Wednesday, Dec 01, 2021
Black Money

'Shifting Goal Post To Save Face'

The BJP-led central government's latest turnaround raises key questions

'Shifting Goal Post To Save Face'
'Shifting Goal Post To Save Face'

In its latest turnaround, the BJP-led central government has now indicated that it might disclose a limited number of names, cherry picked from the list of foreign bank account holders possessed by the government through formal/informal sources. This is clearly an exercise to save its face.

The central government’s move raises the following key questions:

1. Why only these 136 names?

People of the country believe that the previous Congress-led UPA government had things to hide and blocked the disclosure of names. Now, with BJP government’s similar reluctance in sharing the names gives rise to a reasonable apprehension about its real intentions.

By cherry-picking a set of names and concealing others, it has further confirmed the belief that the BJP is hell-bent on saving some of the influential people appearing in those lists.

The truth is - there is no law in India or treaty with any country that stops the Indian government from taking action against the possessors of illicit money.

2. BJP playing politics on the issue?

Two recent developments have confirmed that the BJP wants to play politics over the issue of black money, rather than solving it.

First, is the central government’s turnaround on the non-disclosure of some names and second is the cherry-picking of names to score political points.

The Aam Aadmi Party is of the clear view that anyone who possesses illicit money, irrespective of his/her affiliation with any political party, must be brought to book.

Politics should not be played, rather the promise made by Mr Rajnath Singh of bringing back every penny of black money sitting abroad within 150 days of coming to power, and that of Mr Modi of attributing such money to every citizen to the tune of Rs.15-20 Lakh per person, should be worked towards.

3. Double Tax Avoidance Treaty is not the issue-A matter already settled by the Supreme Court :

The Supreme Court in its judgement on 4th July 2011 after perusing the double Tax Avoidance Agreement between India and Germany emphatically conveyed that there is no provision or hindrance in the agreement that limits the disclosure of information.

The SC also pointed, such a plea is untenable as no agreement can limit infringe upon the principles laid down in our constitution.

Extract of para 56 of its judgment :

“We have perused the said agreement with Germany. We are convinced that the said agreement, by itself, does not proscribe the disclosure of the relevant documents and details of the same, including the names of various bank account holders in Liechtenstein.”

The Supreme Court went on to analyse the clause of the agreement which the government is pleading to be a hindrance for disclosure of information.

Extract of para 58 of the judgement:

“The above clause in the relevant agreement with Germany would indicate that, contrary to the assertions of Union of India, there is no absolute bar of secrecy. Comity of nations cannot be predicated upon clauses of secrecy that could hinder constitutional proceedings such as these, or criminal proceedings”.

It further stated in para 72 of its judgement:

“We have perused the documents in question, and heard the arguments of Union of India with respect to the double taxation agreement with Germany as an obstacle to disclosure. We do not find merit in its arguments flowing from the provisions of double taxation agreement with Germany.”

Another claim made by Mr Jaitely is that Germany has objected to revelation of names pertaining to Liechtenstein. This argument also is not true since this information pertains to Liechtenstein, which is an independent sovereign state. The 1995 agreement between India and Germany has neither any jurisdiction nor any authority over information pertaining to banks of Liechtenstein.

Here is an extract of Para 56 of the judgement:

In the first instance, we note that the names of the individuals are with respect to bank accounts in the Liechtenstein  which though populated by largely German speaking people, is an independent and sovereign nation state. The agreement between Germany and India is with regard to various issues that crop up with respect to German and Indian citizens’ liability to pay taxes to Germany and/or India. It does not even remotely touch upon information regarding Indian citizens’ bank accounts in Liechtenstein that Germany secures and shares that have no bearing upon the matters that are covered by the double taxation agreement between the two countries.

It is also pertinent to note that the successive Indian governments have never ever revealed any evidence, either in court or otherwise, to effect that the German Government objects to sharing of information. This was also remarked by the SC in Para 59:

the Union of India did not provide any evidence that Germany specifically requested it to not reveal the details with respect to accounts in the Liechtenstein even in the context of proceedings before this court.

 4. Intentional disregard of United Nations Convention Against Corruption (UNCAC)

India, Germany and Switzerland – all are signatories to the UNCAC which emphatically empowers the two countries on following counts:

  • UN Convention Against Corruption gives full sanction to make simple changes in the laws of our country to tackle black money menace permanently
  • UN Convention Against Corruption overrides ‘bank secrecy laws’
  • UN Convention Against Corruption empowers to freeze, seize and confiscate illicit money
  • UN Convention Against Corruption on Mutual Assistance by different tax jurisdictions

It is indeed surprising to see that the BJP government is disregarding the UNCAC, rather than using it to its benefit and prosecute those who possess illicit money.


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