Bern, Aug 6: Defending its decision to enter into the framework for automatic exchange of information (AEOI) with India, Switzerland said the data confidentiality laws enacted by New Delhi are ‘adequate’ enough to facilitate safe exchange of banking information. Also Read - IT Department Detects Rs 220 Crore in Black Money After Raids on Chennai-Based Tiles Company
Switzerland published an official notification, reasoning its decision to sign the AEOI pact with India. The document, published in German, cites similar information sharing agreements inked by Bahamas and Liechtenstein with India. Also Read - 5 Most Picturesque Lakes in Switzerland That Are Absolute Natural Wonders!
“The legal, administrative and technical framework for confidentiality and data security in India was deemed satisfactory by the Global Forum’s panel of experts,” it noted. ALSO READ: Amid blackmoney crackdown, Indian deposits at Swiss banks hit record low Also Read - A Solo Traveller's Guide to Switzerland!
To quell doubts among bankers and account holders, the fact sheet recalls India being recognized by US tax authority – the Internal Revenue Service (IRS) – as among those nations which provide an “adequate degree” of data protection.
The notification further argues that being signatory to the AEOI framework, would allow Switzerland to have an insight of the Indian financial market. Swiss bankers, over the past few years, have been aiming to enter the reinsurance sector of India, reports claim.
The fact sheet issued by Swiss government comes nearly two months after the Swiss Federal Council, the top financial body of European Union nations, ratified the AEOI with 40 jurisdictions, including India. The framework would allow the nations to seek information on bank account holders from the EU members, on the condition of confidentiality.
The banking information sharing pact came as a major success for New Delhi, which launched a drive to retrieve black money in 2014. The Narendra Modi government at Centre had approved the setup of Special Investigation Team (SIT) in June 2014. The SIT played a crucial role in seeking information on Indian bank account holders from Bahamas and Liechtenstein, considered to be two safe havens for stashing unaccounted wealth.
The AEOI framework would come into effect by 2018, with the first set of data being expected to be shared by early 2019. Geneva-based Association of Swiss Private Banks, in the past month, had issued a warning to all 40 jurisdictions over the maintenance of confidentiality of the data exchanged.
“We would like to ensure that bank data that will be transmitted in 2019 is used for tax verification purposes only… if data received from another country has been misused in a jurisdiction, Switzerland is unlikely to send data to that jurisdiction,” Jan Langlo, Manager of Geneva-based Association of Swiss Private Banks, was quoted as saying by PTI.