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Indian Finance Minister P Chidambaram has threatened to drag the European nation to multilateral foras like G20 for continuing to block its requests of sharing information on Indians stashing money in its banks.
In a letter to Swiss Finance Minister Eveline Widmer Schlumpf, Chidambaram reminded her 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.
Citing tight bank secrecy laws, Switzerland has amassed assets worth trillions of dollars from foreigners over the past decades. The US Justice Department is probing 14 Swiss banks over taxes.
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.
Switzerland is a hub for private banking and a popular destination for the global wealthy elite.