Saturday, April 18, 2009

Measures to bring back Indian money from Swiss banks – Interim report.



From the Statement issued by Shri LK Advani at press meet in Mumbai on Swiss accounts Task Force report

Friday, 17 April 2009


At my New Delhi press conference, I had stated that a future BJP-led government at the Centre, if elected, would bring India's sovereign wealth back from foreign shores and use it for various ambitious developmental projects. I had also announced the formation of a Task Force to recommend specific steps that a future government may take to translate our promise into reality.


I am pleased to announce that the
Task Force has submitted its recommendations in the enclosed interim report. I sincerely thank members of the Task Force — Shri S. Gurumurthy (Chartered Accountant and investigative writer, Chennai); Shri Ajit Doval (Security expert, New Delhi); Dr. R. Vaidyanathan (Professor of Finance, Indian Institute of Management, Bangalore); and Shri Mahesh Jethmalani (Senior lawyer, Mumbai) — for the outstanding work they have done.


The interim report of the Task Force is useful for four important reasons. Firstly, it has placed the problem of India's wealth hoarded in secret bank accounts abroad in the context of a larger global menace, which western nations have now resolved to fight due to their own internal compulsions. Hence, it has rightly pointed out that India should become an active player in the global crusade against banking secrecy and tax havens.


Secondly, the Task Force has correctly asserted that the "fact of the loot" cannot be questioned although there may be debate on the "maths of the loot". Based on studies conducted abroad, the Task Force has mentioned that the Indian wealth in Swiss bank accounts and other tax haven may be in the range of $500 billions [Rs 25 lakh crores] and $1.4 trillions [Rs 70 lakh crores]. The credibility of these estimates is reinforced by the figure of $11.5 trillions (Rs. 575 lakh crore) officially given by the OECD (Organisation for Economic Cooperation and Development), a group of rich countries, at the G-20 Summit in London early this month as the amount of global wealth parked in various tax havens.


Thirdly, the Task Force has highlighted the casual approach of the Congress-led UPA government in taking up this important issue at appropriate international fora. Spokesmen of the Congress party have even mocked at the BJP's effort in this regard. My appeal to voters is simple: Punish the Congress that has no political will to fight corruption and crime money. The word "corruption" does not even figure in the Congress party's manifesto!


Fourthly, the Task Force has recommended
specific measures as part of the Global and National Strategies to bring back Indian money from tax havens abroad.





The important recommendations made by the Task Force are:


Global Strategy


Step I: Creating a powerful public opinion in India is a pre-requisite for global response to India's requirements in regard to unveiling banking secrecy. The world respects powerful domestic opinion on global issues. India must first realize that this is the ideal time to act and join the global crusade against secret banks and tax havens. In the absence of a broad national consensus on the issue, only a determined leader with a committed team can create the strong national will needed for undertaking this serious agenda overcoming all attempts to impede the effort. Those who do not support the move should be seen as supporters of black economy.   


Step II: India should stop being a silent spectator to the G-20 efforts against secret banking and tax havens. It must become an active player and forthwith change the perception that it is not against secret banking and tax havens.


Step III: India must immediately and effectively urge the German government to provide the details of the Indian names from the LGT bank's secret records. The BJP, if voted to power, must send a special emissary to Germany, which is willing to give the details of Indian names in the LGT bank's secret records. 


Step IV: India must strive for a coordinated global and multilateral effort, which is the only solution to undo the regime of banking secrecy.


Step V: India has special needs beyond what the West is seeking to break banking secrecy. India should work with the West to get the OECD rules on internationally agreed tax standards. That global coercive action is working is seen from that fact that the G-20 threat to blacklist Switzerland and other tax havens is already beginning to yield results.


Step VI: We recommend that India appoint a special ambassador with adequate knowledge of tax havens and secret banking issues to work with the G-20 specifically for framing India-friendly rules.




National Strategy


  1. Collection of travel information about persons visiting Switzerland and other tax havens. This should start with cabinet ministers and other high-profile political personalities.  


  1. Monitoring tax havens that have high transaction frequency with India


  1. India to become a full-fledged member of the Financial Action Task Force. 


  1. Use of financial intelligence sharing for security purposes. Illegal money is a potential source of undermining national security. Therefore, we recommend that Indian intelligence agencies should be specifically tasked to collect intelligence on this count. 


  1. Legislative support: Just as the Obama Administration is planning specific anti-tax haven laws, India should also target tax havens and secret destinations like Switzerland operating in India.  We recommend that stricter laws should place the onus of proving their innocence on the accused if a prima facie case is made out. 


  1. High Level Task Force: We recommend that the Government of India should constitute a high level Task Force with representatives from Finance Ministry, National Intelligence Agencies, Ministry of Law, RBI, SEBI, Economic Intelligence Units, Central Vigilance Commission, CBI and other experts to collect and process the information and start legal action wherever feasible. As large-scale kickbacks are reported from purchases made by some of the Ministries like Ministry of Defence, Ministry of Civil Aviation etc., their representatives could also be co-opted wherever necessary. 


  1. The history of the illicit wealth holders should be brought out: We recommend that when India is able to unveil the banking secrecy through information sharing arrangement, it should get the names and amounts not just as of today but for the entire economic history of the account-holders.



To read the full text of the interim report:-



Related post :- (article by Prof R.Vaidyanathan)








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