The Swiss government found India’s data security and confidentiality laws “adequate” for entering into an automatic exchange of information pact, which will open a continuous access to details about alleged black money hoarders in once-all-secret Swiss banks.
The Swiss government in a detailed notification and fact sheet published in its official gazette for introduction of “automatic exchange of information relating to financial accounts with India”, has also cited decisions by other financial centres like Liechtenstein and Bahamas to enter into similar pacts. The notification and the fact sheet published in German also states about Switzerland’s interest in exploring greater access to Indian market that includes the reinsurance sector and other financial services.
Besides, Switzerland also took note of India being among the countries that provide an “adequate degree” of data protection for mutual exchange of tax information, as stated by the US tax authority, The internal Revenue Service (IRS).
The top governing body of the European nation, The Swiss Federal Council, in June ratified automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details on suspected black money even as it sought strict adherence to confidentiality and data security.
Pursuing with the decision made , the Swiss government has now notified the decision and the notification authorises the Council to notify India regarding the exact date on which such automatic exchange must take place.
Currently, the execution of the decision is planned for 2018 and the first set of data should be exchanged in 2019. The decision made is not subject to any referendum – which means that there should be no further delay in its implementation.
The increasing problem of black money has always been a very crucial subject of big debates in India, and Switzerland in India has been long perceived as one of the safest havens for the illicit money allegedly concealed abroad by Indians.
The notification issued follows hectic parleys between India and Switzerland for introduction of the AEOI (Automatic Exchange of Information) on matters of tax under the guidance of G20, OECD and other global organisations.
The Swiss government noted in the fact sheet about India, which forms part of the notification about all 41 jurisdictions selected for AEOI by Switzerland, that India displayed its commitment for implementing the international pact with effect from 2016 itself and “adaptations of the internal laws necessary for the implementation were made in good time”.
The Swiss government while listing various changes to the tax laws and introduction of new laws in order to fight black money concealed abroad as well as within the country, said, “The legal, administrative and technical framework for confidentiality and data security in India was deemed satisfactory by the Global Forum’s panel of experts.”
The notification further stated on India negotiating with the US a model intergovernmental agreement on FATCA for reciprocal exchange of information, which has entered into force after the IRS assessed the level of confidentiality and data security in India and declared it “appropriate”.