India seeks Liechtenstein assistance in black money trail

A spokesperson for the Liechtenstein government confirmed to PTI that a request has been made by its Indian counterpart for administrative assistance in relation to some Indian clients of LGT Bank, based in the European country located near Switzerland.
However, the Liechtenstein government is unlikely to entertain India's request in the absence of any bilateral tax treaty between the two countries.

"But we are working towards the common goal of establishing a treaty that enables us to exchange information in the future, according to the international standards," the government spokesperson said in reply to emailed queries.

The Indian government has been under tremendous pressure to take action against those with stashed illicit wealth in foreign banks located mostly in Switzerland and some other European locations like Liechtenstein, where clients' details are kept highly secretive.

Last year, Indian government is said to have got some information from German government about certain Indians having secret accounts in LGT Bank. The tax department here has reportedly also begun serving notices against these entities for evasion of taxes.

The Indian government is believed to have sought help from Liechtenstein government as part of its investigations into possible tax evasion and other violations by the Indians having accounts in LGT Bank.

India is currently seeking to sign treaties with a number of countries, including Switzerland and Liechtenstein, to enable exchange of information about tax evasion and other financial offences.

Asked whether India has sought a tax treaty, Liechtenstein's government spokesperson said: "India has confirmed her interest in concluding a tax agreement with Liechtenstein.

"Exploratory talks took place, with a view to enter into negotiations. On the basis of the Liechtenstein Declaration of March 12, 2009, where the Government committed to the global OECD standards on transparency and information exchange in tax matters, the Government of Liechtenstein is prepared to negotiate a tax agreement with India.

"It is the firm view of the Government that compliance with international standards is a key factor to grant stability, reputation, and credibility of Liechtenstein's financial centre," the spokesperson added.

Liechtenstein has offered to negotiate a tax agreement with India accordingly, she said, adding that the country was committed to negotiate comprehensive bilateral tax agreements on the basis of the accepted international standards.

Asked about India's request for administrative action against LGT Bank's Indian clients, she said: "We cannot reply to the content of the request since there is no legal basis, i.e. no bilateral agreement, for this."

The Indian government has even been rapped by the Supreme Court, which had expressed displeasure over the government's reluctance to disclose information about black money stashed by Indian in foreign banks.

"It is a pure and simple theft of the national money. We are talking about mind-boggling crime. We are not on the niceties of various treaties," a bench comprising justices B Sudershan Reddy and S S Nijjar had said on Wednesday.