India ups pressure on Switzerland to share bank info

India ups pressure on Switzerland to share bank info

'Switzerland violating global standards'

India ups pressure on Switzerland to share bank info

India may have achieved some success in obtaining details of secret bank accounts of its taxpayers in Switzerland but information about Indian taxpayers who had secret bank accounts in HSBC Geneva still remains a far cry.

After Switzerland’s refusal to share these details under the tax treaty, Finance Minister P Chidambaram has shot off a terse letter, the third in the past four months, to his Swiss counterpart Eveline Widmer Schlumpf warning that an effective exchange of tax related information is extremely important for economic cooperation between the two countries and that Switzerland must honour its “rights and duties” agreed to under bilateral Direct Tax Avoidance Convention (DTAC).

India had sought information about its taxpayers with secret bank accounts in HSBC Geneva. But Switzerland has argued that since the data was stolen, it couldn’t be shared under the tax treaty. Switzerland had communicated its decision to India in a letter April 7.

Chidambaram, in his letter, has reiterated that India would continue to take a position in global fora about Switzerland lacking legal and regulatory framework for an effective exchange of information unless the issue is addressed.

Chidambaram also said that the interpretation by Switzerland that it cannot share information as per India's request was not in accordance with international standards.
“There are unusual pre-conditions and are intended to refuse assistance. It may kindly be appreciated that the refusal to provide assistance in cases where evidence has been collected by the Indian tax authorities, for the reason that the names of persons existed in the HSBC bank data, amounts to Switzerland providing protection to taxpayers found to have evaded Indian taxes…,” Chidambaram said in his letter.

Swiss Parliament has approved changes in its domestic law that would enable sharing information with a treaty nation like India without notifying the account holder. Earlier, Switzerland had said that under its banking secrecy law, it had to provide account holders prior notice of disclosure. But this does not apply to the stolen data.

Countering Switzerland's claims, Chidambaram said that India's request "is based on data obtained legally under a DTAC with a third country and India is not party to commission of any criminal offence in Switzerland in this regard".

Earlier this year, a Swiss delegation had come to India to discuss such cases, but not much headway could be made.

Referring to that visit, Chidambaram said he had hoped "Swiss delegation would be willing to consider options that would enable exchange of information even in the HSBC cases.