Swiss bank accounts: Notices to Indian clients continue; P Rajamohan Rao latest

Amid a continuing crackdown on Swiss bank account holders with suspected illicit money, Switzerland has stepped up its process to share details of such individuals with Potluri Rajamohan Rao being the latest Indian national to get a notice in this regard.

At least 14 Indians, with accounts in Switzerland-based banks, were issued notices by the Swiss authorities last month, in which they have been given one last chance to appeal against sharing of their details with India.

According to officials, many more such notices are in the offing in the coming weeks as India has sought details about a large number of Indian clients of Swiss banks who are suspected to have indulged in illicit financial activities. The latest such notice was issued to one Potluri Rajamohan Rao on May 28, asking him to file an appeal, if any, within ten days in connection with the administrative assistance sought by the Indian authorities.

In the preceding week, at least 11 such notices were issued on a single day, May 21, to various Indian clients of the Swiss banks, as per the Swiss government gazette notifications. Switzerland has been striving hard to re-establish its global financial centre position after clamping down on secrecy walls of its banks and there has been a significant surge in the number of cases where it has initiated process to share information on Indians with Swiss bank accounts.

Except for his date of birth (July 15, 1951) and his Indian residency, the notification issued by the Federal Tax Administration, Switzerland, did not disclose any further details of Rao. However, officials said Rao has been associated with various businesses in southern states of India, including in the telecom business.

An analysis of the notifications issued by the FTA, the nodal department for sharing of information on foreign clients of Swiss banks, shows that the Swiss government has stepped up its efforts in sharing such details with a number of countries in the recent months, but the surge in India-related cases is noticeable in the past few weeks. However, the gazette notifications of the Swiss government has redacted full names for several of them while making public only their initials besides the nationality and the dates of birth.

The Indians whose names have been mentioned in full also included Krishna Bhagwan Ramchand, Kalpesh Harshad Kinariwala, Ratan Singh Chowdhury, Kuldip Singh Dhingra and Anil Bhardwaj. However, no further details have been disclosed about them as well.

In these notices, the individuals or their authorised representatives have been asked to file their appeals, if any, within 30 days (10 days in some cases) with necessary documentary proof to support their case against providing administrative assistance to India, which broadly means sharing of their banking and other financial details. Several of these names are said to have figured in the leaked HSBC lists and Panama papers which allegedly contained names of Indians with Swiss bank accounts and are being probed by Indian authorities in alleged black money cases.

While some notices were issued in April also, Switzerland had issued such notices in March to Mumbai-based Geodesic Ltd and its three directors (Prashant Sharad Mulekar, Pankajkumar Onkar Srivastava and Kiran Kulkarni), as also to Chennai-based Aadhi Enterprises Pvt Ltd, who are being probed by the Indian authorities for alleged money laundering and other financial irregularities.

Switzerland was widely known as an alleged safe haven for black money before it bowed down before the global pressure and agreed to bring down the famed secrecy walls that had historically surrounded the Swiss banks, provided the requesting country gave proof for financial irregularities done by the concerned person or the company. Along with several other countries, India has also been making use of this change in the stance of Switzerland by seeking details of suspected black money hoarders in Swiss banks and it has already got back information in a large number of cases in the last few years.

While the Swiss government documents did not disclose specific details related to the information and assistance sought by the Indian authorities regarding these Indian companies and individuals, such an administrative assistance follows submission of proof about financial and tax-related wrongdoings and typically involves sharing of information relating to bank account details and other financial data.

While Switzerland has always denied being a safe haven for black money, it has begun sharing details for last few years with several countries including India after submission of evidence about financial and tax-related wrongdoings of the clients of Swiss banks. Besides, a new framework of automatic information exchange has been now put in place and the details can be accessed under the new system from this year.

According to Switzerland’s State Secretariat for International Finance, the global standard for the automatic exchange of information (AEOI) on financial accounts is expected to increase the transparency and prevent cross-border tax evasion. The global standard makes provision for the mutual exchange of information on financial accounts between states and territories that have agreed among themselves to the AEOI. Besides Switzerland, over 100 states and territories, including all major financial centres, have declared their intention to adopt the standard.