In a big thrust to the Indian government's crackdown on black money inside and outside the country, a key parliamentary panel in Switzerland has approved an automatic information exchange pact between the two countries.
India had sought an approval from Switzerland to get an instant access to the details on Indians with accounts in Swiss banks.
The Commission for Economic Affairs and Taxes of the Council of States, an important panel of the Swiss Parliament's Upper House, approved the pact with India along with 40 other countries. The commission, however, added that provisions for individual legal claims ought to be strengthened.
It has asked the Swiss government to submit to Parliament an amendment “to strengthen concrete individual legal protection and to ensure that no exchange of information can take place for individual cases where a violation of essential legal claims is likely”, as per the minutes of its last meeting on November 2. The proposal will now be submitted for approval from the upper chamber of Swiss Parliament, the Council of States, in the winter session beginning November 27.
The pact will help provide a continuous access to details about alleged black money hoarders in once-all-secret Swiss banks. The information that could be exchanged under this framework would include account number, name, address, date of birth, tax identification number, interest, dividend, receipts from insurance policies, credit balance in accounts and proceeds from sale of financial assets.
The exchange will work like this — If an Indian has a bank account in Switzerland, the bank concerned will disclose the financial account data to authorities there; the Swiss authority will automatically forward the information to its peer in India who can then examine the person's details.
Nearly 100 countries across the world, including India and Switzerland, have committed to adopting a global standard for the automatic exchange of information (AEOI), to help check cross-border tax evasion.
Reports state that under this pact, domestic bank client confidentiality in Switzerland will not be affected. The proposed pact, which will come into effect from next year and first exchange of information in 2019, was approved by the Lower House of Parliament, the National Council, in September.
The economic affairs committee of the Upper House in Switzerland, while approving the pact, asked the government to put some additional safeguards in the automatic information exchange framework with India and other countries.
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