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Feb 15, 2011, 10.24 AM IST | Source: CNBC-TV18

Should India take the amnesty path to recover black money?

Prof Daniel Fischer, senior partner in Swiss law firm Fischer & Partners, in an interview with CNBC-TV18's Menaka Doshi suggested that India should take the amnesty route in order to recover Indian black money from Swiss accounts.

Prof Daniel Fischer, senior partner, Fischer & Partners

The issue of black money stashed away by Indianís overseas has come back on the public agenda with the courts calling it national loot. The finance ministry has set up a committee to figure out the extent of the problem and suggest solutions.

Prof Daniel Fischer, senior partner in Swiss law firm Fischer & Partners, in an interview with CNBC-TV18's Menaka Doshi suggested that India should take the amnesty route in order to recover Indian black money from Swiss accounts.

Below is a verbatim transcript of his interview. For the complete details watch the accompanying video.

Q: There are several numbers that are being thrown about the extent of black money originating from India. Some peg it at a massive USD 1 trillion, while the Indian government says there is no accurate estimate. What are your estimates on the extent of Indian black money?

A: There is a lot of flawed distorted numbers. I also heard USD 1,900 billion and so on. But we have to come down to earth. Switzerland doesnít have statistics about how much money belongs to India but there is a statistic saying that the money in Swiss bank accounts are divided into two groups - one group is foreign money and the other group is Swiss money.

We know for certain that foreign money overall is USD 2,200 billion and USD 1,300 billion are from institutions. Of the remaining USD 900 billion, a certain part from this USD 900 billion belongs to India. I canít tell you the number but for sure I can tell you that it has to be less than USD 500 billion.

Q: What are the options before the Indian government to recover and repatriate this money back into India?

A: First of all we have an avenue that money will go back to India but India will have to do the homework. They will have to make a specific request and state why they would like the money back. Fiscal offences and financial terrorism are good enough reasons, so, you donít need another reason but if there is a tax offence and you know where the money is, you know the name, I donít doubt the Switzerland will deliver the data to India.

India is also a very important trading partner. There is also no political unrest in Switzerland. The banks are stable and safe. If you are doing a proper request, I know for certain that this data will be delivered to India. I have to highlight that there is no automatic exchange of data anywhere, be it Singapore or Hong Kong etc. You need to place a request but if you are going to do the request then you have a good chance to get the money.

Q: Would you say that an amnesty scheme is an option? That the Indian government should consider and implement? That a possible settlement option?

A: I am really convinced that this is the right tool to settle the situation. I have quite a lot of experience with international amnesty, representing this office in New Delhi and in London. We can learn amnesty from other states and if I am not totally wrong, India also made one amnesty about 10 years ago.

Amnesty will normally say that there will be no fear of criminal prosecution. Sometimes, like in Italy, you donít even have to pay a penalty. Italy brought back USD 140 billion black money in this way. Turkey made amnesty not long time ago, and brought back USD 22 billion. We have other negative examples, for instance Netherlands, with only USD 350 million.

Principally, itís the right way; itís a kind of self declaration. The entire experience is very good. Even Switzerland is now doing amnesty for Swiss people. I donít see a reason why India shouldnít do an amnesty.

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