Just before the monsoon session of Parliament gets underway, a statement from the Swiss Central Bank that Indians are having $2.5 billion deposits in various Swiss banks has given enough ammunition to the Opposition to embarrass the government, which is already facing a flak from the Supreme Court on its failure to act on the black money issue.
But, regardless of the official disclosure by the Swiss Central Bank, the government was unfazed as on Monday. A senior finance ministry official maintained that the government has no such information with it, similar to the stand it had taken before the apex court.
The government has told the SC while constituting several committees on black money that it was not aware of any such deposits of Indians abroad, particularly in tax havens.
Money held in various Swiss banks by Indians, according to a spokesperson of the Swiss National Bank, is around $2.5 billion at the end of 2010, most of which, around $2 billion, are deposits by Indians.
It is suspected that most of these deposits are being withdrawn and shifted to a third country, making it difficult for the government to gather any further details once accounts are closed.
Through a recent amendment, the Swiss parliament gave its consent on the amendments to the Double Taxation Avoidance Agreements (DTAAs). But the approved amendments do not provide for any sharing of details concerning a client of Swiss banks prior to March 31, 2011, with any country. The restraint and immunity provided to account-holders prior to this period will be under the same secrecy laws that prevented India to access details so far.
“Now, the government can obtain information only on banking transactions that have occurred on or after April 1, 2011,” a senior finance ministry official clarified. Swiss authorities are not bound by the amended DTAA to provide details related to bank accounts closed before that period.
For seeking banking information prior to April 1, 2011, the government will have to meet the same criteria that were applicable earlier – where an accused, for whom the government is seeking information, has to be involved in a criminal case. Tax evasion is not a crime in Switzerland.