Switzerland not sharing info on bank accounts of Indians: Chidambaram

SPECIAL CORRESPONDENT

The HinduSwitzerland has not honoured the terms of the Double Taxation Avoidance Agreement (DTAA) between the two nations, Finance Minister P. Chidambaram said. File photo: V. Sudershan

Outgoing Finance Minister P Chidambaram has threatened action by India against Switzerland at global forums such as G20 for its persistent denial to share information on Indians stashing money in its banks. The G20 can impose sanctions for the protection of the member countries' public finances and financial systems.

The Swiss authorities have, through a letter dated February 20, suggested that they are “closing” India's requests in 562 cases.

In a two-page letter to the Swiss Finance Minister Eveline Widmer Schlumpf, dated March 13 but released on Thursday, Mr. Chidambaram wrote that the Swiss have blocked India's requests for information despite the G20 leaders' April 2009 declaration that had stated that the “era of bank secrecy is over”.

He further wrote that India could proceed to declare Switzerland a non-cooperative jurisdiction. “Switzerland’s refusal to provide information to India and other countries on the grounds that the source of the information requested is based on ‘stolen data’ means that, in practice, Switzerland still believes in bank secrecy and is therefore not in tune with the modern era,” he wrote.

According to Mr. Chidambaram, Switzerland has not honoured its Double Taxation Avoidance Agreement (DTAA) with India. Indian tax authorities have sought information on Indians with accounts in Swiss banks under the DTAA. “If information continues to be denied to India under the DTAC (Double Taxation Avoidance Convention), the Government of India will be constrained to take a position in the global forum,” he wrote in the letter to his Swiss counterpart.

He has also warned of action against Switzerland under India's domestic laws if the denial of access to the information sought continues. Though he did not spell out the details, India has the option of making unavailable to Swiss investors benefits under the DTAA between the two countries.

“In view of your assurance that the Swiss government is keen to cooperate with India and to find possible ways of complying with our requests for information under DTAC, a bilateral discussion at the official level was held in New Delhi on February 4 and 5, 2014. However, no progress was made during the discussions and the Swiss delegation merely reiterated their previously stated positions and refused to consider any options or alternate approaches,” Mr. Chidambaram wrote.