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Swiss cite India's strong data security laws for auto-sharing banking info

By PN Team Posted on Aug, 06 2017

Switzerland found India's data security and confidentiality laws "adequate" for entering into an automatic exchange of information pact, which will open a continuous access to details about alleged black money hoarders in once-all-secret Swiss banks.

 

In a detailed notification and fact sheet published in its official gazette for introduction of "automatic exchange of information relating to financial accounts with India", the Swiss government has also cited decisions by other financial centres like Liechtenstein and Bahamas to enter into similar pacts. 

Besides, Switzerland also took note of the US tax authority, the Internal Revenue Service (IRS), recognising India among the countries that provide an "adequate degree" of data protection for mutual exchange of tax information. 

The fact sheet and the notification, published in German, also talks about Switzerland looking to explore greater access to Indian market, including the reinsurance sector and other financial services. 

The Swiss Federal Council, the top governing body of the European nation, in June ratified automatic exchange of financial account information with India and 40 other jurisdictions to facilitate immediate sharing of details about suspected black money even as it sought strict adherence to confidentiality and data security. 

The issue of black money has been a matter of big debate in India, and Switzerland has been long perceived as one of the safest havens for the illicit wealth allegedly stashed abroad by Indians. 

In the fact sheet about India, which forms part of the notification about all 41 jurisdictions selected for AEOI by Switzerland, the Swiss government noted India showed its commitment for implementing the international pact with effect from 2016 itself and "adaptations of the internal laws necessary for the implementation were made in good time". 

"All agreements concerning the exchange of tax information concluded by India contain a confidentiality clause which corresponds to that of the model OECD agreement," it noted, while adding that the country's Income Tax Act contain other confidentiality provisions as well. 

Nonetheless, they are interested in taking advantage of improved governance conditions and greater legal certainty in the financial services sector, particularly in the reinsurance sector. 

Switzerland said the two countries have committed to improve the framework conditions for cross-border business activities to give a boost to international investment and financial services segments. 

 

(Inputs from ET)

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