In what can be hailed as the biggest achievement of the government in its war against corruption, Switzerland signed a pact with India for automatic exchange of information related to all the activities of Indian account holders in Swiss Banks. This gives Indian investigation agencies complete access to all the transactions made by any account holder in the Swiss banks, which is immensely important in fight against unaccounted black money earlier stashed in these banks having strict secrecy laws.
From September 2018, India will automatically receive all the information on all the transactions made by Indians having accounts in any of the Swiss Banks, earlier known for its highest standards of secrecy. It was on June 6 this year when Prime Minister Narendra Modi met Swiss President Johann Schneider-Ammann at Geneva and discussed the need for real-time automatic exchange of information in order to fight the menace of black money, which both the leaders agreed was being used to finance illegal activities all across the world. PM Modi had also discussed for quick signing of Agreement for Automatic Exchange of Information between the two countries.
Chairman of CBDT (central board of direct taxes) Mr. Sushil Chandra signed the joint declaration of the pact. The pact for implementing the Automatic Exchange of Information (AEOI) between the two countries was signed by Gilles Roduit, deputy chief of mission of the Swiss embassy in India. According to a statement by the Finance Ministry, “It will now be possible for India to receive from September, 2019 onwards, financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis.”
A statement issued by Swiss Federal Finance deptt (equivalent to India’s Finance Ministry) said, “Automatic exchange of information is a powerful tool to identify early enough undesirable trends in cross border transactions and when used appropriately can be helpful in identifying errant taxpayers and certain schemes to take remedial action through enforcement and policy interventions. Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from 2019 onwards. The signing of the joint declaration with India confirms Switzerland’s international commitment to implementing the AEOI standard. Switzerland is thus strengthening its network of AEOI partner states. India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI.”
This is a landmark day in the history of India and will go a long way in fighting corruption. With Swiss banks set to share all information on automatic basis, the option of stashing hundreds of crores of black money in Swiss banks will no longer be possible.