The Hindu Business Line : New Swiss law to curb flow of black money

Mumbai, May 4 Switzerland will introduce a new legislation to check the inflow of black money into the country, said Ms Doris Leuthard, the Swiss Economic Minister.

The law would come into force from January 1, 2009 and would essentially keep a watch on the transactions done in the financial markets of Switzerland. “Though it would be difficult to solve the problem completely, the new and modern law will be very stringent and transparent in nature and will be able to tackle the problem to a great extent,” Ms Leuthard told Business Line.

In March, Switzerland’s Ambassador to India, Mr Dominique Dreyer, had also said that with the new law coming into force, it will not be easy to stash black money from India and other countries into Swiss banks.

Ms Leuthard, who was in India last week, also met the Deputy Governor of Reserve Bank of India, Ms Usha Thorat, to discuss the opening up of the banking sector in India. She said that though it is a time consuming process, her government realises that it “has to go step by step”.

Recently, one of the Swiss Banks, UBS AG, got a licence to open branches in India after a long wait. The branch licence was pending with the central bank since 2004. It was cleared only in February this year after the Enforcement Directorate, the economic crime investing wing of the Ministry of Finance, gave a clean chit to the Swiss bank on some money trail issues.

During the current visit, Ms Leuthard also held talks with the Indian Commerce and Industry Minister, Mr Kamal Nath, on Free Trade Agreement with a smaller four-nation European Free Trade Association (EFTA). She hoped that the negotiations would be completed by the end of this year. EFTA States include Iceland, Liechtenstein, Norway and Switzerland.

Areas of interest

Speaking on other areas of cooperation between the two countries, she said that Switzerland has shown keen interest in areas such as machinery, chemicals, pharmaceuticals, infrastructure, logistics and energy.

“We are already involved with the new airport in Bangalore and will continue to look at opportunities that come up in the airports sector in India. Our companies would also be keen to be a part of port expansions in India. Apart from that, there are Swiss companies making wagons out of aluminium and its substitutes which are very light in weight and hence consume less energy. So, we see the need for cooperation on these fronts with India in future,” she said.

She also said that India and Switzerland have decided to start a new project on small and medium enterprises that will be handled by a joint commission. She added that in March next year, the State Secretary of Research and Technology of Switzerland, along with a delegation of SMEs, would visit India to concretise issues on that front.

Over 90 per cent of the companies in Switzerland are SMEs, she said.

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