India to support global meet on exchange of information

Prime Minister Narendra Modi will extend India’s support to the global convention on automatic exchange of information at the forthcoming G20 summit in Brisbane, sending a clear signal that New Delhi may have skipped formally inking the proposal last month but isn’t wavering on backing it. Modi “will express support for the convention at the G20 summit… India remains committed to it,” said a senior government official.

The new OECD-G20 standard on automatic exchange of information was endorsed last week by member nations of both groupings as well as major financial centres at the annual meeting of Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin. OECD is the Organization of Economic Cooperation and Development.

A status report on so-called committed and not committed jurisdictions will be presented to G20 leaders during the Brisbane summit on November 15-16. Modi is expected to explain India’s position— that it’s not opposed to the agreement and will sign it as soon as there is clarity on the issue at home.

India has led the fight against bank secrecy and spearheaded the setting up of the new protocol. Its officials didn’t attend the Berlin meeting at which the multilateral competent authority (MCA) agreement and intended first information exchange date was agreed on October 29. Countries signing the MCA have to commit themselves to keeping data shared under the protocol confidential.

The Indian government has sought clarity from the Supreme Court on the presence of such clauses in international treaties following a recent ruling by it. The court had insisted on being given information regarding overseas account holders in a case related to uncovering black money despite the government’s reservations about secrecy rules being breached. Such information is typically made public only if there is enough evidence to warrant prosecution.

A finance ministry official said India hasn’t refused to sign the agreement but has deferred it for now. The official said India will have to enter into bilateral memoranda of understanding as a followup to signing the convention.

Finance minister Arun Jaitley has already written to the German finance minister conveying India's support for the agreement and explaining how India could not sign it due to certain domestic procedural compulsions.

Nearly 80 countries have signed the OECD agreement to share financial data, which will boost efforts to crack down tax evasion.