The Telegraph
Monday , August 11 , 2014
CIMA Gallary

Swiss bank rule rejig

Berne/New Delhi, Aug. 10 (PTI): Under pressure from India and other countries, Switzerland has made key changes in its local laws governing assistance to foreign nations in their pursuit of black money allegedly stashed in Swiss banks.

These amendments, which have come into force this month, will 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.

However, the onus would be on India (or any other requesting nation) to establish that any prior intimation to the account holders before information exchange would defeat the “purpose of the administrative assistance” and the success of investigation would be thwarted.

In one of the major roadblocks to effective and timely exchange of information with foreign authorities about suspected illicit account holders, the Swiss laws provide that the person concerned would get a prior intimation of any such international assistance and he or she would also be given an opportunity to appeal against this decision and inspect the files before being transmitted to the requesting nation.

While Switzerland has decided to retain these clauses in its amended Federal Act on International Administrative Assistance in Tax Matters, it has now incorporated at least 10 changes in this act to lower the guard on its famed banking secrecy walls to improve its information-exchange framework.

According to one of these amendments forming part of a new gazette notification, “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 Swiss Federal Council had decided to relax the key legislation following intense pressure from India and other countries probing cases of suspected tax crimes.

The Swiss parliament had approved a revision of the act in March this year, while a referendum deadline for the proposed amendments expired on July 10, 2014.