NEW DELHI: India’s fight against black money got a shot in the arm with Switzerland ratifying the global convention on automatic exchange of information (AEOI) on financial transactions by the country’s residents.The Swiss Federal Council, which adopted the dispatch on introduction of the AEOI on Friday, said implementation is planned for 2018 and the first data exchange should take place in the year after. The council, which is the top governing body of the European nation, will soon notify the Indian government about the exact date from which automatic information exchange will begin.“The greatest advantage of this development, from a transparency perspective, is the aspect of automatic exchange of information rather than the long and tedious process of requesting for specific information and proving there was a credible inquiry against a particular taxpayer in India in relation to which the information was sought,” said Sudhir Kapadia, national tax leader, EY.“While earlier a taxpayer who had dodged taxes in India could hope that his income in a Swiss account would remain undetected, going forward, such an action will be fraught with considerably higher risks and consequences and serve as a strong deterrent,” he said.The council’s decision is not subject to a referendum, which means there should be no further procedural delay in implementation. India and Switzerland inked the pact for implementation of AEOI last November.Switzerland has been long perceived as a safe haven for illicit wealth stashed abroad by Indians due to its banking secrecy laws and had blocked attempts to ferret out account details and establish money trails.“The days of Swiss banking secrecy is over. It would be very difficult to use Swiss banking channels to launder black money as automatic information sharing will start from September 2019. However, India will need to ensure strict confidentiality and data security in order to access information,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.India’s efforts succeeded for the first time in October 2014 when both countries signed a protocol, with Switzerland agreeing to provide any requested banking information in a timebound manner to help in the crackdown on black money.The fight against black money is one of the Narendra Modi government’s key priorities. It set up a special investigation team on the first day after taking over in May 2014 and has since unleashed a number of measures to root out unaccounted wealth, the most radical of these being the withdrawal of Rs 1,000 and Rs 500 notes announced on November 8 last year.Friday’s decision follows hectic parleys between India and Switzerland for the introduction of AEOI on tax matters under the guidance of the G20, OECD and other global organisations.The council said the proposal to introduce AEOI with India and others “met with widespread approval from the interested parties who voiced their opinions in the consultations… In concrete terms, the AEOI will be activated with each individual state or territory by means of a specific federal decree within the framework of this dispatch”.The exchange of information itself will be carried out based on the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information, which is in turn based on the international standard for the exchange of information developed by the Organisation for Economic Cooperation and Development (OECD). The council said it will prepare a situation report before the first exchange of data, which is planned for autumn 2019.“In the process, it will be checked whether the states and territories concerned effectively meet the requirements under the standard, especially those concerning confidentiality and data security,” it said. “It is important for the Federal Council that a level playing field be created among states and the major financial centres, in particular, be included. This year, Switzerland has introduced the AEOI with 38 states and territories, including all EU member states, and data will start to be exchanged with them in 2018.”Switzerland is satisfied with various regulations in India, including changes in the Information Technology Act, with respect to ensuring protection of privacy, according to a document released by that country’s government.Among other things, it has mentioned that more than Rs 4,000 crore of black money was disclosed by entities during the compliance window declarations in 2015.Confidentiality and data protection requirements are to be strictly followed under the automatic information exchange framework. This process ensures the signatory always maintains control over its exchange partners and the treatment of the data exchanged, as per OECD.The Indian government said in November it would be possible to receive from September 2019 onwards financial information pertaining to accounts held by Indian residents in Switzerland for 2018 and subsequent years on an automatic basis.India signed the Convention on Mutual Administrative Assistance in Tax Matters in January 2012. The multilateral agreement promotes international cooperation while respecting the rights of taxpayers.Among others things, the convention provides for administrative cooperation between parties in the assessment and collection of taxes in order to combat tax avoidance and evasion.