Black money issue -- what is needed

I posted this in the thread "Different perspectives on Ramdev" but it got buried under the Rashmun-SP slugfest. So here it is again. https://such.forumotion.com/t1235-different-perspectives-on-ramdev#10904

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SomeProfile wrote:Faced with the similar situation, see what the US did: http://www.reuters.com/article/2011/06/10/us-usa-taxes-swiss-idUSTRE75940920110610

I remember reading this a while ago. This is obviously something India should pursue vigorously. India has less leverage than the US to do this -- because UBS and smaller Swiss banks can easily exit India without much impact, if they perceive a real risk of prosecution. (They can't do that to the US without shuttering their investment banking divisions first.) But we do have some leverage -- India is gradually opening its banking sector, and it is also gradually privatizing public-sector enterprises. Both those can be used as leverage points in negotiations with the Swiss banks. What is needed is convincing the Swiss that the Indian political leadership is dead serious and won't back down. It will take years of determined effort on the part of the government to get the list of names of Indian citizens who hold those secret accounts.

Then comes the challenge of getting those funds back. That will require proving -- in Swiss courts -- that the money was acquired through illegal means. (Any fines that India makes the banks themselves pay won't amount to even 1% of the black money that the banks are holding in those secret numbered accounts -- even the US fines won't recover the money stashed overseas; the US will prosecute tax evaders one by one to get the money owed to it as tax.) Just because the Indian government knows that Rahul Gandhi has a numbered Swiss bank account does not mean India can somehow "bring that money back" to India.

There are two routes India can take at that stage: (1) prosecute Rahul Gandhi for violating Indian law -- the easiest charges will be violating FERA / FEMA and tax evasion, (2) file suit in a Swiss court that the money in Rahul Gandhi's account was "stolen" from the people of India. Option 1 won't result in the money coming back to India -- at most, it will result in prison terms for those you manage to convict -- the threat of which may be used opportunistically to bring some of the money back through plea bargains. Option 2 will result in the return of stolen money, but will require a very high standard of evidence which will be almost impossible to produce (because India hasn't done a good job investigating, prosecuting and convicting the crimes that resulted in that black money being acquired by its holders.)

Ramdev's tactics are completely unsuited to the nature of the work that is required to do all this. Of course, he is using this to build up his own popularity (and there is nothing at all wrong with that), but what we really need in order to get the black money back is the creation of a fully independent and empowered investigative organization that can do all the work I mention above, with the Supreme Court and / or another agency like the CVC making sure that the independent agency itself is not defrauding the country by cutting deals on the side with the people it is investigating.