Blackmoney: India to hold direct talks with tax havens, others

Indian tax authorities and investigators probing black money cases have decided to hold one-to-one meetings with their overseas counterparts based in tax haven nations and other countries to "deepen" cooperation in the fight against illicit funds stashed abroad.

As part of the measures to combat the menace, investigators have also received a new dossier on tax-related business information on about a dozen entities whose names were reported by an international group of investigative journalists sometime back.

The Union Finance Ministry, after due consultations with the Special Investigation Team (SIT) on black money and various financial probe agencies, has decided that a team of senior officials will be tasked to hold bilateral meetings with foreign jurisdictions either in India or at the location of the respective counterparts, to thrash out issues quickly.

"The step is aimed to cut down on the time taken in paper-based documentation and communication in cases of illegal funds stashed abroad. A team of senior officials drawn from the Ministry and its various field formations will hold meetings and put across requests related to probe in these cases right on the discussion table. The required sanctions in this regard have been obtained from the government," a senior Finance Ministry official said.

An official communication prepared in this regard by the Central Board of Direct Taxes and reviewed by the SIT underlines the need for having the new mechanism.

"Bilateral discussions, including through conference calls and face-to-face meetings with the competent authorities of our treaty partners which now include well known tax havens and offshore financial centres such as British Virgin Islands, Jersey, UAE and Singapore are being planned and the cooperation in this regard will be deepened in future.

"These bilateral meetings will help India in making targeted and specific requests for information and to understand the problems, if any, which prevent them in providing the information, and to examine how the same can be addressed," the note, accessed by PTI, said.

While about three such meetings have already taken place, the official said, about half-a-dozen are already lin

The note also mentions that "certificates ofincorporation" of eleven entities listed in the International Consortium of Investigative Journalists (ICIJ) report which were received from two foreign Financial Intelligence Units have been shared with CBDT for further action.

The ICIJ brought out these names early last year while some additional details were published by the global group this year on suspected world entities holding assets and shares in overseas business structures, including those with Indian connections.

The SIT on black money has early this month submitted its latest report to the Supreme Court to inform it about the development in various probes related to black money which included the development that the I-T department has launched 121 prosecution cases against those whose names had figured in the much talked about HSBC list.

The note added that the probe in cases of about 600 suspect names and addresses which were obtained by the Central Economic Intelligence 

Bureau (CEIB) last year through its exclusive channels is "in progress."

The official communication also reported the enhancement in cooperation between India and Switzerland on these issues, a fact mentioned by Finance Minister Arun Jaitley quite a number of times in the past.

"Switzerland has indicated willingness to provide information in respect of cases where investigations have been carried out by the I-T department independently from what Swiss government considers as stolen data. This development is very significant because there are a number of cases of account holders included in the HSBC list which were investigated by I-T department independent of the HSBC list obtained from the French government.

"Earlier, the Swiss government had not agreed to provide any information on names which were included in the HSBC list on the ground that these were stolen data and have been obtained in breach of Swiss law," it said. Post the visit of a high-level officers delegation to the alpine nation in October last year, the note said, the "Swiss Federal Tax Administration has agreed that their competent authority would assist India in obtaining confirmation of genuineness of bank documents on requests by the Indian side and also swiftly provide information on requests relating to non-banking information. This willingness on the part of the Swiss authorities would help in our tax investigations."

"The Swiss authorities have also agreed to provide the requested information in a time-bound manner or else indicate the reasons why the cases cannot be answered within the agreed timeline.

"Switzerland has also assured that they would commence talks with India for concluding an Automatic Exchange of Information (AEOI) Agreement between India and Switzerland at the earliest, after completion of their domestic procedures. This is the first time that Switzerland has agreed to commence discussions on a bilateral agreement on AEOI," it said.