Modi, Doris discuss to operationalise AEIO

India and Switzerland here on Thursday discussed ways to operationalise the automatic exchange of information (AEIO) agreement signed last year to effectively combat black money and tax evasion during talks between Prime Minister Narendra Modi and visiting Swiss President Doris Leuthard.

The agreement is awaiting nod of Swiss parliament, where the largest group, the rightist conservative Swiss People's Party or the SVP has put spokes on its implementation taking plea that India was amongst world's top corrupt countries. "Hopefully, our parliament will pass it by the end of the year. We have strongest laws against money laundering and therefore we hope that the first exchange of information can begin by 2019," Swiss President said at the joint press interaction.

During bilateral talks, Modi sought greater cooperation to ensure bilateral financial transparency and thanked the Swiss government for its support to India's membership bid for the Missile Technology Control Regime (MTCR). President Doris Leuthard, expressed strong commitment to help India to deal with the problem of blackmoney.

"Transparency in financial transactions is an issue of worry to stop black money, hawala transactions and fund for terrorism. Our cooperation continues with the Swiss to ensure automatic sharing of information. We welcome Swiss investments and work has begun on a new bilateral investment treaty," the PM said at the joint press interaction. Swiss leader responded by saying that her country has accepted AEIO on financial issues.

Both sides also signed two major agreements on railways following which the Swiss president said, "India is playing an important role in global political agenda. We can learn from each other." Ms Leuthard, also expressed her country's commitment to the Paris agreement and said that the challenge lies in implementing this international agreement on national level and said, "We both believe in rule of law and share common values which will help our future collaborations."

The Swiss president is accompanied by senior government officials and a large business delegation of leading Swiss companies. Swiss presidents have visited India on three occasions earlier — in 1998, 2003 and 2007. Modi visited Switzerland in June last year.

In Switzerland, a key panel of Swiss parliament the Committee on Economy and Royalties of the National Council or CER-N is currently examining the criteria for the countries that would satisfy the Parliament to enable them to get access to data under the automatic exchange of (AEIO). The Federal Council of Swiss government had adopted a resolution on June 15 regarding introduction of automatic information exchanges with 41 jurisdictions including India.

In late 2016, India and Switzerland signed a data-sharing treaty that would have Swiss authorities collect bank data and send it to Indian tax authorities and vice versa. The automatic exchange of tax information was hailed in India as a victory for the Modi government. But the Swiss parliament has put spokes on the agreement. The SVP released a list of "corrupt countries" that includes India, Argentina, Brazil, China, Russia, Saudi Arabia, Indonesia, Colombia, Mexico, South Africa and the United Arab Emirates. "We do not want an automatic exchange of bank data with corrupt and unfree states," said the SVP president, Albert Rösti. The SVP claims it will get majority support in Parliament to bring the AIE process to a halt.

The joint statement issued at the end of talks emphasized the willingness of both sides to further enhance cooperation in the fight against tax fraud and tax evasion. They acknowledged the importance of a global level playing field for effective implementation of the international standards on tax transparency.

"The two Leaders look forward to the first transmission of financial account information between the two countries. Prime Minister Modi welcomed the steps taken by the Swiss side to expedite the execution of tax information sharing request by India and hoped that the two sides resolve outstanding issues expeditiously through bilateral dialogue at competent authority level," the joint statement said. Modi, during talks also expressed his expectation that Switzerland will implement the recommendations of the Global Forum on Transparency and Exchange of Information in Tax Matters with the view to further improve mutual administrative assistance in tax matters.

FIGHTING TAX FRAUD

• The joint statement issued at the end of talks emphasised the willingness of both sides to further enhance cooperation in the fight against tax fraud and tax evasion. They acknowledged the importance of a global level playing field for effective implementation of the international standards on tax transparency.