India's Black Money Chase and Switzerlands New Offer

Bern, Switzerland:  India has gotten a little closer to getting information on more than 600 accounts involving Indian citizens and companies at HSBC’s Geneva branch in 2008; the government wants to investigate if some of these were used to park untaxed or black money.

Switzerland has announced that it is reworking its rules which could allow it to share information with countries who want to track down tax evaders on the basis of leaked data from banks.

In 2008, Herve Falciani, an IT employee with HSBC, released the details of citizens from different countries who held accounts at the bank in Geneva, France passed on the details of more than 600 Indians to Delhi at the time. But Switzerland had said it would not make disclosures based on “stolen data”. After an interview last year with NDTV, the Indian government enlisted Mr Falciani to assist in the Supreme Court-ordered inquiry to identify tax violators and recover black money.

According to the Swiss Federal Council, the government’s top decision-making body, it should now be possible to respond to requests if a foreign country has obtained the stolen data via “administrative assistance channels” (i.e. under treaties signed between two countries) or from “public sources”. However, the amendment has to be approved by parliament, and, if cleared, is unlikely to come into effect before 2017, said government sources to NDTV.

Just two months ago, Switzerland tightened its laws to make banks more impenetrable by raising the sentence for a breach of banking secrecy from three to five years. Critics however feel this move is a major setback to efforts being made to weaken banking secrecy that shields crime and corruption.