In a decision fraught with far reaching implications and a break from the tradition of banking secrecy that have been the hall-mark of Swiss banks, UBS has agreed to release to the United States the names of 4,450 American citizens suspected of using secret Swiss accounts with it for tax evasion.
This decision was made possible by evidence from an American-born whistleblower — code name Tarantula — a disgruntled former UBS employee from the Boston area who was working in Switzerland. He was part of a UBS team that made frequent trips across the Atlantic to aggressively market investment strategies to rich Americans to elude the scrutiny of the US Internal Revenue Service (IRS). While admittedly, the decision is one-off and applies to only a particular category of customers under a specific circumstance, it is believed that the momentum of anger against financial institutions in the aftermath of the global financial crisis could force the Swiss authorities to relax their banking secrecy rules.
In India too, there have been a growing chorus of opinion asking the Government to bring pressure on the Swiss Government to reveal details of the alleged $500 bn to $1.4 trillion of slush money stashed away in secret Swiss bank accounts and in other tax havens. Notwithstanding the deal between US IRS and UBS, the Indian government will find cracking the Swiss code very tough, if not impossible. The US Justice Department and the IRS have been in a long drawn out campaign to prevent these banks from selling offshore banking services that enabled tax evasion to American citizens, with limited success till date.
The Indian Government could do with some help from an Indian version of Tarantula! Any potential Indian whistleblower working at UBS or Credit Suisse listening?