India makes fresh plea to Switzerland on black money

Tax evaders find new way to move funds
Last Updated 29 June 2014, 21:24 IST

The Centre has made a fresh request to Switzerland seeking details of Indians who have stashed away untaxed money in Swiss banks. 

“We have written to the Swiss authorities seeking details in this regard. Finance Minister Arun Jaitley had promised that such a step would be taken,” a senior Finance Ministry official said.

The official said the request letter has cited existing bilateral treaties and global protocols applicable to the two countries for getting information about bank and other details of Indians holding untaxed funds or hidden wealth.

Mario Tuor, spokesperson for Switzerland’s Secretariat for International Financial Matters (SIF), said that Swiss authorities were in touch with their Indian counterparts.

However, even as Switzerland tacitly agreed to help India track down black money, tax evaders seem to have adopted a new strategy to move the cash they parked in Swiss banks.

The strategy of “layering” through gold and diamond trade has come to light at Swiss banks to thwart any attempt for identification of real owners of funds entrusted with them.

At a time when Switzerland has been facing intense pressure to act on the alleged use of Swiss banks for stashing black money by Indians, the government data of the Alpine nation shows that India has become the top destination for its gold exports. 

Trade worth nearly 6 billion Swiss francs (about Rs 40,000 crore) have been conducted since the beginning of this year between the two countries.

The activities and avenues being used for “layering” include diamond trade, gold and other jewellery exports, stock market transactions through use of complex funds, as also the fund transfer through new-age virtual currencies like bitcoin.

According to government and banking sources, there is a growing suspicion that gold and diamond trade is being used to route funds from Swiss banks to India and other destinations.

At the same time, banks in Switzerland are now getting an undertaking signed by their clients, where the customer agrees to take responsibility for any possible regulatory or administrative compliance with international norms.

(Published 29 June 2014, 21:24 IST)

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