New pact to help India trace black money

As India and Switzerland prepare to renegotiate the Double Taxation Avoidance Agreement, the Swiss government said it was confident that the pact would be finalised by next year and enable New Delhi to seek details about black money stashed in banks there.

"Yes" was the emphatic answer of Switzerland's vice-president Doris Leuthard, when asked whether renegotiating the treaty, which was signed in 1995, would enable India seek details of specific cases where tax evaders' money was lying in Swiss banks.

She said she was confident of a positive outcome from the talks that were to begin in December.

"I think this new treaty can be accomplished next year," Leuthard, who was here for an informal WTO ministerial, said.

Leuthard said she had "good talks with India on tax matters".

On the Swiss Bankers Association's stance that India was not welcome there on a name-fishing expedition, she said no country in the world would allow such an activity.

"Fishing expedition is not allowed (anywhere in) the world. We have the OECD standards. We follow international rules... We do not protect crime," Leuthard, who is also Minister for Economic Affairs, said.

Leuthard said India would have to apply through legal procedures, based on the existing double taxation avoidance treaty, if it had demands about specific cases of tax evasion.

"We already have a treaty with India. It only works if there is a concrete demand from Indian authorities. The demand must follow principles of the treaty," she added.

Asked why Switzerland was not entertaining India's request, when it had already given account details of a large number people to the US government, Leuthard said: "The US had a concrete demand. Legal procedure was already underway. These were all clients, which cheated the authorities, and we never cover (up) fraud."

Switzerland had last month reached an agreement with the US to give that country's Internal Revenue Service the details of 4,450 clients Washington suspected of evading taxes.

The issue of bringing back black money stashed in Swiss banks had become a hot topic during the Lok Sabha elections earlier this year, and the Supreme Court is also hearing a public interest litigation accusing the government of inaction in bringing the money back to India.