerland was looking forward to working with the new government in India and it would extend all possible support to the SIT on black money.

The earlier Indian government had complained of Switzerland refusing to part with information as its local laws prohibited administrative assistance in matters where information has been sourced illegally, including through stolen lists.

Switzerland's central bank, SNB, had earlier reported that Indian money in various Swiss banks had risen by 43 per cent during 2013 to an equivalent of around Rs14,000 crore. This included money held directly by Indians and those through fiduciary intermediaries.

These accounts are suspected to include untaxed money held through trusts, domiciliary companies and other legal entities based out of countries other than India.

Banks and regulatory authorities in India have since sought details about the source of the funds and the beneficiary ownership of such accounts.

The identity of the concerned entities as also the quantum of funds involved, however, will remain within the information exchange framework between India and Switzerland.

The Swiss official discounted reports of Indians holding trillions of dollars in bank accounts there, saying the total size of foreign money from across the world in all 283 banks operating in Switzerland stood at just about $1.6 trillion.

He also said those funds might not necessarily be illicit funds as the clients have themselves declared to be Indians.

Reacting to the news Justice Shah who heads the Special Investigation Team that is looking into the issue of black money, said, "It is not a list of only black money. It is a list of those persons who are also legally vested. It is a combined list. We are asking for the list of the said persons. Then we will verify. Then action is taken."

"If it is legal we cannot do anything, if it is illegal or unaccounted money then we take action. It depends on which manner the amount is deposited," he added.

Switzerland has signed treaties to provide administrative assistance in tax matters with 36 countries, including India, in accordance with international practices.

Switzerland's Federal Department of Finance, in its latest annual report on 'international financial and tax matters 2014', has committed itself to compliance with international standards in the area of tax administrative assistance.

It 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.

Senior advocate Ram Jethmalani, who has been instrumental in the securing a Supreme Court order for the constitution of the Special Investigation Team to probe the black money case, said from London, "I am very happy and feeling relaxed today and I am hopeful that the NDA government will take the fullest possible advantage of this information.''

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