Short Note: Switzerland Finding India’s Data Security Law Adequate

What does it mean when Switzerland finds data security and confidentiality laws of India adequate for entering into an automatic exchange of information pact? What things would follow?

Switzerland recently through a notification declared the finding that the security and confidentiality laws of India are adequate to enter into Automatic Exchange of Information pact or AEOI pact.

What is AEOI?

Automatic Exchange of Information or AEOI is a portal developed by Organisation for Economic Co-operation and Development (OECD) to overview the work of OECD as well as to provide an international forum for transparency and Exchange of Information regarding the accounts of suspected black money hoarders so as to avoid tax.

What things would follow?

Black money has always been a matter of debate in India and Switzerland is considered to be the safest haven for tax evasion. Hence, on June 16, 2017, the Switzerland Government ratified the AEOI pact with India and 40 other nations which means that it would share the information regarding the financial accounts and details of suspected black money. The implementation of the pact is planned for the year 2018 and start will be exchanged from 2019. Before the implementation, the Swiss Government will prepare a situation report which needs internal law of the nation to be conforming to the sharing of information.

Now, as Switzerland has declared Indian laws on data security and confidentiality to be adequate, the Swiss Federal Council has been empowered to notify India with the dates on which the exchange would take place. Also, Switzerland is interested in Indian markets and surely wants to explore it. Therefore, after the exchange of information, it may get access to the Indian markets especially in financial services sector.