Black money trail: Liechtenstein rejects help to India

Black money trail: Liechtenstein rejects help to India
New Delhi: Liechtenstein has declined help in India's quest for suspected black money trail to the small but rich European country bordering Switzerland, citing absence of a bilateral treaty for such information exchange.

The Indian government is facing intense pressure from the opposition parties as well as the Supreme Court to take action against those having stashed illicit wealth in foreign banks, mainly in Switzerland and other locations such as Liechtenstein and Cayman Islands.

A Liechtenstein government spokesperson confirmed to PTI that India has sought administrative assistance and details of some Indian clients of LGT Bank located there.

"At the moment, we cannot reply to the content of the request (from India) since there is no legal basis i.e. no bilateral agreement for this," the spokesperson said.

The spokesperson, however, said that the Liechtenstein government has offered to negotiate a tax treaty with India, which would facilitate information exchange in future about suspected tax evaders and offenders of other financial crimes.

Last year, Indian government received information from the German government regarding some Indians having secret accounts in LGT Bank. Reportedly, the tax department has served notices those entities for alleged evasion of tax.

Liechtenstein is a small country, located entirely within the Alps range of mountains, with a total estimated population of about 35,000. However, it is one of the richest countries in the world and has the highest GDP per person in the world.

"We are working towards the common goal of establishing a treaty that enables us to exchange information in the future, according to international standards," the official said.

India is currently looking to sign treaties with a number of countries to enable exchange of information about tax evasion and other financial offences.

On whether India has sought a tax treaty, the official said, "India has confirmed her interest in concluding a tax agreement with Liechtenstein".

"Exploratory talks took place, with a view to enter into negotiations. On the basis of the Liechtenstein Declaration of March 12, 2009, where the government committed to the global OECD standards on transparency and information exchange in tax matters, the government of Liechtenstein is prepared to negotiate a tax agreement with India.

"It is the firm view of the Government that compliance with international standards is a key factor to grant stability, reputation, and credibility of Liechtenstein's financial centre," the spokesperson noted.

Liechtenstein has offered to negotiate a tax agreement with India accordingly, she said, adding that the country was committed to negotiate comprehensive bilateral tax agreements on the basis of the accepted international standards.