Prime Minister Narendra Modi's personal war against black money and his bid to expose tax evaders is just what Swiss whistleblower Rudolf Elmer is fighting to do. Elmer, who ran the Caribbean operations of the Swiss bank Julius Baer — before being dismissed in 2002 — has been fighting a 12-year-long legal battle to get Switzerland's bank secrecy laws changed, as he alleges they aid both rich individuals and multi-nationals conglomerates evade billions of dollars in taxes.
Elmer's case, which is currently being heard in Switzerland's federal court, will determine if these changes are indeed put in place and also if he will go to jail or not. For Swiss banks have argued that Elmer has illegally revealed information about account holders that run contrary to Swiss law.
In an exclusive interview with WION, Elmer pointed out that he had a list of individuals from India who had illegally parked in their money in Swiss and other offshore banks.
"There are about 20 individuals, which include politicians and other high worth individuals, who have hidden their money away so as to avoid paying money illegally. Since my case is going on, I cannot reveal their names. But once it is decided that by the Swiss federal court that I can't be prosecuted on the Swiss bank, which I think is very likely, then I can release the list."
The court is expected to reach a verdict in the next three months.
But despite professing his inability to share the list, Elmer also pointed out that India already had a number of options at the moment to make Switzerland reveal the names and accounts of these tax evaders. "There are three options open to the Indian government. One way is to request information officially from the Swiss courts and the other is to approach the local tax authorities for their co-operation."
"Earlier, I had cooperated with (former US Senator) Carl Levin and the IRS so there is a third point of access. It's now a matter of going for it and getting that information."
On June 16 this year Switzerland ratified the automatic exchange of financial account information with India and the first set of data will be shared by 2019. But Elmer believes that by that time it will be too late.
"There is plenty of time for corporates to rearrange and set up their offshore structures and there are plenty of ways in which you can do that. You can set it up in a way that there is no person behind it. You can hide money under account of company directors, you can get it hidden in a trust and through stocks etc. So by the time you act that person would have manipulated them already," he said.
In this regard, Elmer also pointed to multinationals and said a strict watch needed to be kept on them. "Multinationals often conduct a practice called profit distribution where a profit in one country is sent to another so that tax is evaded. We need to clamp down on this practice."
Despite the glaring loopholes and the apparent lack of will by the Swiss bank authorities to act, Elmer said there were many actions that India, and the other BRICS countries, could take to make Switzerland reveal defaulters.
"India is a huge market for the Switzerland's banking sector. If the government decided not to grant licences to Swiss banks such as Credit Suisse and UBS to operate in India that would be a huge incentive for the Swiss banks to act. You can also put pressures through Swiss businesses, especially on multinationals like Nestle, Bausch & Lomb etc. to get the government to act because Switzerland has to do business with the world. The BRICS countries can put pressure on Switzerland or any other offshore institutions. It's just a matter of getting on and doing it."
NAWAZ SHARIF'S PUNISHMENT
- The recent judgment against Nawaz Sharif, where he was forced to step down as PM because of his family's offshore accounts, are some of the deterrents that are needed if tax evasion is to be stopped.
SNITCH IN TIME
- On June 16, Switzerland ratified the automatic exchange of financial account information with India and the first set of data will be shared by 2019. But Elmer believes it will be too late by then.
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