Swiss banks have made it clear

In the backdrop of India and Switzerland re-negotiating a bilateral tax treaty for exchange of information on tax evaders, Swiss banks have made it clear that any country seeking secret account details must be specific with names of the individual and the bank involved.

“The country requesting information must name the specific individual and also give the name of the bank involved... The idea is to protect the privacy of clients innocent of any wrongdoing, and we believe this is correct,” a top official at the apex body of Switzerland-based banks, Swiss Bankers Association (SBA) said from Basel.

The practice of secrecy in operations of Swiss banks has always been a big political issue, with many Indians alleged to have stashed away billions of dollars in secret accounts there.

“With respect to foreign clients of Swiss banks, Switzerland will drop its traditional legal distinction between tax fraud and tax evasion and will now give international administrative assistance in all tax cases, including tax evasion,” the SBA spokesperson, Mr James Nason said. The official said that even OECD’s Model Tax Convention, on the basis of which new treaties with India and other countries would be modelled, does not permit the so-called “fishing expeditions” — meaning unwarranted, unjustified and indiscriminate trawling through bank accounts in the hope of finding something interesting. Switzerland is implementing the OECD standard, related to information exchange on tax matters, by revising its bilateral double taxation avoidance agreements (DTAAs) with over 70 countries, including India. The Swiss tax administration spokesman, Mr Beat Furrer, had said India and Switzerland had an existing DTAA with no exchange of information clause.

- Potter Harry.