India gets information on Swiss bank accounts, will help trace black money

India has for the first time got information on bank accounts its residents hold in Switzerland, marking a significant milestone in the country’s attempt to trace suspect black money stashed abroad.
India is among the 75 countries with whom Switzerland's Federal Tax Administration (FTA) has exchanged information on financial accounts under the framework of global standards on AEOI (Automatic Exchange of Information), said a spokesperson for FTA.
The AEOI framework provides for exchange of information on active financial accounts and those accounts that were closed during 2018. The next exchange will happen in September 2020, the FTA spokesperson added.
However, the information exchange is governed by strict confidentiality clauses, and the FTA officials refused to disclose specific details on the number of accounts or about the quantum of financial assets associated with the Indian clients of Swiss banks. The AEOI only relates to accounts that are officially in the name of Indians and they might include those used for business and other genuine purposes.
Overall, the FTA has sent information on around 3.1 million financial accounts to the partner states and received information on around 2.4 million from them.
The exchanged details include identification, account and financial information. These include name, address, state of residence and tax identification number, as well information concerning the financial institution, account balance and capital income.
In the case of 12 countries, Switzerland received information but did not provide any, either because those countries do not yet meet the international requirements on confidentiality and data security (Belize, Bulgaria, Costa Rica, Curaçao, Montserrat, Romania, Saint Vincent and the Grenadines, Cyprus) or because they chose not to receive data (Bermuda, British Virgin Islands, Cayman Islands, Turks and Caicos Islands).
The data was collected by the FTA from around 7,500 institutions including banks, trusts and insurers.
"The largest exchange was with Germany, as was the case in the previous year. The FTA cannot provide any information on the amount of financial assets," the statement added.
Asked about specific details relating to India, the FTA spokesperson said, "the communication of statistical data is subject to the confidentiality clauses as well." To another query on the next exchange of information with India, the spokesperson said,"according to the international agreement in place, the exchanges have to take place within nine months after the end of the respective calendar year. This means the exchange takes place in September, except for corrections." The Swiss government said Switzerland has committed itself to adopting the global standard for the international automatic exchange of information in tax matters.
The legal basis for the implementation of the AEOI in Switzerland first came into force on January 1, 2017.
"The exchanged information allows the cantonal tax authorities to verify whether taxpayers have correctly declared their financial accounts abroad in their tax returns," the FTA said.
It said the exchange will take place with around 90 countries next year.The first such exchange took place at the end of September 2018 with 36 countries.
According to experts, the data received by India can be quite useful for establishing a strong prosecution case against those who have any unaccounted wealth, as it provides entire details of deposits and transfers as well as of all earnings, including through investments in securities and other assets.
On condition of anonymity, several officials said the details relate mostly to businessmen, including non-resident Indians now settled in several South-East Asian countries as well as in the US, the UK and even some African and South American countries.
Besides, there are at least 100 cases of older accounts held by Indians that might have been closed before 2018, for which Switzerland is in the process of sharing details with India under an earlier framework of mutual administrative assistance as Indian authorities had provided prima facie evidence of tax-related wrongdoing by those account holders.
These relate to people engaged in businesses like auto components, chemicals, textiles, real estate, diamond and jewellery and steel products.
A Swiss delegation was in India in August before the first set of details could get shared and the two sides also discussed possible steps to expedite execution of tax information sharing requests made by India in specific cases.
It is feared many Indians might have closed their accounts after a global crackdown on black money led to Switzerland buckling under international pressure to open its banking sector for scrutiny to clear the long-held perception of Swiss banks being safe haven for undisclosed funds.
Switzerland agreed to AEOI with India after a long process, including review of necessary legal framework in India on data protection and confidentiality.

Switzerland steps up sharing banking info; 11 Indians get notices in a day

Switzerland  has since March sent at least 25 notices to Indian clients of its banks, giving them a chance to appeal before it gives information about them to the Indian government.
An analysis of the notices issued by the Federal Tax Administration, Switzerland government's nodal department for sharing of information on foreign clients of Swiss banks, shows that the country has shared information with a number of countries, but the surge in India-related cases is noticeable in the past few weeks.

At least 11 notices were issued to Indians in one day--on May 21 . The Swiss government's gazette notifications redacted the full names of bank clients and gave initials, nationality and the dates of birth.
The two Indians whose names have been mentioned in full are Krishna Bhagwan Ramchand (born in May 1949) and Kalpesh Harshad Kinariwala (born in September 1972). However, no further details have been disclosed about them as well.
The Indian nationals with redacted names include Mrs A S B K (born November 24, 1944), Mr A B K I (born July 9, 1944), Mrs P A S (born November 2, 1983), Mrs R A S (born November 22, 1973), Mr A P S (born November 27, 1944), Mrs A D S (born August 14, 1949), Mr M L A (born May 20, 1935), Mr N M A (born February 21, 1968) and Mr M M A (June 27, 1973).
In these notices, the individuals or their authorised representatives have been asked to file their appeals within 30 days with necessary documentary proof to support their case against providing 'administrative assistance' to India, which broadly means sharing of their banking and other financial details.
Earlier this month on May 7, a similar notice was issued to another Indian national, Ratan Singh Chowdhury, giving an option to appeal within ten days, while another Indian national with redacted name, Mr R P N, was given 30 days on May 14.
In April also, some such notices were issued including to one Mrs J N V, as also to Mr Kuldip Singh Dhingra and Anil Bhardwaj, among others.
Several of these names are said to have figured in the leaked HSBC lists and Panama papers which allegedly contained names of Indians with Swiss bank accounts and are being probed by Indian authorities in alleged black money cases.
In case of Krishna Bhagwan Ramchand and Kalpesh Harshad Kinariwala, such notices were issued in April as well and fresh notices have been served to them presumably after their responses to the earlier notices.
Before that in March, Switzerland had issued such notices to Mumbai-based Geodesic Ltd and its three directors (Prashant Sharad Mulekar, Pankajkumar Onkar Srivastava and Kiran Kulkarni), as also to Chennai-based Aadhi Enterprises Pvt Ltd, who are being probed by the Indian authorities for alleged money laundering and other financial irregularities.
Switzerland was widely known as an alleged safe haven for black money before it bowed down before the global pressure and agreed to bring down the famed secrecy walls that had historically surrounded the Swiss banks, provided the requesting country gave proof for financial irregularities done by the concerned person or the company.
Along with several other countries, India has also been making use of this change in the stance of Switzerland by seeking details of suspected black money hoarders in Swiss banks and it has already got back information in a large number of cases in the last few years.
As per the Swiss law, the FTA decision can be appealed within 30 days (in some cases 10 days), provided the appellant is able to give sufficient ground to challenge it.
While the Swiss government documents did not disclose specific details related to the information and assistance sought by the Indian authorities regarding these Indian companies and individuals, such an 'administrative assistance' follows submission of proof about financial and tax-related wrongdoings and typically involves sharing of information relating to bank account details and other financial data.
While Switzerland has always denied being a safe haven for black money, it has begun sharing details for last few years with several countries including India after submission of evidence about financial and tax-related wrongdoings of the clients of Swiss banks.
Besides, a new framework of automatic information exchange has been now put in place and the details can be accessed under the new system from this year.
According to Switzerland's State Secretariat for International Finance, the global standard for the automatic exchange of information (AEOI) on financial accounts is expected to increase the transparency and prevent cross-border tax evasion.
The global standard makes provision for the mutual exchange of information on financial accounts between states and territories that have agreed among themselves to the AEOI. Besides Switzerland, over 100 states and territories, including all major financial centres, have declared their intention to adopt the standard.

Most of world population backs globalism, not local movements: WEF survey

Maybe populist political movements don’t have as much support as often presumed.
The global public favors cooperation between nations, thinks immigration is a good thing and believes climate scientists, according to a poll of 10,000 people in every region of the world.
The poll was commissioned by the World Economic Forum and will be discussed at panels at this year’s meeting in Davos, Switzerland.
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People in Southeast Asia and Africa were the strongest believers in countries working together, with 88 per cent saying it’s extremely or very important. The least enthusiastic region was Western Europe, where 61 per cent held that view. Worldwide, the figure was 76 per cent, and in North America 70 per cent.
A global majority of 57 per cent said immigrants were “mostly good” for their new country, but only 40 per cent of Eastern Europeans thought so. Despite the continuing standoff in the US over building a wall along the Mexican border, 66 percent of North Americans had a positive view of migrants.
One theme where there’s less optimistic is social mobility, with only 20 per cent of Western Europeans and 34 percent of Americans saying it’s common to be born poor and become rich.
Across the world, 54 per cent have trust in climate scientists. But in North America only 17 per cent do.

Switzerland agrees to share details of 2 Indian firms facing probes

As Switzerland continues to shed its image as a safe haven for alleged black money, the Alpine nation has agreed to share with Indian authorities the details about two companies and three individuals who are facing multiple probes back in India.
One of the two Indian companies used to be a publicly-listed entity and has already faced the wrath of capital markets regulator Sebi for multiple violations, while the other firm is said to have political links in Tamil Nadu.

As per separate gazette notifications of the Swiss government, the country's federal tax department has agreed to provide 'administrative assistance' to India on requests made about Geodesic Ltd and Aadhi Enterprises Private Ltd.
Similar requests have also been accepted for three individuals associated with Geodesic Ltd -- Pankajkumar Onkar Srivastava, Prashant Sharad Mulekar and Kiran Kulkarni.
While the Swiss government did not disclose specific details related to the information and assistance sought by the Indian authorities regarding the two companies and the three individuals, such an 'administrative assistance' follows submission of proof about financial and tax-related wrongdoings and typically involves sharing of information relating to bank account details and other financial data.

The concerned companies and the individuals can file an appeal against the decision of Switzerland's Federal Tax Administration (FTA) to provide administrative assistance to India.
Repeated attempts to contact the two companies and the three individuals for their comments failed to yield any result. In the past, they have denied any wrongdoing.
The 1982-incorporated Geodesic, once known as a fast-growing company with cutting-edge technology solutions, does not have a functional website anymore and is also no longer a listed entity as trading in its shares has been suspended by the stock exchanges for "procedural reasons".
The company and its directors have faced regulatory action by Sebi as well as other authorities like the Enforcement Directorate and the Economic Offence Wing of the Mumbai Police.
As per latest available details about the company on the stock exchanges, Pankajkumar was listed as Geodesic's chairman, Kiran Kulkarni as managing director and Prashant Mulekar as executive director.
In case of Aadhi Enterprises Pvt Ltd, which was incorporated in Chennai in November 2014, the company is said to have seen a rapid growth in real estate and other businesses, but soon landed in trouble due to alleged links to tainted politicians and for allegedly indulging in money laundering.
According to reports, the Income Tax Department has conducted multiple raids on properties of the company's promoters.
While Switzerland has always denied being a safe haven for black money, it has traditionally been known for its strong banking secrecy laws that had to be eased following a strong global crackdown on illicit funds being stashed in such jurisdictions.
The Alpine nation has been sharing details for many years with several countries including India after submission of evidence about financial and tax-related wrongdoings of the clients of Swiss banks.
Besides, a new framework of automatic information exchange has been now put in place and the details can be accessed under the new system from next year.