As much as half the assets stowed in Swiss banks, estimated by experts at $2 trillion, may be undeclared money”, according to Charles de Boissezon, presently Chief Executive of Geneva-based Indian Hinduja private bank and former head of Switzerland’s Banque Piguet.
Switzerland and Germany have signed a Supplementary Protocol that complements the tax agreement of 21 September 2011—it would bring billions of extra Euros into the German national exchequer. In Germany, there is still resistance from Opposition—Social Democrat (SPD) Party—over this move.
Pakistan has yet not taken even an initial step towards such an agreement whereas the Indian government renegotiated its tax treaty with the Swiss government and from January 1, 2012 is now entitled to seek information for any hidden account.
In Pakistan, the Opposition has shown no interest in forcing the government to bring back the looted/untaxed money from Swiss and other banks—their demand to this effect is restricted to mere lip-service or just targeted against Asif Ali Zardari whereas billions belonging to other tax dodgers are lying there as well. Opposition parties could have moved their own Bill in any of the houses of Parliament to exert pressure on the government, but their inaction speaks louder than mere rhetoric on the issue.
The latest German-Swiss Agreement not only respects the protection of bank clients’ privacy applicable in Switzerland but also ensures the implementation of Germany’s legitimate tax claims. Switzerland has agreed to a similar deal with Britain and is also in talks with Austria and Greece. The Swiss and German governments re-opened negotiations after the SPD rejected an initial deal signed last September, saying it was too lenient on tax dodgers. On April 5, 2012, they announced tougher terms, which met some but not all of the SPD’s demands. “The talks have been fairly heated recently,”
Under the revised deal, Germans will have to alert the Swiss authorities when they move their money out of Swiss bank accounts from Jan. 1 2013, versus a previously agreed May 31, in order to prevent an exodus into other offshore accounts.
The PPP government has no intention to renegotiate existing tax treaty with the Swiss government as has been done by a number of countries including India, to retrieve billions in taxes if not the entire funds. In Pakistan, the private efforts to invoke extraordinary jurisdiction of Supreme Court to bring looted wealth and untaxed money have also failed. The Supreme Court declared the petitions non maintainable.
On the contrary, the Indian Supreme Court, in its historic decision of 4 July 2011 in the case of Ram Jethmalani and Other v Union of India reported as 2011 PTR 1933 (S.C. Ind), set up a ‘Special Investigation Team’ to supervise the Government-led investigations into black money of Indians lying abroad.
The decision, given by Indian Supreme Court in pursuance of a Writ Petition filed by Indian veteran leader Ram Jethmalani alleging inaction by the Government on unearthing of unaccounted money, has special significance for Pakistan. The apathy of rulers in Pakistan in probing looted money lying abroad is a great cause for concern as the government has successfully flouted the judgement of Supreme Court of Pakistan in the famous NRO case.
The directions given by the Supreme Court in Dr. Mubashir Hasan and others v Federation of Pakistan (2010 PLD Supreme Court 265) have yet not been complied with—President and his son, Prime Minister, in fact, entire People’s Party including its veteran leader Aitzaz Ahsan (once in the forefront of movement for independent judiciary) are openly defying it. This is sheer mockery of rule of law. The common people, being highly disillusioned now, are openly saying that even Supreme Court of Pakistan is proving to be yet another ineffective institution. The Supreme Court of Pakistan in 2010 PLD Supreme Court 265 held:
“Since the NRO, 2007 stands declared void ab initio, therefore, any actions taken or suffered under the said law are also non est in law and since the communications addressed by Malik Muhammad Qayyum to various foreign fora/ authorities/ courts withdrawing the requests, earlier made by the Government of Pakistan for mutual legal assistance; surrendering the status of civil party; abandoning the claims to the allegedly laundered moneys lying in foreign countries including Switzerland, have also been declared by us to be unauthorized and illegal communications and consequently of no legal effect, therefore, it is declared that the initial requests for mutual legal assistance; securing the status of civil party and the claims lodged to the allegedly laundered moneys lying in foreign countries including Switzerland are declared never to have been withdrawn. Therefore the Federal Government and other concerned authorities are ordered to take immediate steps to seek revival of the said requests, claims and status”.
The Supreme Court also observed in this judgement:
“A Monitoring Cell shall be established in the Supreme Court of Pakistan comprising of the Chief Justice of Pakistan or a Judge of the Supreme Court to be nominated by him to monitor the progress and the proceedings in respect of Court cases (explanation added in detailed reasons) in the above notices and other cases under the NAO, 1999.
Likewise similar Monitoring Cells shall be set up in the High Courts of all the Provinces comprising the Chief Justice of the respective Province or Judges of the concerned High Courts to be nominated by them to monitor the progress and the proceedings in respect of Court cases (explanation added in detailed reasons) in which the accused persons had been acquitted or discharged under Section 2 of the NRO, 2007”.
By spring of 2012, the people of Pakistan have lost hope in everything. Beneficiaries of NRO whom Supreme Court ordered to be tried under the law are holding key positions and have made Pakistan a State captive in the hands of criminals.
The above referred directions of the Supreme Court have lost their meanings as government of PPP and its allies are not inclined at all to act upon it. The partners in PPP government, claiming to be champions of democracy, should be ashamed of their stance and must leave the government at once if they want to survive politically. The Opposition should forge alliance on this issue and render resignation en bloc if verdict of Supreme Court is not implemented. The Opposition of Pakistan must learn from German parties how they had forced their government to be tougher while dealing with tax cheats.
In other countries, including India, corruption is an issue but at least there exists a strong will to fight it. Recently in India, two drafts of Lokpal Bill were discussed—one prepared by the government and the other, by activists led by Gandhian Anna Hazare.
In Pakistan, on the contrary, political stalwarts (sic) are united to defeat the verdict of Supreme Court in NRO case.
The resistance of the government to write a letter to the Swiss government as per Supreme Court’s NRO verdict should be countered politically by all concerned. It can pave the way for mass movement in Pakistan provided all political parties opposing PPP join hands.
All responsible governments in the world have in recent years shown commitment to retrieve untaxed money but in Pakistan, the government is acting as the main stumbling block to any such move even when binding judgement of the Court so requires and is enforceable under Article 189 of the Constitution. Pakistani tax authorities—knowing that there exists a treaty of avoidance of double taxation and exchange of tax information with all the governments where Pakistanis have parked untaxed money—have not yet taken any step to probe into hidden foreign accounts of Pakistanis. It is no secret that Pakistani tax evaders have been transferring huge amounts of money to many offshore havens. In Pakistan, we have no leaders like Ram Jethmalani and Anna Hazare having a will and courage to launch nation-wide campaigns against corruption. Ram Jethmalani and Anna Hazare have done so because their own hands are clean whereas in Pakistan, majority of the leaders cannot justify their tax declaration vis-à-vis standard of living and assets amassed during their public life.
Filed under: Corruption, Pakistan Under President Zardari | Tagged: Asif Ali Zardari, Corruption, Pakistan under PM Gilani, Pakistani Politics | Leave a Comment »
