• Finance minister is misleading the country on black money foreign bank account holders • NDA government must tell the nation why it moved the SC seeking modification of 2011 judgment • 19 year old agreement with Germany can’t be used as an excuse to bail out illicit account holders • SC rejected the same argument when it was made by the UPA government in 2011 The Aam Aadmi Party completely disagrees with the claim of union finance minister Mr Arun Jaitley that the Double Taxation Avoidance Agreement signed between India and Germany in 1995 restricts the government from revealing the names of holders of the illicit foreign bank accounts. The Indian government has been in receipt of two substantial sets of information of foreign bank holders of illicit money. One pertains to banks in Liechtenstein and other of HSBC Bank branch in Switzerland. With regards to the information pertaining to bank accounts in Liechtenstein shared by the German government, the Supreme Court of India in its judgement on 4th July 2011 has made it amply clear that the argument about India’s 1995 agreement with Germany prohibiting any disclosure of relevant documents and details, does not hold. The Supreme Court found no merit in the claim being repeated by Mr Jaitley now, and it had stated in para 56 of its judgment :“We have perused the said agreement with Germany. We are convinced that the said agreement, by itself, does not proscribe the disclosure of the relevant documents and details of the same, including the names of various bank account holders in Liechtenstein.” The Supreme Court went on to analyse the clause of the agreement which the government is pleading to be a hindrance for disclosure of information. Extract of para 58 of the judgement states :“The above clause in the relevant agreement with Germany would indicate that, contrary to the assertions of Union of India, there is no absolute bar of secrecy. Comity of nations cannot be predicated upon clauses of secrecy that could hinder constitutional proceedings such as these, or criminal proceedings”. It further stated in para 72 of its judgement: “We have perused the documents in question, and heard the arguments of Union of India with respect to the double taxation agreement with Germany as an obstacle to disclosure. We do not find merit in its arguments flowing from the provisions of double taxation agreement with Germany.” Another claim made by Mr Jaitely is that Germany has objected revelation of names pertaining to Liechtenstein. This argument also is not true since this information pertains to Liechtenstein, which is an independent sovereign state. The 1995 agreement between India and Germany has neither any jurisdiction nor any authority over information pertaining to banks of Liechtenstein. Here is an extract of Para 56 of the judgement: In the first instance, we note that the names of the individuals are with respect to bank accounts in the Liechtenstein which though populated by largely German speaking people, is an independent and sovereign nation state. The agreement between Germany and India is with regard to various issues that crop up with respect to German and Indian citizens’ liability to pay taxes to Germany and/or India. It does not even remotely touch upon information regarding Indian citizens’ bank accounts in Liechtenstein that Germany secures and shares that have no bearing upon the matters that are covered by the double taxation agreement between the two countries. It is also pertinent to note that the successive Indian governments have never ever revealed any evidence, either in court or otherwise, to effect that the German Government objects to sharing of information. This was also remarked by the SC in Para 59: the Union of India did not provide any evidence that Germany specifically requested it to not reveal the details with respect to accounts in the Liechtenstein even in the context of proceedings before this court. With regards to the sharing of information pertaining to HSBC Switzerland, the United Nations Convention Against Corruption (UNCAC) mandates the signatories to the convention to take several steps to help eradicate the problem of money laundering from the global economy. Both India and Switzerland are signatories to the UNCAC which emphatically empowers the two countries on following counts: a. UN Convention Against Corruption gives full sanction to make simple changes in the laws of our country to tackle black money menace permanently b. UN Convention Against Corruption overrides ‘bank secrecy laws’ c. UN Convention Against Corruption empowers to freeze, seize and confiscate illicit money d. UN Convention Against Corruption on Mutual Assistance by different tax jurisdictions Therefore the remarks made by Mr Jaitley to the media on Friday – about the Indian government achieving a breakthrough with the Swiss government, with the Swiss Federal tax authorities now agreeing to confirm genuineness of documents, and initiation of discussion on a bi-lateral agreement between India and Switzerland on automatic exchange of information- were long ago well established by virtue of UNCAC. It is also pertinent to note that the provisions of the DTAA, which are being repeatedly pleaded as the sole reason for central government’s inability to share information don’t quite apply in the case of HSBC bank account details possessed by Indian authorities, as it was not made available to Indian authorities by the sovereign government of Switzerland. It was made available through other informal channels and therefore it does not fall under the ‘Exchange of Information’ clause of the Double Tax Avoidance Agreement between India and Switzerland. It is shocking that the Narendra Modi government which came to power with the promise of bringing back black money stashed in foreign banks within 150 days of assuming office has done a complete volte face and its excuses for inaction on the issue present a mirror image of its predecessor, the UPA government. (ENDS) Regards. AAP Media Cell
Posted on: Sat, 18 Oct 2014 14:52:12 +0000
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