New Delhi: Swiss banks may have turned over
client details to the US, but they have said India is not
welcome there on a name-fishing expedition.
"Swiss law and even OECD's Model Tax Convention do not
permit fishing expeditions, in other words, the indiscriminate
trawling through bank accounts in the hope of finding
something interesting.
"This means that India cannot simply throw its telephone
book at Switzerland and ask if any of these people have a bank
account here," a top official at Swiss Bankers Association
told a news agency from.
The secrecy shield provided by Swiss banks have always
been a big issue in India, including during the campaign for
this year's general elections, and the government recently
said that it has approached Switzerland seeking details about
bank accounts held by Indians there.
Finance Minister Pranab Mukherjee recently informed
Parliament that the government was committed to unearthing
black money within and outside the country.
"Swiss authorities, I am told, have agreed for
negotiations (on the issue)... We have already taken it (the
issue of black money) not only with Swiss authorities but
other nations as well," Mukherjee said.
Last week, the US reached an agreement with Switzerland,
under which top Swiss bank UBS AG turned over details.
Asked how would India's request be handled, especially in
the backdrop of the UBS settlement, SBA's Head of
International Communications James Nason said that "the key
for the exchange of information in tax matters is the Double
Taxation Agreement between Switzerland and India."
The official noted that the Swiss bank-client
confidentiality has never been 100 percent absolute and Swiss
legislators have built in provisions for it to be lifted
during criminal investigations and also in many civil cases
and it has also evolved over time.
SBA, however, asserted that the basic principles remain
intact even following the recent agreement with the US and
"the privacy of bank clients innocent of any wrongdoing
remains protected and privacy remains the natural state of
affairs."
"No one -- not even the Swiss tax authorities -- has an
automatic right of forced entry into a client's bank account
without first satisfying the requirements and conditions
stipulated by Swiss law."
Switzerland has Double Taxation Agreement with over 70
countries including India. "There have long been well-
established legal procedures under which Switzerland provides
international legal assistance in criminal cases and in tax
matters and any country may lodge a request for such
assistance through the official channels," Nason said.
SBA noted that exchange of information on tax matters
takes place under the terms of the Double Taxation Agreement
and these are being "currently revised to incorporate the OECD
standard on the exchange of information in tax matters
according to the OECD's own Model Tax Convention".
Bureau Report
First Published: Sunday, August 23, 2009, 19:15