Is India a poor Country- Revelation on Swiss bank accounts
Don’t know how far this is true, but a friend of mine forwarded me this
This is so shocking…….wish black money deposits was an Olympics event….India would have won a gold medal hands down. The second best Russia has 4 times lesser deposit. US is not even there in the counting in top five !! India has more money in swiss banks than all the other countries
combined
Recently, due to international pressure, Swiss govt. agreed to disclose the names of the account holders only if the respective govts formally asked for it. Indian govt. is not asking for the details…….no marks for guessing why ????
We need to start a movement to pressurize the govt. to do so !! this is perhaps the only way, and a golden opportunity, to expose the high and mighty and weed out corruption !!
Please read on……and forward to all the honest Indians to…..like somebody is forwarding to you…….and build a ground-swell of support for action !!
Is India poor, who says? Ask Swiss banks With personal account deposit bank of $1500 billion in foreign reserve which have been misappropriated, an amount 13 times larger than the country’s foreign debt, one needs to rethink if India is a poor country?.
DISHONEST INDUSTRIALISTS, scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $ 1500 billion, which have been misappropriated by them.
This amount is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each. This huge amount has been appropriated from the people of India by exploiting and betraying
them.
Once this huge amount of black money and property comes back to India , the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, we will have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central government. So even if all the taxes are abolished, then also the Central government will be able to maintain the country very comfortably.
Some 80,000 people travel to Switzerland every year, of whom 25,000 travel very frequently.
“Obviously, these people won’t be tourists. They must be travelling there for some other reason,” believes an official involved in tracking illegal money. And, clearly, he isn’t referring to the commerce ministry bureaucrats who’ve been flitting in and out of Geneva ever since the World Trade Organisation (WTO) negotiations went into a tailspin!
Just read the following details and note how thesedishonest industrialists, scandalous politicians, corrupt officers, cricketers, film actors, illegal sex trade and protected wildlife operators, to name just a few, sucked this country’s wealth and prosperity. This may be the picture of deposits in Swiss banks only. What about other international banks?
Black money in Swiss banks — Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries:
Top five
India—- $1,456 billion
Russia —$ 470 billion
UK ——-$390 billion
Ukraine - $100 billion
China —–$ 96 billion
Now do the maths - India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. Public loot since 1947:
Can we bring back our money? It is one of the biggest loots witnessed by mankind — the loot of the Aam Aadmi (common man) since 1947, by his brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen.
The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear.
What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth.
Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens. However, one may well be aware of ‘Swiss bank accounts,’ the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.
In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.
In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe.
The findings estimated that a large proportion of this wealth was managed from some 70 tax havens.
Further,augmenting these studies of TJN, Raymond Baker — in his widely celebrated book titled ‘Capitalism’ s Achilles Heel: Dirty Money and How to Renew the Free Market System’ — estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.
It is further estimated by experts that one per cent of the world’s population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens. How much of this is from India is anybody’s guess.
What is to be noted here is that most of the wealth of Indians parked in these tax havens is illegitimate money acquired through corrupt means.
Naturally, the secrecy associated with the bank accounts in such places is central to the issue, not their low tax rates as the term ‘tax havens’ suggests. Remember Bofors and how India could not trace the ultimate beneficiary of those transactions because of the secrecy associated with
these bank accounts?
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please post the source for your numbers. I don’t believe this. Where did swiss bank publish this information that you are claiming[...]
I am a Lead Economist working for a think tank, Global Financial Integrity, Center for International Policy in Washington DC. Prior to my current job, I was a Senior Economist at the International Monetary Fund; I retired from the IMF in September 2005 after a long career spanning nearly 32 years. I am presently researching the issue of capital flight from developing countries. According to my model estimates, India ranks as one of the top ten countries in the world in terms of the sheer volume of illicit financial outflows. I am not surprised by the Swiss bank deposit figures.
Thank You, Dev Kar, for your valuable comments!
The Swiss Bankers Association has never published a report with such figures. Please identify the source precisely.
James Nason
Head of International Communications
Swiss Bankers Association
Basel
Switzerland
Dear James,
I don’t verfiy the authenticity of this article.
If you read the article the opening line says - “It was forwarded by a friend and I don’t know how far this is true.”
Thanks for your comments, they are well appreciated.
It is only proper you name the source of your information.or what authority he is quoting?
We know a certain G and a certain X and Y and Lotus and Tulip had accounts in swiss bank - the money looted in Bofors scandal.Indians holding account is not surprising and the amount also does not surprise me.And Rajesh if you get the names also -no use?What can you do?Unless you start a mass movement to break the back of the government.
This info is ridiculous, but seems to be true.
The Central Vigilance Commission (CVC) has reminded the government to ratify the UN Convention against Corruption (UNCAC) that would help the country seek return of its assets seized in foreign jurisdiction besides unravelling many cases of alleged embezzlement and bribery and finding the identities of actual beneficiaries.
Sources said this was the second reminder since German authorities early this year expressed their willingness to share information on some rich Indians who had parked black money in a Liechtenstein bank. The German government had obtained a list of account holders at Liechtenstein`s LTG Bank that included some Indians. It had expressed willingness to part with the names if the Indian government approached it through formal channels.
However, despite the CVC reminders, there seems to be little or no progress in this direction. The CVC is peeved at the lacklustre response of the government which is taking the premise of not having ratified the UNCAC due to which it is difficult to put in a formal request for return of assets seized in foreign countries.
India is a signatory to UNCAC which came into being in December 2005, but it is yet to ratify the convention that would help it in seeking return of its money seized in foreign banks. UNCAC provides for seizure of any proceeds of crime, including those related to bribery and embezzlement, cutting across borders. The convention facilitates freezing of all such tainted money and ensure that it is returned to the country where it rightfully belonged. Pakistan, Sri Lanka and Bangladesh are among the 117 countries that have ratified the convention while India is still dithering on the issue. After ratification of the treaty, it would help India not only recover tainted money seized in foreign banks linked to its citizens but would help in getting information from foreign jurisdiction without much formalities.
The CVC, in its recent communication, specifically reminded the government on the benefits of Article 43 and 51 of the UNCAC. While Article 43 helps in getting cooperation from member countries
I don imagine this much money would be deposited,yet we all have the rights to ask the citizens who
deposited there about the source.
Guys,
Its all their personal money. It doest make sense if we fight for it. Suppose if they have seposited the above said moneys, then they must know how to retrive it safely from Swiss Account….
I can’t value of this money in INR. If any one knows what is the value of INR for $1,456 billion. Can we bring back our money? If we bring back this money in India, we can develop our country better then USA.
GOD MUST BE SAVE INDIA
I had an exchange of e-mails with Mr. Nason on the deposits of Indians in Swiss Banks. He says that the figure of $1,456 billion is fictitious. I requested him to provide the actual number but he declined saying that the Swiss Banking Association cannot divulge the figure because it needs to protect client confidentiality and banking secrecy laws. These arguments against more transparency are not convincing to say the least. How can aggregate data on country deposits take away from client confidentiality–I am not asking for deposit data on individual accounts. I reminded Mr. Nason that so long as Swiss Banks continue to engage in practices that do not promote transparency, the rumor mills will keep on running at full speed.
Dev, I agree that aggregate data on country deposits can be published even voluntarily by Swiss Banks which does not affect any of their client confidentiality. But a correct pressure from the Govts is the right way to get authentic information to the public in this case. Which department in India should request for these information, any Idea - Any one ?
Dear Dev Kar,
Why do you lie about our email exchange of September 2008? I said nothing of the sort. Please quote the real explanation I gave you in my mail for the absence of such figures.
James Nason
Head of International Communications
Swiss Bankers Association
Basel, Switzerland
I have been hearing about swiss bank since very long. I have heard my Grand father discussing on this atleast 18 years back. he used to talk abt indira gandhi and rajiv gandhi having swiss bank accounts. No wonder that it would have grown to this huge amounts by now. i have heard that swiss banks also have many presious stones in their lockers deposited long back now there is no way to get them back due to many reasons. Nobody in India pays tax to goverment honestly it is because the government is not run by honest people. every body want their country to be rich but dirty polititians eat up every thing so instead of paying tax which is of no use, people deposit in swiss bank. I live in UAE i see all other nationals go hear and there and spend their whole salary but a Indian goes directly to Western Union to Deposit Money,there is no doubt that India is No .1 in having such huge amounts. saving is in our blood we want some thing in bank to feel good. even in olden days there are somany stories about hidden tresury and they have been found in lots. it speaks all. Now getting the swiss bank money back is important, how ? 1st make it tax free. make a condition that it should be transferred to SBI to be tax free and assure guarantee of their money. then Govermnet can make use of this money as well as the people as it will be rolling within the country. if people and goverment want a piece of it forget, it will never come back to India.
We know that Indians have become tolerant to corruption and as a whole nation live with it in every step of life from the government peon to the Prime Minister. If there is atleast one honest MP/PM or President, they must take initiative to bring the list of Indians having account with Swiss bank and their source of income. If the information is not justifiable, they should try attaching the assets. Else, it is indicative the as the country Indians are corrupted. Another thought that comes to me as follows. I think, I should start a bank similar to swiss bank in India. This will atleast help to retain the black money within indian territory. There will be some job market. The money can be used to build infrastructure and improving the basic facilities in rural india such as Eduction, Health and Support for Aggriculture.
I see the reason for the figures to be true. Take example of SATYAM, Spectrum Band allocation (Rs 60000 CR Scandal and that has been put on back burner after recent merger of Dayanithi maran to DMK). Definitely, there are Bigger fish including Ruling MPs, CM etc. In every walk of Life, I see corrupted personnel. As an Indian, I am ashamed of It.
We know that Indians have become tolerant to corruption and as a whole nation live with it in every step of life from the government peon to the Prime Minister. If there is atleast one honest MP/PM or President, they must take initiative to bring the list of Indians having account with Swiss bank and their source of income. If the information is not justifiable, they should try attaching the assets. Else, it is indicative the as the country Indians are corrupted. Another thought that comes to me as follows. I think, I should start a bank similar to swiss bank in India. This will atleast help to retain the black money within indian territory. There will be some job market. The money can be used to build infrastructure and improving the basic facilities in rural india such as Eduction, Health and Support for Agriculture.
I do not lie Mr. Nason. I am reproducing the e-mail you sent me which in effect gave the reasons for not divulging deposit data in the interest of protecting “citizens’ financial privacy”. I will then post my rejoinder to Mr. Nason to which I received no response. Please see full text of Mr. Nason’s email to me below:
From: Nason James [mailto:James.Nason@SBA.CH]
Sent: Friday, September 19, 2008 8:58 AM
To: Dev Kar
Subject: AW: “Black money in Swiss banks”
Dear Dr. Kar,
Many thanks for your mail. A “Banking Barometer” is in the post to you.
What I actually agreed with was your statement that “both researchers and the general public need to verify figures used in the media before they come to have a life of their own.”
The Swiss National Bank publishes annual statistics that include a country-by-country breakdown of balance sheet assets and liabilities of Swiss banks (Table 32 on Page A104 of “Die Banken in der Schweiz 2007″ (can be consulted on http://www.snb.ch/ext/stats/bankench/pdf/deen/Stat32.pdf ) Journalists get very excited about these figures until they realise 1) that custody accounts are not included because they are off-balance sheet and 2) a lot of the figures refer to central bank, government and corporate money rather than to the assets of private individuals. So, for example, at year-end 2007 Swiss banks held CHF 0 (zero) of assets in North Korea but had CHF 3 million of liabilities to North Korea. This is obviously not the money of North Korean private clients.
I cannot, however, see what purpose would be served by publishing a country-by-country breakdown of the assets held in Swiss banks by private individuals. First of all, no country in the world does this, so why should Switzerland start? Secondly, such a publication would only fuel further speculation as the media and researchers hypothesise about the relative proportions of “white” and “black” money (just look at the speculation at Switzerland’s withholding tax revenues in the context of the EU’s Taxation of Savings Income Directive). And who is to decide on the definition of “white” and “black” money?
I believe a more fruitful approach is to examine the measures countries have taken to protect their banking systems from criminal abuse. I would claim that no country has done more that Switzerland to protect the integrity of its financial system through legislation, regulation, self-regulatory directives and guidelines and good practice. Swiss banks are forbidden by law to accept funds they know or must assume stem from crime and K-Y-C rules play a key role here. But while banks in Switzerland have been legally obliged to verify the identity of clients and beneficial owners since 1977, such a basic anti-money laundering procedure was only made mandatory in the UK in 1994. Even today constructions such as UK trusts, BVI entities and Delaware shell companies offer complete anonymity to benefical owners. Furthermore, after the terrorist attacks of 9/11 some countries not only discovered they did not even have legislation in place to permit banks to freeze assets but also realised that their banks knew next to nothing about beneficial owners. Thanks to Swiss legislation and K-Y-C rules Swiss banks by contrast were in a position to immediately search for, identify and freeze suspected terrorist assets as names were received from the US in the so-called “Bush lists”.
Finally, a few thoughts on tax evasion (unlike tax fraud, not a criminal offence in Switzerland ) I believe there’s no ethical conflict between the right of the state to enforce taxation laws on the one hand, and respect for financial privacy on the other. The Swiss system differs somewhat from the law enforcement system in some other states which do not protect their citizens’ financial privacy so strongly. These latter states prefer mandatory reporting requirements for their banks rather than the independent exercising of responsibility by the citizen which is more the way in Switzerland.
I attach a chronology of key anti-money laundering measures taken in Switzerland since 1977.
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
Following is my rejoinder to Mr. Nason’s e-mail to me.
—–Original Message—–
From: Dev Kar [mailto:devkar@gfip.org]
Sent: Friday, September 19, 2008 11:54 AM
To: ‘Nason James’
Subject: RE: “Black money in Swiss banks”
Dear Mr. Nason:
Thank you for the information you provided on which I have the following comments.
1. I am sure you are aware that the cross-border assets and liabilities of Swiss and other banks are compiled in a common format and published by the Bank for International Settlements (BIS). I am intimately familiar with the consolidated as well as “locational” international banking statistics compiled and published by the BIS and have been in touch with its professional staff on related technical issues. Unfortunately, the sectoral breakdown of bank assets and liabilities published by the BIS do not show the position of the non-bank private sector. This is obviously because countries themselves do not report such statistics to the BIS. The bottom line is that the statistical reporting system of banks (and therefore of international organizations charged with the responsibility to compile comparable international banking statistics) do not allow the mapping of capital flight from poor developing countries and into the coffers of (mainly) Western financial institutions.
2. Yet, logic dictates that outflow must equal absorption–the burgeoning capital flight from developing countries (that economic research shows) must end up in financial institutions in “developed countries”. Hence, the absorption of capital flight in “inshore” banks, offshore financial centers, and tax havens throw cold water on the contention that these institutions follow the AML/CFT regulations passed by host countries. Obviously, these regulations have not been able to curtail the absorption of increasing capital flight from poor countries. The flight of capital not only reduce the effectiveness of aid (thereby wasting tax payer’s money), they reduce the availability of capital for productive investments in poor countries.
3. Therefore, an effective solution to the growing problem of capital flight must involve better collaboration between financial institutions and regulatory agencies in both developed and developing countries. Simply passing AML/CFT regulations is not going to solve this problem.
4. Frankly, KYC rules are not sufficient to stem the absorption of capital flight either. For instance, as an Indian residing in India, I can easily establish my identity for any Swiss Bank and meet its KYC rules. I can even establish the fact that I did not obtain the funds by resorting to any criminal activity. This may be enough for a Swiss Bank to accept my deposits but the moment I transfer the funds out of India in direct contravention of applicable capital controls, those funds (even if legally earned such as from the profits of a legitimate business I own in India) become illicit financial flows or capital flight. So, there should be no ambiguity on the answer to your question “And who is to decide on the definition of “white” and “black” money”? The rules are clear–a resident Indian citizen is not allowed to own a foreign currency deposit in any country. Hence, money transferred out of India in clear and direct contravention of applicable foreign exchange regulations becomes black money.
5. The IMF’s “Annual Report on Exchange Arrangements and Exchange Restrictions 2006″ show that almost all developing countries have capital controls on the cross-border transfer of funds, some more intensive than others. Hence, it is a fair bet that the Swiss Bank deposits of private individuals who are residents and citizens of developing countries were made in contravention of applicable capital controls and therefore illegal as far as the laws of those countries are concerned. Now while Swiss Banks may say that these deposits do not violate Swiss laws, that argument would not meet the spirit of cooperation needed to stem this problem (point 3 above). The exploitation of cross-border legal loopholes by criminals and corrupt politicians call for increasing international cooperation and collaboration among all financial and regulatory parties. To the extent that capital flight reduces the effectiveness of aid, hampers economic growth, and skews income distribution, nothing less than the stability of the developing world is at stake.
Best regards,
Dev Kar
Lead Economist
Global Financial Integrity Program
Center for International Policy
1319 18th St., N.W. Suite 200
Washington DC 20036
You say that I “declined saying that the Swiss Banking (sic) Association cannot divulge the figure because it needs to protect client confidentiality and banking secrecy laws”. I do not find these words in my email. If anyone is interested in the full email exchange between Mr. Dev Kar and myself (which started on 16 September 2008 and not with this follow-up mail of 19 September 2008) please email me directly at james.nason@sba.ch
James Nason
Head of International Communications
Swiss Bankers Association
Basel, Switzerland
On January 18, Gopal wrote:
Dev, I agree that aggregate data on country deposits can be published even voluntarily by Swiss Banks which does not affect any of their client confidentiality. But a correct pressure from the Govts is the right way to get authentic information to the public in this case. Which department in India should request for these information, any Idea - Any one ?
My response is:
The appropriate GOI agency that can launch an investigation is the Central Bureau of Investigations with the support of the Ministry of Finance and the Reserve Bank of India. But the issue is not so simple. In order to lauch an investigation, the request for information from the Swiss Banking Association or the Swiss Government cannot be made in a blanket fashion, i.e, I don’t think the Indian government can say we want the list of all Indian citizens’ accounts in your banks. I don’t think international law would compell the Swiss banks or the government to comply with such a blanket request. I am not an international lawyer but I don’t think international law would support a witch hunt approach. The CBI can only request information on individual accounts if it can provide prima facie evidence that they are involved in a criminal or terrorist case. If the Swiss are presented with such a case, then they have to comply. Again, I can be wrong and this web site should solicit the input from legal experts
The bottom line to Mr. Nason’s e-mail of Friday, September 19 2008 was that the Swiss Banking Association (SBA) cannot provide the country breakdown of deposits because of what it sees as “respect for financial privacy” of its clients. According to the SBA, other states do not have such a strong sense of this respect for financial privacy. What a joke!
But that is the bottom line and that’s what he says. Can anyone who reads the full e-mail he sent me (reproduced above) reach any other conclusion? Please–I would be very interested to know. Then he has the gall to turn around and call me a liar! Wow! Why would an ex-Senior Economist of the IMF, a researcher with many years’ experience lie about the SBA? What possible motivation can I have for lying? What would I stand to gain from this lying? My point was simple–please see my rejoinder to Mr. Nason. I basically told him that lack of transparency breeds rumors so the only way to stop the rumor mill would be to promote full transparency. It’s hogwash to claim that divulging the highly aggregated deposit statistics by country would somehow compromise the “financial privacy” of its clients.
The SBA is refusing to disclose those statistics because the deposits of private individuals in foreign banks violates the domestic capital controls of most developing countries. The SBA is embarassed to admit that Swiss banks have looked the other way in facilitating the illegal behavior of the citizens of those developing countries. Not to worry Mr. Nason–the readers of this website can make up their own minds.
I must add that Swiss Banks are not the only ones that are opaque. Offshore financial centers, tax havens, and even reputed “inshore banks” registered in major industrial countries also accept flight capital from developing countries and are also opaque about their financial transactions (all in the name of protecting client privacy which rings hollow). No, the international financial system is not very transparent, there is a lack of oversight, and reporting requirements are very lax. By all accounts, lack of transparency with regard to financial transactions, beneficial ownership, and reporting requirements have played a big role in the current financial crisis. In fact, I am in the midst of research on this very topic.
Dear Dev,
The news of illegal transfer of amount to Swiss Banks from India is far more than imagination. Corruption is a sophisticated form of violation of human rights. Let me know more from you. Regards.
All,
I have made a presentation to Indian State Governments on integrating Schools - Primary, Secondary and Higher Seconday in year 2005. And Detailed study for TamilNadu state about their approx Rs.8000 Crore spending on education and how that can be better used to generate more values. The govt did respond after continuous attempts and details provided by us were discussed in TN assembly. Though we(eminentlabs) havent got any commerical project, our partner Intel got a pie. And today we see after 4 years there is lots of talk about virtual university, integrating education platform and subsidised comps from govt. Again to bring the money back from the Swiss Bank, We(lets) else I will make an honest attempt. I strongly believe that in India, everything is done for sure with a delay.
Gopalakrishnan .T
Founder and Managing Director
Eminentlabs™ Software Pvt. Ltd.
Asima:
You are right–the cross-border transfer of illicit capital is a sophisticated form of human rights abuse. That money could have been put to good use in India which is still a poor country. This hidden accumulation of wealth robs the government of substantial tax revenues which again could have been utilized to fight poverty, and improve schools and other infrastructure. The illegal transfer of capital from India further skews the distribution of income and encourages corruption by politicians and those in power. It is a form of human rights abuse.
Best wishes and regards,
Dev
Hi Gopal:
All the best wishes to you and your company.
The Global Financial Integrity (GFI), Washington DC where I work as a Lead Economist has been trying to raise public as well as government awareness against corruption in both the public and private sectors. Strong policies should be implemented to stem illicit financial outflows. The money that is lost robs the government of many opportunities to put it to good use within the country.
We at GFI very much appreciate public efforts to hold governments and the corporate sector accountable in making sure that the rich and powerful also pay their fair share of taxes and not resort to illegal means to amass wealth. Efforts are currently underway in the United States to investigate Americans who use international banks, tax havens, and offshore financial centers in an effort to escape paying their taxes.
Best regards,
Dev Kar
Scenario 1 - Tax Evation: When someone does not pay tax to the government and hides from it because of greed. Does it really belong to them/benefactors when Govt formally ask for it with Swiss Banks. What is legal tax component say if was hidden for 10 years.
Scenario 2 - Inefficiency: Govt though got the formal information from Swiss Bank - can it handle the situation when the big shots are brought on focus light.
Scenario 3 - Corruption: Govt officials who got the information pact a deal with the unaccounted swiss banks money holders - And workout on the legal loop holes in their life time.
All the above three need to discussed in detail so that we can focus on the issue. Personally to me…
Scenario 1 - Tax Evation: - need to pay a penalty with a condition to invest in the money in non commercial education/healthcare
Scenario 2 - Inefficiency: - needs public support to understand and act on the ill effects
Scenario 3 - Corruption: - Intelligence should not be traded for illegal money. And one should not justify Money is Money in whatever way it comes.
I BELIEVE THAT INDIA WILL BECOME
DEVOLOPED NATION IN 2020
by
velammal school
ashwin&hisguys
11M
2008-2009 batch
INDIA-TAMILNADU-MOGAPPAIR
this is same for indians those who are invested our money in swiss accounts plz stop and think again
Steps Planned:
1. As it is not going to be a one day/month or even a year activity I am going to meet the Law college students to form a project team and fund this project with my personal time and then with funds in the next 3-6 months from now.
2. A portal would be designed in public interest to raise all the existing cases of tax frauds on a selective 3 cases. 7th - 12th month time period estimated.
3. Learn and update knowledge with Swiss law’s which already states that “bank data can be transferred to foreign tax authorities only in clear cases of tax fraud, not tax evasion.” From 13th - 24th month fight for one case and add two more cases in the next subsequent 12 months.
4. Clients which would be the Indian nation public and eventually the govt of india will have the chance to appeal against a data transfer to reveal the others to take next bigger actions. I could not think of a time frame as it is concerned with others too… But Item 1, 2, 3 is what I am committing for.
As I was saying, Swiss banks have been hiding behind this so-called bank “secrecy laws”. Now those lwas are being challenged. Please see latest developments regarding the United Bank of Switzerland (UBS) a prominent Swiss Bank which has helped thousands of Americans hide their money in Swiss Banks in order to avoid paying US taxes. Now the US Government is suing UBS in Federal court (see story below), although UBS agreed to pay a large penalty. It is high time the Indian government also sue some of these Swiss Banks to collect on unpaid taxes in India.
WASHINGTON – Federal authorities have filed a lawsuit against Swiss-based bank UBS AG seeking the identities of tens of thousands of U.S. customers.
The suit filed in Miami Thursday (February 19, 2009) seeks to force the firm to turn over information on as many as 52,000 U.S. customers who hid their accounts from the U.S. government in violation of tax laws.
The company said it will fight in court to keep the names private, arguing Swiss bank secrecy laws shield those customers.
The lawsuit comes a day after the Justice Department struck a deal with UBS to get access to some of its customers who used Swiss bank secrecy law to hide billions of dollars in assets.
According to the government’s lawsuit, the accounts in question held about $14.8 billion in assets in the past decade.
As part of its deal with prosecutors Wednesday, the bank agreed to pay $780 million in fines and penalties.
After the settlement of the criminal case was announced, the bank’s chairman, Peter Kurer, said in a statement the firm accepted “full responsibility” for helping its U.S. clients hide assets from the IRS.
But that does not mean the bank is about to fork over information on thousands of accounts.
“This shows the big fight is yet to come,” said George Clarke, a tax attorney based in Washington who is not involved in the UBS case.
A federal judge will now decide whether the U.S. courts can force a bank to violate Swiss bank secrecy laws and provide the account information.
According to an article that appeared in the Washington Post (Heads of 8 European Countries Pledge Global Finance Changes, Monay, February 23, 2009), European leaders pledged to crack down on tax havens and offshore financial centers in advance of a summit of world leaders on April 2 in London. They said that they support tougher measures against countries and offshore jurisdictions that serve as tax havens blaming them for an assortment of problems.
“As far as uncooperative players, tax havens or areas where non-transparent business is carried out, we need to develop sanction mechanisms,” German Chancellor Angela Merkel said. French President Nicolas Sarkozy said European countries would compile a blacklist of suspected tax havens and would impose unspecified penalties to pressure them to change. “A new system of regulation without sanctions would not have any meaning,” he said.
So the bottom line is that Swiss and other banks cannot hide behind their secrecy laws to carry on business as usual in a non-transparent manner. Those who violate the tax and other laws of a country cannot hope to be shielded by the secrecy laws of countries and jursidictions that absorb deposits of illicit capital.
Just a strange thought - but wanted to share with the group.
I was travelling and saw a huge poster of Ms. Sonia, Dr. ManMohan and Mr.Rahul and just a strange thought relating to this msg thread popped up that “If Rahul Gandhi heads this group of legal people and then makes a movement to bring everything to light - would not he full fill his fathers dream of a RICH and VIBRANT Indian nation”. Anyway lets not depend on anyone - lets put our honest efforts - may be he would take few months and we shall take few years. Note: I hope our generation and the future generations would not be any political party supporters - and they would just believe in hardwork and good guys like Dr Kalam, Dr Vajpayee and Dr Manmohan - whichever party they are.
This is a great article to think about the part, young generation is missing. I dotn knwo If God can save the country but we people can do something like Gopal and other guys who take initiative. I agree with you Gopal also on that young generation is not going to support any political party, it will be just good guys.
We’re all aware that there are crooks in India who loot the common Indians and fill up their account in Switzerland.
They can be a lesser degree bastards if they keep their money spread across banks in India rather than give it to the rich European country. Even black money, but it could help the Indian banks and finally common Indians.
The root of all this evil is the Indian political system. I am a young man of 32 years age and would love to be a politician and serve the nation but there’s no way I can reach there. If I have to get into the politics, I will have to kill few, be in jail for few years, be a double-entendre, crookedly smart, risk my life(and family), blah blah blah … Point is, our system is so much into marsh that any good and positive humans would want to stay away; and that’s how India is degrading.
We’ve the halucination that India is growing at 8% or 9% or gazillion % per year; I’m sure all those figures are tampered too. It’s all politically manuered and manufactured to suit those illiterates/uneducated at the top. If there’s somebody at the top who would want to do good (like Manmohan Singh), they are helpless and powerless.
Middle-class income group folks pay hefty taxes and millionaires/billionaires don’t pay a dime by showing business losses; this is really ridiculous.
The population of India is growing one United States in every decade and we’re not checking it; that’s alarming. I’m not blaming them, but Muslims tend to keep dozens of kids and a man can have multiple wives, no matter how their family is doing - their motto is - “spread their religion - at the cost of their personal family lifestyles and at the cost of country/world”.
Our system and configuration sucks. I don’t know how and who can revive it. We need some cosmic/divine intervention.
India will never be a developed country because of this whole bunch of totally CORRUPT politicians and government officials. Everyone from the street sweeper to sewer maintainer to a nurse in govt hospital to land records office to transport office to ministers to police constable to police officer to health inspector to income tax official to a government doctor to a person managing the mortuary asks for bribe. Going to a government office/official is the most unpleasant and stinky experience for any citizen there. God bring sanity to these leeches minds, it is public money that these supposedly public servants are looting, and they will definitely not enjoy that money, they will pay in double for that.
How do you know that all this money (if your figures are correct) is illgotten grain? Is there any thing stopping Sachin Tendulkar or Shah Rukh Khan or Rattan Tata or so many like them from opening accounts in Swiss banks? Agreed there is a possibility, even a distinct likelyhood of a portion of this money being illegal. But then who does not know about Cayman Island accounts of Americans or other westerners? On the whole I think this is a sensationalist article. I see many such articles in Pakistani forums where they either generate such rubbish or pick them up from Indian authors with dubious agendas. I for one am not going to pass this one on.
PMukherjee:
Most developing countries, including India, have what is known as capital controls. Indian capital controls laws are strict and are administered by the Reserve Bank of India. The laws are known as FERA (Foreign Exchange Reulation Act). According to FERA, an Indian citizen cannot hold foreign bank accounts. This law applies to Sachin Tendulkar, Shah Rukh Khan, Tata, and the Prime Minister as well. There is nothing dubious about illicit money being parked in offshore financial centers, tax havens and even so-called “traditional” banks. I am now involved in research on this very question.
The United States government has filed a case against United Bank of Switzerland (UBS) for money laundering and tax evasion involving some 52,000 Americans. UBS has been found guilty and has been fined heavily. It would be helpful to know your facts before you question an issue!
ZURICH — Bowing to international pressure, Switzerland Friday became the latest European money haven to make major concessions on banking secrecy laws, pledging far more forceful cooperation with foreign countries in pursuing tax evaders.
Switzerland, Luxembourg and Austria said they will cooperate with foreign tax authorities by providing information in specific cases, joining Liechtenstein and Andorra in softening bank secrecy laws. And Switzerland has taken extra step that it will comply with the Organization for Economic Cooperation and Development’s rules for combating tax offenses to avoid landing on the group’s “black list” of tax havens, Finance Minister Hans-Rudolf Merz said. Hi James Nason Can you add your view on this.
Now the latest news involving Swiss Banks:
BERN, Switzerland – The Swiss government said Friday it would cooperate on cases of international tax evasion, breaking with a long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars in the Alpine nation.
The government insisted it would hold onto its cherished banking secrecy rules, but said other countries could now expect Swiss cooperation in cases where they provide compelling evidence of tax evasion.
“We want assistance to be restricted to individual cases to prevent fishing expeditions,” President Hans-Rudolf Merz told a news conference, referring to the practice of seeking information about many individuals in the hope of discovering a few tax evaders.
A number of countries are hoping to avoid being blacklisted by world powers when they meet in April to discuss stepping up their fight against tax cheats.
Austria and Luxembourg also said Friday they would step up cooperation on tax probes. But the greatest pressure has been on Switzerland, which is embroiled in a dispute with the United States over wealthy Americans that have stashed money in its biggest bank, UBS AG.
Swiss authorities have provided the U.S. with the bank details of up to 300 wealthy Americans suspected of tax fraud, but refuse to identify about 50,000 more U.S. account holders Washington wants.
The bank, and the government, have said further cooperation would violate Swiss law, which makes an unclear distinction between the serious crime of tax fraud and the minor offense of tax evasion.
Merz said the country — which already works with other countries to fight terror financing and return dictator cash — will now adopt standards set by the Paris-based Organization for Economic Cooperation and Development for countries working together against tax evasion. Switzerland had refused to commit to the standards since they were written in 2000 for fear of compromising banking secrecy rules.
“Banking secrecy does not protect tax crimes,” Merz said. The change, he added, “will increase the acceptance of the (Swiss) financial center and give customers greater confidence” and safeguard jobs in a sector that employs tens of thousands of people in Switzerland.
He said, however, that Switzerland will maintain banking confidentiality for clients unless foreign governments produce concrete evidence of tax evasion. Switzerland’s new cooperation will come into force after agreements with other governments that provide Swiss banks with new financial opportunities, he added.
Merz’s announcement came a day after Switzerland’s tiny neighbor Liechtenstein bowed to outside pressure by adopting the standards in a similar attempt to shed its label as a tax haven where foreigners can safely hide their money. Several others tax havens — including Andorra, Bermuda and the islands of Jersey and Guernsey in the English Channel — also have signaled over the past month that they would open their books to foreign tax inspectors.
Switzerland has been struggling to come up with a strategy for preserving banking secrecy while satisfying the demands of the United States, France, Germany and other foreign governments looking to crack down on tax evaders. The confidentiality of bank accounts is a sacred cow in the country, comparable to its long-standing neutrality, and has helped the country become one of the world’s richest.
Swiss bank vaults hold an estimated $2 trillion of foreign money.
The Swiss Bankers Association said it supported the decision, but now wants “an end to all improper international criticism of Switzerland and its legal system, and also an end to threats to put Switzerland on a so-called ‘black list.’”
The industry group said it expects all agreements to refrain from retroactively punishing banks or clients for old infractions.
Shares in UBS AG and Credit Suisse Group rose on the announcement and were both up over 5 percent for the day.
The Swiss government also said Friday it would take part in a U.S. civil case against UBS, which is being accused of facilitating massive tax evasion by wealthy Americans. The Swiss will protect their “sovereign interests,” according to a statement.
The UBS case represents the most serious crisis in the Swiss banking community since the uproar in the 1990s over Jewish accounts left unclaimed after World War II. After reacting slowly, Swiss banks eventually agreed on a $1.25 billion out-of-court settlement with the descendants of Holocaust survivors.
Switzerland passed its banking secrecy laws in 1934 during a worldwide depression and under the threat of espionage by France and Nazi Germany, which aggressively courted Swiss bank employees to divulge the names and data of customers. Strict penalties were imposed for violating bank confidentiality.
Still, secrecy standards have eroded.
Switzerland has retooled the rules over the past two decades to make it easier for poor countries to reclaim assets stashed in Swiss banks by their former dictators, and has become a world leader in returning potentate cash.
And after the 2001 terrorist attacks on the United States, the neutral country took a key role to freeze assets and investigate suspected financiers of global terrorism.
The following banks have attracted the ministers and ex-pats and their heirs for centuries or in other words these guys got attracted to these banks for the only reason that “protect assets from snoopy investigators”. These bank provided strong sentiment that on depositor’s death the wealth passed onto to legal heir or their power of attorneys. The interesting fact is the minimum initial deposit for opening account is from USD 10,000 - USD 100,000. These banks look so structured and process driven with all latest technologies that it is a flawless system which gives confidence to all the account holders.
1) UBS
2) CREDIT SUISSE
3) BANK VONTOBEL AG
4) ROTHSCHILD BANK AG
5) JULIUS BAER
6) EFG International
7) MIRABAUD & CIE
In a way lets thank the Global Economic Crisis which has stirred the account holders who in the threat of loosing capital sorting ways to bring out the money back safely through back doors. I think in year 2009 and mid of 2010 with continuous Govt pressure and with support from media, newspapers, journals and law students network we can bring the money back to fuel real growth in India.
Gopal:
Good point. We need to be on our toes. These banks have a habit of back-peddling on some of these “promises”. I will believe it when I see it. Already, the Swiss Banks are saying in effect that they will not respond to blanket calls for investigation by any government (read my news clipping above). They will only respond when the government concerned (say Government of India) alerts them to specific names based on specific evidence. Now that is kind of hard isn’t it? How will the government know that so and so has an account in a specific Swiss Bank? How can the government build up a case, etc? So the persecuting government can easily end up in square one.
Banks are clever; they know that secrecy laws earn them a lot of money and the industry they have built around it employs thousands of people. So they don’t want to kill the goose that lays the golden egg. It’s going to be tough and the tug of war is far from over.
Another point. The revisions to the banking regulations applicable to tax havens, offshore financial centers, and traditional inshore banks already seems quite watered down. Gordon Brown, the UK Prime Minister was blowing all hot and cold about the need for “transparency” in the dealings of these “shadow” international banking system. Then someone I think on the UK government reminded him about the role of London in this whole “free for all” banking system. If the regulatory screws are turned too tight, they will end up hurting London and the thousands of British jobs the London banks employ and the huge money that flows through the city. So I think he has backed down quite a bit and the new regulations have been diluted. That’s my reading–there is nothing official about this of course. Just thought I would share with the readers of this blog the kinds of forces we are up against.
All the information above is a fact. I read the same in a yearly book published by Transperency International.. the book was released in the TI’s annual conference in Greece last year. I have personally met with Raymond Baker in Washington DC and had a discussion about this issue. He is more than willing to help the Indian govt. but its just that the govt. is not responding. If we all fight with unity, we can bring back the money which belongs to the Indian govt. (not the corrupt politicians and businessmen).. We, at 5thPillar India (www.5thPillar.org) are fighting for the same cause - corruption free India
ya got damn people, look - we spent lot of time and earn some money for us and our generation, but our hard work has been stole by our leaders and employers, we should think employer may use their own investment or money at beginning but the (sensor cut) leaders has been elected by us, so the responsibility of making those kind of people very much up to us….
Now we have a tool to re construct the indian political system means election, so please everyone aware and pole for getting good leaders …..
Hi
Indian black money in swiss bank is really shocking….. if the politicians in the present govt. are not corrupt…….. only than they did take the action, and ask the swiss bank about the money depositors list with them and then ask the concerned person about the reality of the money deposited… if that belongs to them really after paying the Indian tax at the time of deposit… than its ok other wise all the money will be seeized by the govt… and make the respectable use of the same for the countries benefit …………..overall i wana to say that Govt should ask the swiss bank for the list of the account holders with the amount they have.
Govt should take the immediate action over the issue which is bigger than the elections and there own …..
Found this on the web, might be of relevance to the current discussion
****************************************************************************
FAQ on the –Tax Havens etc. (31 March 2009)
Prof R. Vaidyanathan;
IIM-Bangalore
a) Which are the various tax havens, where the ill-gotten wealth of Indian businessmen and politicians is stored?
There are presumably more than 70 Tax havens in the world. Indian wealth could be more in Switzerland and various British /US islands. At least forty countries market themselves aggressively as tax havens [Source: Internal revenue Service USA on Abusive a Off-shore Tax Avoidance schemes –Talking Points Jan 2008]
The well known Tax Havens are Switzerland/ Liechtenstein/ Luxemburg/ Channel islands etc
b) How much Indian money do you think would be locked away in Swiss banks? What is the basis for the estimate you make?
Illicit Financial Flows from Developing
Countries: 2002—2006
GLOBAL FINANCIAL INTEGRITY – [GFI]
Authors DEV Kar and Devon-Cartwright Smith
A PROJECT OF FORD FOUNDATION—
Source: http://www.gfip.org/storage/gfip/executive%20-%20final%20version%201-5-09.pdf
Financial flows in the context of this report includes the proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of licit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade payment of taxes).
1) In 2006, the most recent year of the Global Financial Integrity-[GFI] study, developing countries lost an estimated $858.6 billion to $1.06 trillion in illicit financial outflows.
2) Even at the lower end of the range of estimates, the volume of illicit financial
flows coming out of developing countries increased at a compound rate of 18.2 percent over the 5 year period analyzed for the study.
3) On average, for the five-year period of this study, Asia accounts for
approximately 50 percent of overall illicit financial flows from all developing countries.
4) This report shows that the average amount stashed away from India annually during 2002-06 is $27.3 billion. It means that during the 5 year period the amount stashed away is 27.3×5=136.5 billion. It is not that all these amounts had gone to Swiss. It has gone to different tax and secret shelters. The share of Swiss banks in dirty money being a third of the global aggregate, some $ 45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks. This appears in page 30 of the report mentioned above
5) The important point is that this is only for 5 years. More amounts were stashed away during the Nehruvian socialist regime. So the loot for 55 years would be several times the above-cited money. In fact in those days the Indian rupee commanded a better value per Dollar. So fewer rupee could get more dollars. So the estimation that the Indian money stashed away may be of the order of $1.4 trillion.
c) How did the money get there in the first place? (if you could elaborate a little on this, that would be great)
There are several methods /reasons. Under invoicing/over invoicing of exports and imports and getting the balance stored abroad.Kick backs from major defense/civilian contracts. Not bringing the earnings abroad. In the olden days smuggling of Gold and illegal money. Transactions done abroad and not reported here. Hawala funds. Funds earned by artists/ Entertainment industry /sports people and stashed abroad. When you want to indulge in Adharma hundred ways are open!
d) Do you feel international terrorist organisations use the tax haven route, to send across money all over the world, to finance their nefarious activities?
Even our NSA—M.K Narayanan has spoken about it in Berlin
e) You recently wrote, “Under pressure from federal authorities, Swiss bank UBS is closing the hidden offshore accounts of its well-heeled American clients, potentially allowing their secrets to spill into the open.” Do you feel the government of India should also demand all the Indian black money in Swiss banks, back?
Of course. India should and must act. We are not a banana republic.
f) How can the government go about doing the same? What are the different ways in which it can try and get this money back?
Put it on the Global Agenda. Put it in G 20 Put it in IMF Put it in EGMONT GROUP. Also take a lead among all developing countries. Support US /German/French Efforts.
g) Do you feel Swiss authorities and other tax havens will co-operate with us on this issue, if we do take the initiative?
It is not due to our pressure but that of US which will make them co-operate. When a family is in deep financial crisis then it tries to look at the small amount saved under the sugar jar by the grandma. Same way developed economies are desperate for every dollar. Even if we do not act due to their efforts the list of crooks may be out .Then we will be in a dangerous social situation since Who’s Who of India will be there. Instead we should get it and get the funds and decide on the steps to sterilise it and punishment etc. Otherwise world will laugh at us. We will be worse than a Nigeria [Sani Abacha] or Phillipines [Markose]
h) Do you feel the government will do this, given that a lot of black money of politicians is stored in the Swiss banks?
Public pressure will make them do it. Plus the evolving global situation against Tax Havens. The money belongs to the poor farmers and unorganised workers of India.
i) Also Indian businessmen have a lot of their ill-gotten gains in these banks. Do you see pressure being applied by them on the government on not to get this money back?
The world situation is such that Indian Business man will want to bring it back now given the attractive returns in India. The entire PN route was conceived for that.
j) You wrote in your column that the German foreign intelligence agency BND got names of 1400 clients of the Liechtenstein based LTG bank who were supposed to be suspected tax evaders. Of the 1400, 600 were supposed to be Germans. Do you think of the remaining there will be Indians as well? Has the Indian government approached the German government for the list?
Indian names will be there. Our Tax evaders and crooks are like Maha Vishnu present in all continents and all tax havens in the sea, on the earth, in the air. But our Government has been lukewarm in this issue. It should have despatched immediately senior officials plus the FM to get the names.
Hurray !!!
As per the latest news –
Federal authorities have arrested a wealthy American client of Swiss bank UBS on charges of tax evasion.
The client, Steven Michael Rubinstein, an accountant, was arrested in Boca Raton, Fla., and charged with one criminal count of filing a false and fraudulent tax return, according to court papers unsealed on Thursday.
The arrest is the first of a major American client of UBS, which has been under criminal investigation for helping scores of wealthy Americans evade taxes through secret offshore accounts that went unreported to the Internal Revenue Service. It signals that federal authorities are making good on a promise to pursue American clients suspected of tax evasion, and in some cases to make indictments.
UBS admitted in February to conspiracy to defraud the I.R.S. by helping scores of wealthy Americans hide nearly $20 billion overseas.
The bank paid $780 million to settle the charges, but it remains under investigation, as do its American clients.
A federal judge has set a bail bond hearing for Tuesday.
“This is the start of the end because country after country is now signing up to the principles that have been set forward internationally. The principle is that you got to be prepared to exchange information about tax,” UK Prime Minister Gordon Brown told reporters in G20 summit.
The above does not mean that Gordon Brown with work for us. We all(True People of respective nations) need to !!! It is very simple - Highlight, Highlight and Highlight - and let the focus light of entire nation falls on the subject matter. It is just an hours job if we all put our effort together. Thanks to Media, Patriotic Leaders and True Volunteers who have put lots of their time and efforts to take it the level where this issue got international representation in G20 summit. ALL hold the line on your continuous highlighting of THIS ISSUE with any minute details - the crackdown has already began !!!
Well, I wish it was an hours job. People get carried away with a lot of hyperbole. Actually, we have not achieved anything yet, except on paper. But that is an important first step. The G-20 adopted the tax haven measures due to G-7 pressures. India had nothing to do with it.
International institutions as well as the regulatory authorities in the G-7 will have to keep a close watch over these tax havens. UBS acted to collaborate with the US government because otherwise the US would have shut down its business in the country. UBS did a simple calculation–the cost of losing business opportunities in the US was more than the benefit of not cooperating with the US. No morals were involved. It was a hard-nosed business decision. The day India can call the shots, others will sit up and take notice. Not before that.
Mr Kar,
I don’t think you’re completely right in saying - ‘business decision’. It would be better to say - ‘unilateral business decision’.
US normally doesn’t do business, she orders in a polite language and later sanctions economically in a harsh way.
I completely agree that the UBS should stop becoming illegal wealth dump; but at the same time I don’t think US is doing any great job either.
I would get confused during my nursery classes and would seemlessly exchange usage of US and UN for each other, but now after years I realize that the two terms are actually the same!
US does what it wants, no matter whether it favors the world community or not, no matter it is ethical or not, no matter it is legal or not…
India should not rely on US. There’s only a fraction of US illegal money in UBS, anyway. India must act on its own, if she genuinely wants to get out that money. But then I think about the spineless political system of our country and take a deep breath and leave any hopes …
This should be circulated to all to make the awareness
In order to get awareness to the public, some one should take this to media
Sumeet:
I don’t know what your point was. I said that the UBS made a calculation–if it continued to violate US laws, it would lose its license to operate here. That’s the same in most countries I am aware of. It’s the same in India too. Multinationals in India also have to follow Indian laws. Sometimes that does not suit them and they have folded shop lots of times in the past. So all corporations take that business decision. So I don’t know what a “unilateral business decision” is! If you are an economic heavyweight, corporations will think ten times before they cut off relations with you. It’s as simple as that.
Pardon me but I find many Indians extremely moralizing. In taking a moral posture, they are not able to understand the world as it is, as it operates. Moral posturing is not helpful. My own approach is let’s not live in La-La land.
One of the fundamental postulates of foreign policy is that countries act in THEIR OWN SELF INTEREST. If international organizations like the UN suport that position well and good, otherwise a country would act without its consent. The same is true of India. The UN system has its drawbacks because there are many competing interests in a global body. (I should know because I spent 32 years of my life in one). Many times, it is not able to reach a consensus on simple issues like human rights. Even on Darfur, where genocide is taking place, there is no world consensus on whether the Sudanese government should be taken to task. Each country has its own take.
Now, let me remind you that India went to war with Pakistan over the East Pakistan refugee problem that led to the creation of Bangladesh. There was no UN sanction allowing India to launch that war. So if you look at history, many countries have taken action, even war, and have not waited for UN sanction. Your view of the US is lop-sided. This is the problem with many of us. We get carried away with moral posturing but fail to take notice of simple dynamics. Remember the formulation of foreign policy has nothing to do with morality, although sometimes the paths may cross by accident not by design. No country is running a Ramkrishna Mission ashram! Therefore, India should do (if it can) what is in its best interest. The Chinese, the Russians, the Pakistanis nobody is in a position to take the moral upper hand. All these fellows have their own skeletons in the closet. No body is saying that India should “rely” on the US. India should discuss and then take action according to what is in its best interest. Don’t get hung up on morality!
Another point. Sumeet implied that the US would not care about UBS because “there is only a fraction of US illegal money in UBS, anyway”. While that may be true, it does not mean the US would not care. Quite the opposite is ture. The US Federal government has sued UBS in a Federal Court. That takes money (lawyers, other expenses), time, and effort. The government finally was able to slap a huge penaly (some US$800 million) on UBS. This is not the sign saying we don’t care. This means “Break our laws and you will pay; we will make an example out of you. Other banks beware!”
THIS IS NOT SURPRIISNG - There are a many good reasons for India’s plight. Here are the top three:
1] After two centuries of British rule, corruptopn has become the staple diet of Indians (This is true for almost all former colonies)
2] Churchill said that India is no more a country than the equator - this remains so. Most Indians are at war with each other and trust no one ouside of their ‘group’. This lack of total confidence leads people of all walks to put thier money in a safer place.
3] Indians are ruthless in pursuit of money - they go hungry, starve thier own families, and cheat each other over land and property - hand over fist! The corrupt leagal systrem ensures that such issues rarely get resolved in court.
Before the Brisih gang-raped India it was the richest country in the world. Now it still has wealth but it lacks that spirit that unites.
According to research on the issue of illicit financial flows at Global Financial Integrity, China leads developing countries in the outflow of black money. The outflow of black money from Saudi Arabia, Mexico, Nigeria, Malaysia, Kuwait, Indonesia, Kazakhstan, Pakistan, and other countries are also very high. Very few among the list of these countries were former British colonies. But they all share some or all of the following characteristics:
1. Lack of a rule of law. All laws are on the books but fair implementation is another matter. The rich and the powerful seem to get away with it most or all of the time.
2. Wealth is concentrated in the hands of the few. Severe income inequality leads to a situation where the rich grow richer. The corporate sector as well as political parties come to rely on the rich and powerful for their funding needs.
3. In such an environment, the hidden accumulation of wealth becomes one of the primary motivators of illicit or black money outflows to safe havens abroad.
4. Corruption together with a lack of a fair and impartial judiciary that hands down swift justice as well as grinding mass poverty and illiteracy provides the perfect conditions for a “rent-seeking” or bribery-prone civil administrative system.
At least India has a vibrant democracy; many other developing countries do not even have that advantage.
I remain hopeful that India will make progress on the issue of corruption and black money. But it is going to be a painfully slow process because the factors sustaining the black economy (like public and corporate corruption, illiteracy, lack of a rule of law that is implemented in a speedy, impartial, and transparent manner, etc.) are not amenable to a quick improvement.
Dear Dev, I read the entire blog and happy to see the contents . It is a highly contentious issue but very critical for our country. Im not a pro BJP or anti Congress but I surely would like to compliment Advani Ji on having made this as a poll issue. No amout of our debating is gonna help unless the policy makers have a will to do so, for which the first step is to SPELL IT OUT PUBLICALLY. Lets keep the fire burning through such forums.
This is one of the important e-mails I exchanged with Mr. Nason. As readers know, Mr. Nason did not provide the data requested.
Dear Mr. Nason:
Thank you, I look forward to receiving a copy of the latest issue of Banking Barometer.
You may agree that gaps in information create a lack of transparency which provide the breeding ground for unfounded rumors. I can think of no reason why the Swiss Banking Association (SBA) cannot publish statistics on total investments (by type of financial instruments) held by each country. There is nothing in such highly aggregated statistics that can be remotely construed as detracting from banking secrecy. After all, the SBA will not be divulging banking information on individual clients. At the same time, such statistics would promote transparency and dispel false information and rumors. If there is nothing to hide, why hug all the cards to one’s chest and have the rumor mill going? Surely, the SBA can do better?
Now if the SBA were to say that countries would not wish their asset holdings in Swiss Banks to be published, that begs the question–why? The bottom line is the SBA and its clients cannot have it both ways–we are transparent (that is have nothing to hide) but we will not divulge information that would promote transparency. I would appreciate your reaction on this.
Best regards,
Dr. Dev Kar
Lead Economist
Global Financial Integrity Program
Center for International Policy
1319 18th St., N.W. Suite 200
Washington DC 20036
Recently, Mr. Asok Desai published an article in The Telegraph “Advani’s Faux Pas..” (April 21). That article has a number of factual errors regarding my report “Illicit Financial Flows from Developing Countries: 2002-2006″. But no one from The Telegraph contacted me and give me a chance to refute Mr. Desai’s points which are based on a misinterpretation of the eport which I wrote as part of a project funded by the Ford Foundation and published by Global Financial Integrity, Washington DC where I work as a Lead Economist. I submitted a rejoinder to The Telegraph several days back but have not heard from them. When I called The Telegraph, they told me that they are waiting for a submission from Mr. Desai so that they can run the his and my article together. What a lopsided journalism. The Telegraph did not give me a chance to refute Mr. Desai’s silly arguments based on gross factual errors on a report I wrote but they are giving him all the chance to refute my rejoinder. Let’s see what happens but the longer The Telegraph waits, the more readers will forget what Mr. Desai said in the first place.
Dr. Dev Kar
Lead Economist
Global Financial Integrity
Washington DC 20036
NY Times:-
The Swiss bank UBS, which has written off more than $50 billion since the start of the credit crisis, said Monday that the head of its investment banking unit, Jerker Johansson, is stepping down — marking the fourth time that business has changed bosses in the last 18 months.
Oswald J. Grübel, the UBS chief executive, has been working to reduce the bank’s risk exposure and focus on core operations, including wealth management, since he took over in February. He thanked Mr. Johansson, who joined UBS in March 2008, in a brief statement “for his great efforts and his valuable contribution to the repositioning of our investment bank.” ’
The investment banking division that Mr. Johansson inherited last year was responsible for almost all of the losses that UBS has suffered from the credit crisis.
Mr. Johansson is leaving immediately. Alex Wilmot-Sitwell, a board member and a senior member of the investment banking unit, and Carsten Kengeter, head of fixed income, currencies and commodities, will now serve as co-chief executives of the unit.
Dominik von Arx, a UBS spokesman in London, declined to comment on the reasons for Mr. Johansson’s departure.
Mr. Grübel, formerly chief executive at Credit Suisse, has announced about 7,500 job cuts since taking over and sold the bank’s Brazilian financial services business for about $2.5 billion. He is trying to strengthen the bank’s balance sheet and conclude a tax-evasion case involving 52,000 of UBS’s wealthy American clients.
On Saturday, the Swiss president, Hans-Rudolf Merz, asked Timothy F. Geithner, the U.S. Treasury secretary, to drop a lawsuit led by the Justice Department seeking to force UBS to turn over the clients’ names.
Under Swiss bank secrecy laws, disclosing clients’ names is a criminal offense that can carry prison terms and large fines.
Switzerland instead is proposing to negotiate a new tax treaty with the United States that would make possible such disclosures in the future. However, the treaty would not apply to the clients in the continuing case. The current treaty, signed in 1996, does not require Switzerland to disclose clients’ names, and the United States is eager for a new treaty that does. Formal talks on a new treaty are scheduled to start on Tuesday in Bern, Switzerland.
For its part, the Justice Department is unlikely to scale back or drop its case against UBS, according to a senior person briefed on the matter. The agency “is not going to give in,” this person said on Sunday.
Daniel Haener, the acting consul general of Switzerland in New York, said Sunday that President Merz had asked Mr. Geithner for the names case against UBS to be withdrawn after a new agreement is signed. Mr. Haener said that “according to Mr. Merz, Mr. Geithner took note but was not yet in a measure to answer.”
The Treasury Department, in a statement on Sunday, said that Mr. Geithner “listened to the Swiss concerns regarding the UBS case and indicated that he understood the importance of appropriately resolving the matter.”
Swiss officials have said in recent weeks that any new treaty might fall apart unless the legal case against UBS is dropped, because upset Swiss citizens could force a national referendum on the matter and reject it. The Swiss Parliament could also reject it, the official said.
The legal fight for the identities of clients has created a popular uproar in Switzerland, where financial secrecy is a revered tradition. UBS has argued that its employees could be prosecuted under Swiss law if they were forced to disclose client information.
The Justice Department has been trying to force UBS to disclose the names since the bank in February reached a $780 million deferred-prosecution agreement and admitted to defrauding the Internal Revenue Service through offshore private banking services sold to wealthy Americans.The bank has turned over 300 names as part of the deal, according to court papers in the case.
Is any law in India to hang the betrayed? If not, the government who really interested the welfare of the people of the nation must enact such law. It is the think of every common man.
Why the Indian government not aware of this black money such a long time?
Why it fails to watch those having frequent visit to such countries?
Why the Indian political parties not showing any interest to bring back the money ?
Why the Indian government not ratifying the UN Convention against Corruption? (UNCAC)
Is it true saying only 10 paisa reach the people on a rupee?
Any one please answer.
ok guys, I sincerely believe that the indian govt is creating all this drama over swiss bank money so that they can bring it back to india thro’ back doors or legally without being taxed. dont be surprised if they come up with a new law regarding getting the money into the country tax free, after paying a flat amount. reason being, in the current turbulent times, it is hard to predict the future of any financial institution. what if these banks go bankrupt and our politicians get nothing out of the swiss bank..after all, even the swiss bank will not insure 1.4 trillion, right?
particularly, the following statement raises the doubt regarding the future of swiss bank in the time of current global credit crisis
‘The Swiss bank UBS, which has written off more than $50 billion since the start of the credit crisis,’
so i guess, politicians all over the world would somehow want to get their money back from the swiss bank..and therefore all this drama. dont get too swayed by it. as far as politics is concerned, none of the issues come into public eyes till the govt really wants it to….
The Telegraph finally published my rejoinder to Mr. Ashok Desai on May 5, 2009 after I sent the editor an e-mail withdrawing my article from consideration because I wanted to publish it elsewhere.
Anyway, The Telegraph allowed Mr. Desai to get the last word in. That rejoinder to my rejoinder has no substance; he just resorts to personal attacks through innuendos. I don’t want to get into a tit for tat with him. But it is kind of strange that a economic adviser to the Government of India does not know the difference between interpolation and extrapolation! No, Mr. Desai I meant interpolation and not extrapolation. Please look up Wikipedia and if you still can’t follow contact this “self-professed” researcher.
Dev,
Where’s the article published ?
Suman:
It was published in the Telegraph of Kolkata. The link to that article is:
http://www.telegraphindia.com/1090505/jsp/opinion/story_10890118.jsp
Dev
Hi,
Interesting opinions and some of them are very logical
Instead of getting in to details of Swiss secrecy and other loopholes of laws
The most important issue is morality and the Swiss is wanting on that
Look at the Jews world war accounts,the Swiss govt reacted only when world pressure was built up
Swiss never wanted to be a member of UN,may be they don’t want to be part of
Money laundering etc
They had to act after 9/11
The policy of secrecy is going to end at some point of time ,whether the Swiss like it or not–The writing is on the wall
the accumulation of black money has been going on since 1947 in india by corrupt political leaders, beurocrats and the agents without any limit to time, dimension and mean-mindedness. there is still no political will to stop ruthless exploitaion of honest and law-abiding people. i am sad to say that even stalwarts like P.M., F.M. and others who are unquestioningly clean, honest are totally ineffective as powerful administrators and leaders who are supposed to drag india out of current mess. india badly needs powerful and honest administrators who can improve everything by hiring unlimited talents in india. who would trust in the developed world that india is perhaps the most expert country in world to fabricate good things on paper i.e. compliance of financial terms etc. even while dealing with world bank, imf and whatnot.
The content of the article was very informative, In spite of all of us know about the swiss bank little bite,your article gave us clear cut information that made me aware of top to bottom
The article is an utter crap.
Seems like you pulled those figures out of your ass.
Care to mention any authentic source ?
CRAPFACE, I am sure your face should be like a crap from your words. I am also sure you are a swiss guy! Just shut up and fuck your own ass. You don’t understand the pain of the common Indians. The money you have is our blood that was sucked by our rich and given to you to drink and enjoy.
In the name of lord, I question the swiss people. If this same atrocity is done to you people, will you take it? If you say no I can’t take the same pain, then share us the authentic information (at-least give us the 20% of the top account holders list). If you still continue to say no this is our policy on not to disclose, then I would say you people are cowards and just wait for the lord to answer. Definitely your dooms day on your economy is not very far away. Don’t get the curses and enmity of the 1 billion people here. Your are underestimating our feelings and the will power of Indian people. Our feelings are much stronger than the money that you have. We know how to get that money back. I am damn sure that there will be at least 1000 Gandhi’s in our country, who can create a revolution and bring our politicians and you cowards down to kneels.
Jai Hind.