Gearing up for Obama’s visit: Finance Ministry to rush Cabinet note to sign US FATCA
NEW DELHI: The finance ministry is planning to rush through a Cabinet note seeking permission to sign an accord with the US on exchanging investment information before a December 31 deadline, ahead of President Barack Obama’s visit to Delhi at the end of January.
The government has got the goahead of the justice MB Shah-led special investigation team (SIT) on black money, which allows India to sign international treaties that include confidentiality clauses, an issue that had prevented the country from acceding to the US Foreign Account Tax Compliance Act or FATCA.
A SIT official confirmed that the report had been given. India had been forced to skip signing the OECD protocol on information exchange in October after the Supreme Court demanded a list of names that India had obtained from governments overseas under tax treaties under strict confidentiality rules.
Such clauses are meant to ensure that information provided by another country can only be used in case there is an ongoing investigation into the finances of an individual or entity, not for fishing expeditions. Following the Supreme Court’s decision, the finance ministry had sought its direction on pursuing international accords such as FATCA that have an inbuilt confidentiality clause. The apex court had asked the SIT to look into the matter.
SIT’s endorsement of confidentiality clauses in such treaties will boost the Narendra Modi government’s pursuit of black money as this will make it easier for other countries to provide information to India on any investments by its citizens overseas.
Countries would be unwilling to share data if India isn’t able to assure secrecy.
