With close to 70 lakh crores ( 70,000,00,00,00,000 ) of unaccounted public money stashed by politicians, bureaucrats and the rich in swiss banks and the like abroad, how does one get hold of that money ? The answer probably could be the latest writ petition in the Supreme Court wherein the petitioners have asked the Court to interfere in compelling the government to take actions to get the money back to India. While it is a noble cause, I opine that the Supreme Court interfering in this may not work.
To understand, let’s take the case of Germany and LGT Bank of Liechtenstein. In January 2006, the German Government offered 5 million Euros to a bank officer of LGT bank asking him to give out confidential data of the clients and accounts of LGT bank. After a successful transaction in this regard, the German Government then went on to catch of the tax evasionists responsible and started prosecuting them. The amount of fraud is said to have exceeded 5 billion Euros now.
In its aftermath, the bank officer has been offered asylum in Germany and the German Government is now putting pressure over the European Union and the OECD to take measures into compelling these banks to be more transparent. In times of recession, this may be fruitful, but nevertheless, none of these banks can be compelled to give up the money that they own. (See timeline and EU Actions here)
Coming back to India, if we are to create a parallel to the German situation, the following issues would arise;
– Can the Indian Government pay somebody to do an illegal act in another country ?
– Going further, can the Court issue a writ of Mandamus to ask the Government to do such an illegal act?
– Even if the above can take place, there is no way of recovering the money but only to use the data to prosecute those for tax evasion. Neither the executive or the judiciary can do otherwise.
While one possible solution could be that while prosecuting these tax evasionists/ those holding up the money in these accounts, we offer them an immunity as an incentive if they get back the money; this could possibly lead to litigation and a replay of the Bearer Bonds case (RK Garg v. Union of India , 1979 SC). In the sense that, Indians charged for evasion in India would allege that this is arbitrary, unfair and against the mandate of Article 14 and is creating a difference between those stashing money abroad and evading income tax and those being prosecuting for evading income tax in India.
This is a complicated issue and I don’t think the Court’s can and should interfere. In the debates conducted, the speakers did come together on the fact that the Constitution does authorize the Court to interfere and ‘make law’ but they still agreed that it must keep out of policy matters and things it expressly cannot do and implement. It would then be interesting to see the way the Court handles this PIL.
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May 4, 2009 at 5:44 pm
Kaushik Saha
This is imp mail, a reply from a Swiss banking association to query sent by an uncle of mine.You should hear him, U will LOL
Read my analysis below
Subject: AW: swiss bank
Date: Thu, 30 Apr 2009 12:06:36 +0200
From: James.Nason@SBA.CH
To: deepakmitra@hotmail.com
Dear Mr. Mitra,
Many thanks for your mail of 30 April 2009.
We have had many inquiries from India concerning a report we are supposed to have issued in 2006 with the amount of funds Indian citizens have with Swiss banks. I believe this canard was originally launched in a report broadcast by CNN-IBN around April 2008, but I have not been able to confirm this.
I would like to make it clear that the Swiss Bankers Association has never issued a report with figures about the funds of Indian clients at Swiss banks. We simply do not have such figures. In the run-up to the current elections in India I note that some incredible figures were bandied about in the Indian media as though they were gospel truth. In fact, any figures mentioned in this context are at best pure speculation, and at worst pure fantasy. Nobody has explained the methodology used to obtain the figures now being thrown around.
We take all our statistics from the Swiss National Bank (Switzerland’s central bank http://www.snb.ch ). The Swiss National Bank’s figures about assets under management (actually the value of securities held in custody accounts) in Switzerland are not broken down according to the nationality of clients. There is a country-by-country breakdown of the balance sheet assets and liabilities of Swiss banks (which is something entirely different), but these figures would include government, central bank, commercial bank, corporate and commercial assets and liablilties and not just private client money. Contrary to what some journalists and commentators have alleged, this has absolutely nothing to do with Switzerland’s bank-client confidentiality law; it’s simply the way the Swiss central bank collates and presents the statistics.
May I take this opportunity to ask you a question? Is the fuss about what is being called “black money” due to the fact that the money has been illegally acquired (e.g. from corruption or other crime) or to the fact that it has been illegally transferred abroad? If the money is being transferred abroad illegally, why do the authorities not stop Indian banks from making international wire transfers of funds? I can’t imagine money is being sent abroad by carrier pigeon – it must be going through the banking system.
Many thanks and kind regards,
James Nason
Head of International Communications
Swiss Bankers Association (SBA)
Aeschenplatz 7, P.O. Box, 4002 Basel, Switzerland
Tel. + 41 61 295 93 93
Fax + 41 61 272 53 82
E-mail: james.nason@sba.ch
http://www.swissbanking.org
MY ANALYSIS to my uncle
Dear Kaku
People are also talking about the Swiss banks.
1)The Supreme court is dissatisfied by the centre’s affidavit to the PIL on black money in Swiss banks. The apex court was given a sealed document along with the affidavit by the centre. The court believes that hardly anything has been done.and given them till July.
2)Congress is upset things kept coming up this late, they should have been alert, just as in the case of 26/11.
God willing things will change till July.
3)The Congress Govt figure Reema Khan’s 72000 crore account were part of the open details given by the centre in this same PIL case, as some work done on the Swiss bank black money. You still need proof or u do not believe Congress & its Govt.or you would believe the flip flop of the Swiss association who are still living of blood money from the Nazis. By the way many of those Nazis still have Interpol red corner notices without trial since World War II.
4)Pl ask the naive (sic) Mr Nason he has not heard of arms deals , govt contracts,export frauds arms and the Swiss banks accept cash money.HOW innocent he missed that one.
5)Nason say” There is a country-by-country breakdown of the balance sheet assets and liabilities of Swiss banks (which is something entirely different), but these figures would include government, central bank, commercial bank, corporate and commercial assets and liabilities and not just private client money”
The world highest deposits in Swiss banks $ 145 trillion are Indian nationality, more than USA, UK,China, all Europeans countries,Saudis, Arabs states,even the Russian and their Mafia. .$ 145 trillion belonging to Indian govt, RBI, Indian banks, Indian corporates lie in Swiss Banks.You would like to believe that.they have special interest rates for INDIANs!!!!!
I have forwarded your note from Nason to Jethmalani and entire blogs following this issue.MR Nason would have to hole up in the Alps
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August 3, 2010 at 4:38 am
Vijay Agrawal
A timely post that touches upon an issue that our leaders feel convenient to forget. There is no will to get the money back in any quarter that can make a difference.
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April 7, 2016 at 5:12 am
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After a successful transaction in this regard, the German Government then went on to catch of the tax evasionists responsible and started prosecuting them.http://lawgupshup.com/category/articles/interviews/I hope it reaches your targetted audience. all the best thank you.
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