India threatens Swiss regulator with criminal investigation in black money probe

New Delhi,Shubhashish(dna): The Swiss Financial Market Supervisory Authority FINMA has said that India is threatening to open a criminal investigation if the agency did not disclose names of Indians with unaccounted money stashed in Swiss banks.

FINMA is an independent supervisory authority that acts to protect the interests of creditors, investors and policyholders and ensure the proper functioning of financial markets. FINMA also supervises the disclosure of shareholdings, conducts enforcement proceedings, issues rulings and, where wrongdoing is suspected, files criminal complaints with the competent prosecuting authorities.

In its annual report, FINMA said that the year 2014 was dominated by major investigations into unacceptable business conduct in certain sectors of the finance industry. It said, “We have seen many examples of unacceptable business conduct: manipulation of stock prices and foreign exchange markets, and aggressive conduct in cross-border wealth management, all of which absorbed much of our time in 2014.”

To tackle this issue and bring back confidence, FINMA said, “In response, we have placed increasing emphasis on enforcement, our sanctions. We have expanded the division responsible for these activities to around 15% of our workforce.”

FINMA said that international pressure on cross-border wealth management remained high in 2014 and that it will continue to preoccupy the financial sector and FINMA in the years to come.

Expanding on this point, the authority said, “Germany, France, Belgium and Argentina have followed the US in launching high-profile criminal investigations, while Israel and India are threatening to do so.”

Black money has been a major political tug-of-war in India with the Narendra Modi-led NDA government promising to bring back unaccounted money.

Finance Minister Arun Jaitley, in his budget speech on February 28 also announced that the government will bring a black money bill.

The Bill, titled The Undisclosed Foreign Income and Assets Bill, has been tabled in the lower house of the Indian parliament.

The Bill has provisions like a penalty of 300% on wealth hidden abroad and up to 10 years of imprisonment.

The Bill gives the offenders a short window to declare their overseas assets and pay legitimate tax on them to escape from prosecution.

In February this year, the Swiss Government had said that it is cooperating ‘intensely’ with India over black money probe.

Also Read: Black money: Swiss goverment says cooperating intensely with India

Following which, Swiss banks even asked their Indian clients to come clean on illicit funds and provide undertakings stating that the money in those accounts are legitimate and are accounted for.

FINMA said that it is keeping a close eye on these proceedings, deploying both supervision and, where necessary, enforcement32 to ensure that banks adequately assess, manage and limit their legal and reputational risks in this area.

Posted by on April 4, 2015. Filed under Editorial. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.