Upping the ante against Switzerland for not sharing information on Indians stashing money in its banks, Finance Minister P Chidambaram has threatened to drag the European nation to multilateral foras like G20 for continuing to block its requests.
Chidambaram, in a terse two-page letter to his Swiss counterpart Eveline Widmer Schlumpf, reminded him of the April 2009 declaration adopted by G20 leaders stating the “era of bank secrecy is over.”
In a strongly worded letter, he said India might examine further steps like declaring Switzerland a non-cooperative jurisdiction if non-cooperation continues.
Chidambaram said Switzerland has not honoured the terms of the Double Taxation Avoidance Agreement (DTAA) between the two nations, under which information about Indians with accounts in Swiss banks has been sought by the tax authorities.
“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 said in the letter dated March 13.
Recalling the G20 stand that sanctions may be deployed to protect their public finances and financial systems, he said: “If information continues to be denied to India under DTAC (Double Taxation Avoidance Convention), the Government of India will be constrained to take a position in the global forum.”
He said India would not hesitate to tell global forums that Switzerland still does not comply with the standards of transparency and that the required legal and regulatory framework is still not in place in Switzerland.
“Further, the Government of India may also have to raise this issue in other multilateral fora such as the G20,” he added.
Chidambaram said India was “seriously concerned” that some Indian taxpayers may have parked substantial unaccounted income and assets in offshore jurisdictions, and “it expects cooperation from those jurisdictions to deal with them effectively.”
“In the event of continued denial of access to vital information, which Switzerland is obliged to provide under the DTAC, India may be constrained to actively consider the options available under our domestic laws,” Chidambaram said.