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Swiss banks to give information only on future cases

Pranab Mukherjee told the Lok Sabha the only time Swiss banks had shared information on transactions was in 1945 on the Nazis’ assets.

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The revised double taxation avoidance agreement (DTAA) with Switzerland may not help India track down the black money stashed by Indians in Swiss bank accounts, known for their secrecy.

A day after signing a protocol amending the double taxation avoidance pact with Switzerland, Union finance minister Pranab Mukherjee on Tuesday told the Lok Sabha that “as far as Swiss laws are concerned, they don’t give any information on their banking transactions”. The revised pact would result in information sharing on taxes, with a wider scope. He also said that the information to be made available by Switzerland would apply only for prospective cases, and not for the past.

Replying to BJP leader LK Advani’s query on extracting details on black/illegal money from Swiss banks, Mukherjee said “Swiss banks do not give any information on banking transactions”. The FM added that the only time the Swiss banks had shared such information was in 1945 on the Nazis’ assets.

On another question related to the Swiss bank disclosures and the fresh treaty between the two countries, Mukherjee pointed out that it was an agreement between two sovereign nations. “They are not subordinate to us and we have to agree to whatever concessions we get,” Mukherjee said.    

The earlier DTAA allowed use of banking information only for taxation matters, and sharing of details with the parliament and enforcement directorate was not permitted. The amended DTAA permits “use of information by such other purposes which are allowed under the laws of both states and the compettent authority of the supplying state authorities”.

Even if there was no domestic interest, information can be exchanged now. Also, there’s a specific provision in the amended agreement for providing banking and ownership information.
The opposition parties have been pressing the UPA government for getting the Swiss banks to disclose the details of Indian money stashed there. Indians have an estimated Rs25 lakh crore to Rs75 lakh crore in bank accounts abroad, mostly in tax havens such as Switzerland.

The protocol to amend the DTAA was signed by finance minister Pranab Mukherjee and Swiss foreign minister Micheline Calmy-Rey on Monday.

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