Who: Switzerland
Switzerland in the first week of August 2014 amended Federal Act on International Administrative Assistance in Tax Matters. The Act governs the assistance to foreign nations in their pursuit of black money allegedly stashed in Swiss banks. Switzerland amended the key law under pressure from India and other countries.
These amendments, which have come into force on 1 August 2014, would allow India and other countries to make ‘group requests’ for information about suspected black money hoarders, while Swiss authorities would not give prior intimation to suspected individuals or entities before sharing their details.
It amended at least 10 clauses in this Act to lower guard on its famed banking secrecy walls to improve its information-exchange framework. According to one of these amendments, if the foreign authority demonstrates grounds for secrecy regarding certain case documents, the FTA (Federal Tax Administration) may refuse to allow a person entitled to appeal to inspect the corresponding files.
The Roadblocks
The Act provides that the person concerned would get a prior intimation of any such international assistance and he or she is also given an opportunity to appeal against this decision and inspect the files before being transmitted to the requesting nation.
The Act also explicitly mentions that the Swiss authorities would not consider a request if “it constitutes a fishing expedition” or “if it violates the principle of good faith, particularly if it is based on information obtained through a criminal offence under Swiss law.”
The Impact on India
On the one hand it would allow India and other nations to have information about the hoarder of black money. On the other hand, the roadblocks thwart India’s attempts to seek information on the so-called HSBC list, which Switzerland alleges that Indian and other foreign authorities got hold of after a former bank employee stole data about customers.
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