Govt has not done enough: Switzerland’s Ambassador

Aniek Paul, LIVEMINT, Posted: Tue, Mar 29 2011. 1:00 AM IST

Switzerland’s ambassador to India, Philippe Welti, said India has not done enough to obtain information from his country’s banks on money laundering despite the public outrage over it.

It was not “fair” to see Swiss lenders as protecting criminals by not co-operating with Indian law enforcement agencies, Welti said on Monday.

India must file “legitimate requests” with Swiss authorities for banks to release data on illegitimate money allegedly stashed away in numbered accounts, he said. “Check with your government how many requests have been filed,” Welti said. “I don’t want to say more.”

He dismissed claims made in Parliament and in petitions filed with courts that up to $1.43 trillion (`64 trillion) of black money was stashed away in Swiss banks. “The figure is unimaginable, it is a complete fantasy,” he said.

Swiss banking secrecy laws are not intended to “protect criminals” and “commercial profits” from being taxed, Welti said. But for India to gain access to data, it must file requests with some evidence in support of its claim. “We aren’t asking governments to prove the charges; we are only asking them to make the claim plausible,” he said.

Earlier Switzerland would readily share data on “tax frauds” such as money laundering. Under a treaty signed with India in August, which is to be ratified by the Swiss parliament “within weeks”, even tax evasions qualify for “data release”, according to Welti.

“But here we aren’t talking about tax evasion only, we are talking about tax frauds such as money laundering,” Welti said, undermining the Indian government’s argument that Swiss authorities weren’t willing to share data from its banks under the double-taxation treaty.

To illustrate Swiss authorities took proactive steps in seizing illegitimate money, Welti said his government had already “blocked” the assets of Hosni Mubarak, the deposed president of Egypt, “anticipating claims from successors” who form a “legitimate government”.

Under an ongoing investigation, the Enforcement Directorate (ED) has been claiming businessmen Hasan Ali Khan and Kashinath Tapuriah have accounts in Swiss banks, and at least one of them has been blocked by the Swiss authorities because around $300 million came from the world’s most notorious arms dealer Adnan Khashoggi with a tag from the remitting US bank saying “proceeds from arms sale”.

Officials of the directorate, which investigates economic crime, have made several trips to Switzerland in the past four years and have requested Swiss authorities to release data from the bank accounts of Khan and Tapuriah.

Defending the Swiss government, Welti said it wouldn’t entertain requests filed by investigating agencies such as the ED, income-tax department and the Central Bureau of Investigation. Such requests must be routed through the government under “procedures decided in the treaty” signed in August, he said.