GS Paper - 2 (International Relations)

India will get this month the third set of Swiss bank account details of its nationals under an automatic exchange of information pact with Switzerland and this will include for the first time the data about real estate properties owned by Indians there, officials said on 12 September 2021.

What

  1. The move assumes significance on the part of Switzerland as well as the European Alpine nation is trying hard to reposition itself as a key global financial centre while warding off the long-persisting perception about the Swiss banking system being an alleged safe haven for black money.
  2. It would be the third time that India will get details about bank accounts and other financial assets held by Indians in Switzerland.
  3. It will be the first time that the information being shared with India would include information about the real estate assets.
  4. India had received the first set of details from Switzerland under AEOI (Automatic Exchange of Information) in September 2019. It was among 75 countries to get such information that year.
  5. In September 2020, India received the second set of Swiss bank account details of its nationals and entities, along with 85 other recipient countries with whom Switzerland's Federal Tax Administration (FTA) exchanged information on financial accounts within the framework of global standards on AEOI last year.
  6. From this year, Switzerland's Federal Council, the country's top governing body, has decided to implement a key recommendation of the Global Forum on Transparency and Exchange of Information for Tax Purposes, under which Swiss authorities will also share details about investments made by foreigners in the Swiss real estate sector.

Flashback

  1. The 86 countries covered under the AEOI in 2020 included 11 new jurisdictions -- Anguilla, Aruba, Bahamas, Bahrain, Grenada, Israel, Kuwait, Marshall Islands, Nauru, Panama and the United Arab Emirates -- in addition to a list of 75 countries, with whom information was shared in 2019.
  2. Switzerland's first such exchange took place at the end of September 2018 and involved 36 countries, but India did not figure in the list at that time.
  3. The Global Forum of the Organisation for Economic Cooperation and Development (OECD) reviews AEOI implementation.