Sunday, October 9, 2011

Black money in Swiss banks

A Surya Prakash

Neither Manmohan Singh nor the Government he heads is interested in bringing back to India the money that has been looted from this country.

In November 2010, President Laurent Gbagbo of Ivory Coast in western Africa made a bid to legitimise his dictatorship through an election. The voters, however, rejected him and chose his rival, Mr Alassane Ouattara, instead. Mr Gbagbo refused to honour the people’s verdict and hand over power to the winner despite pressure from the international community. In recent weeks, two other autocrats in the Arab world — President Zine El Abidine Ben Ali of Tunisia and President Hosni Mubarak of Egypt — have been forced to step down following mass uprising in their countries.

Apart from the growing anger against dictators in that part of the world, there is another thing that is common to all the three leaders — the freezing of their bank accounts and those of their associates by the Government of Switzerland. Following petitions from Ivory Coast and Tunisia, the Swiss Cabinet met last month and decided to freeze the assets of Mr Gbagbo and Mr Ben Ali. A similar decision was taken in respect of Mr Mubarak’s assets in Switzerland on the very day he stepped down from office.

Announcing these decisions, the President of Switzerland, Ms Micheline Calmy-Rey, declared that these bank accounts would be frozen initially for three years to enable the authorities in these three countries to initiate criminal proceedings against the leaders rejected by the people. The initiation of such criminal proceedings is a pre-condition for judicial assistance from Switzerland and for the return of the funds to the countries from which they were embezzled.

Switzerland is desperately trying to shed the image of a country that attracts dirty money from across the world and shields those who deposit such funds in its banks. The Swiss Government has, therefore, passed a new law which enables the Cabinet to block assets of dictators. Using the developments in the Arab World as an opportunity for an image make-over, Ms Calmy-Rey has said that Switzerland does not want its financial system to be used to park embezzled funds from poor countries.

Accordingly, Swiss banks have been directed to monitor these accounts and ensure that the account-holders do not withdraw funds from them. The European Union and the United States have also frozen the assets of Mr Gbagbo and Britain’s Serious Fraud Office is investigating if Mr Mubarak has stashed any funds in the UK.

Surely this is an opportune moment for us to go after Indian fraudsters who have parked funds in Swiss banks. However, the swift action taken by Switzerland, the European Union, Britain and the US only confirms our worst fears about the attitude of the UPA regime vis-à-vis black money and bank accounts of Indians in Switzerland and other tax havens. Virtually acting suo motu, the Swiss authorities have frozen the accounts of three fallen autocrats but our Government would like us to believe that the Swiss Government was uncooperative when we sought its help to freeze $ 8 billion stashed away by a Pune-based stud farm owner called Hasan Ali.

In other words, just acting on a tip-off, the bank accounts of three rulers are frozen by the Swiss Government, but the same Government is unmoved by the entreaties of the Government that represents the second largest country and one of the fastest growing economies in the world. Such is the pusillanimity of the Government headed by Mr Manmohan Singh that even a principality like Liechtenstein, which is smaller than Gurgaon, has been cocking a snook at us and refusing to cooperate. Clearly there is something wrong somewhere. Why is Mr Singh unwilling to act against those who have looted the country?

The Task Force appointed by the BJP to examine this issue says that global financial institutions like the International Monetary Fund estimate the quantum of black money lodged in tax havens at $ 18 trillion. Of this, around $ 500 billion (`25 lakh crore) belongs to India. The US and several other countries have pressured the Swiss Government to disclose details of black money salted away by their citizens in Swiss banks. The US, for example, coaxed, cajoled and eventually threatened UBS Bank in Switzerland to part with details of accounts held by 4,450 Americans. It is estimated that the unaccounted wealth stashed away in these accounts was of the order of $ 18 billion.

France and Germany have followed suit. The latter turned its attention to Liechtenstein, which survives on the money lodged in its banks by fraudsters from across the world. It bribed an employee of LGT Bank in Liechtenstein and obtained details of black money parked in that bank. Germany later offered to share the data with all countries; many European nations grabbed the offer. But there were Governments, including ours, which trembled at the thought of securing this information. Mr Singh was probably petrified at the thought of obtaining the names of account-holders lest his mentors and benefactors figure in the list.

However, despite our reluctance, the Government of Germany thrust the list on us but the Government of India treats the information as ‘confidential’ because it feels duty-bound to safeguard the fundamental right of crooks to privacy. Strangely, though the issue at hand is money-laundering, the Government is desperately trying to dilute the offences committed by these account-holders by pretending, as in the case of Mr Hasan Ali Khan, that these are merely cases of tax evasion.

There can be little doubt now that the skeletons tumbling out of the Union Government’s cupboards over the last six months have done incalculable harm to the credibility of the ruling coalition and substantially eroded the mandate given to it by voters in May 2009. But the recent development vis-à-vis the freezing of the accounts of those who are accused of embezzling funds from Egypt, Tunisia and Ivory Coast has completely unmasked Mr Singh and the Government he heads.

The explanations and excuses offered by Mr Singh for his inability to bring back the black money stashed away by Indian politicians and businessmen in Swiss banks and in the 70 tax havens across the world will no longer hold water. Unless the Supreme Court steps up the pressure and compels the Government to act, Bharat’s swabhiman will be at stake.

No comments:

Post a Comment